Thaai Casting Ltd Q1 FY26 Earnings Analysis

- The company targets a year-on-year revenue growth of approximately 40% driven by new projects and expansions. - FY ’26 revenue guidance stands at Rs. 170 to Rs. 180 crores with a 27% margin. - The die casting capacity has increased to about 4,500 metric tons per annum, translating to potential peak revenue of Rs. 240 crores. - The wind segment (gear shaping) is expected to generate Rs. 40 to Rs. 45 crores annually starting January 2026. - Gas nitriding business with six furnaces will add around Rs. 24 crores revenue from FY '27 onwards. - Existing casting business peak revenue remains around Rs. 220 crores with limited expansion planned, but some growth from existing customers is expected. - New facilities are expected to reach full utilization (~100%) by March 2026. - Overall order book is Rs. 520 crores, executable over 4-5 years, supporting sustained revenue growth.

- Thaai Casting expects a 40% year-on-year revenue growth, with targeted revenues of Rs. 170-180 crores for FY ’26. - Peak revenues from die-casting are estimated at Rs. 210-240 crores as capacity ramps up by FY ’27. - New segments like gear shaping and nitriding are expected to generate Rs. 40-45 crores and Rs. 12 crores respectively in annual revenues. - EBITDA guidance is around Rs. 22-23 crores minimum, with margins expected to improve post depreciation of new CAPEX. - PAT margins will be under pressure for 2-3 years due to high CAPEX, depreciation, and interest costs; however, cash flow is anticipated to be positive annually from FY ’26 onwards. - Risk analysis conducted; management confident that debt levels (max Rs. 120-130 crores) are sustainable given stable order book (Rs. 520 crores). - Expansion into wind and defense sectors expected to diversify revenue and support sustained growth over 3-4 years.

- Rs. 100 crores CAPEX ongoing, includes building and machinery for gear shaping and nitriding facilities; expected completion by end of the current financial year. - Investment in six furnaces for gas nitriding: three are already commercial, three additional furnaces planned by January 2026 with around Rs. 12 crores cost. - Expansion includes new 3-acre land purchase near existing facilities dedicated to gear shaping process. - IPO funds used to expand die casting and machining capacities and land acquisition (3 acres). - Future growth includes wind sector gear shaping business with exclusive 5-year volume commitment. - No immediate expansion in casting segment beyond current maximum peak revenue projected around Rs. 220 crores. - Debt funding planned for CAPEX and working capital, maintaining average borrowing cost around 10%.

- Currently, no decision has been finalized on new fundraising through equity; the company is primarily focusing on debt financing. - Advances for machines have mostly been funded through internal accruals. - Negotiations with bankers and NBFCs for debt are ongoing, with finalization expected within about 20-25 days. - The company initially planned to raise funds via equity, but unfavorable market conditions delayed this. - Debt cost targeted around 10%, aiming to maintain an average interest rate of 10% using cheaper sources like supplier credits. - Total debt expected to peak around Rs. 120-130 crores, balancing planned CAPEX of Rs. 100 crores and working capital needs. - Management is conducting thorough risk and debt analysis to ensure sustainable leverage despite expansion plans.

- Current order book stands at approximately Rs. 520 crores (Rs. 386 crores existing + Rs. 126 crores added recently). - Orders are expected to be executed over a 4 to 5-year period. - The order book includes validated and approved parts, with initial approvals and sample submissions mostly completed. - The Rs. 520 crores order book is inclusive of nitriding and machining services. - Orders span automotive and non-automotive sectors with customers like Hyundai, Kia, Maruti Suzuki, Tata Motors, GEV Wind Power, Adani Wind, etc. - Order execution for the current year is estimated at around Rs. 170-190 crores. - The company expects steady order inflow, backed by long-term relationships and expanding capacities.