Kalyani ForgeQ4 FY26
Kalyani Forge Q4 FY26 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹680P/E: 20.3Market Cap: ₹252 CrSector: Industrial Products
Management growth scorecard
Revenue
Category 3
Margin
Category 1
Fundraise
Yes
Order
No
Capex
Yes
3 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 3- →The company is focused on strategic new order wins, particularly in high-volume and EV products, such as axle components for passenger vehicles.
- →They aim to grow core OEM business revenues, which have shown an upward trend, reaching Rs. 37.3 crores in FY26.
- →Capex in FY27 is geared towards future growth, with 60% allocated to new business areas like driveline and axle segments.
- →The product portfolio is future-proof with driveline and axle segments fuel-agnostic, applicable to any drivetrain, including EVs.
- →The company expects steady top-line growth by targeting select customers and products with large market sizes.
- →Operational improvements and capacity expansions, especially in forging modernization and plant engineering, support volume growth.
- →Order books reflect long-term, multi-year programs typically spanning 5 to 10 years or more, supporting sustained revenue visibility.
- →Export business is being rationalized but is expected to grow from new fit business, stabilizing overall sales mix.
Margin guidance
Category 1- →EBITDA margin baseline established at 15%, targeting an increase to 20% within a year (by end FY27 or early next fiscal year).
- →Focused growth through high-volume OEM, Tier 1, and EV product segments, especially in driveline and axle components for passenger vehicles.
- →Capex of Rs. 30 crores planned for FY27, with 60% allocated to future growth areas and new business ramp-up.
- →Operational efficiencies and plant engineering initiatives to enhance production uptime, quality, and scalability.
- →Continued phasing out of non-fit, low-margin legacy businesses to improve profitability and scalability.
- →Revenue growth prioritized through focused business development and strengthening supply chain relationships.
- →Improved ROCE from 14% to 18% in FY26; targeting further capital efficiency and sustained profitable growth.
- →Cash conversion cycle reduction targeted from current high levels (~176 days) to 120-130 days for better working capital management.
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Fundraise plans
Yes- →The company is maintaining its debt-to-equity ratio around 1.0 to 1.2 while funding growth capex and working capital needs.
- →Discussions and initial meetings with potential investors for equity funding have taken place.
- →The company is actively working on equity funding, with good feedback from the market.
- →Several strategic steps have been outlined to strengthen the balance sheet and be ready for equity funding.
- →No specific timeframe or quantum of the equity raise is disclosed, but efforts are ongoing.
- →Debt is being carefully managed to support capex and scale-up initiatives.
Order book
No- →The new business order book figure remains the same as in Q3, as some orders have moved into production, maintaining a balanced figure. (Page 13)
- →These orders are long-term programs, typically spanning 5 to 10 years, with some extending beyond 10 or even 20 years if the OEM design remains unchanged. (Page 14)
- →New order wins include strategic orders in high-volume and EV axle products for passenger vehicles, including from key customers like SKF and Schaeffler. (Pages 11, 12)
- →The company is focused on selective, future-proof, and growing markets/products rather than numerous customers, aiming for deep engagement with critical market leaders. (Page 12)
- →Order backlog is to be moved into production in near term as part of ongoing multi-year programs. (Page 13)
Capex plans
Yes- →FY26 Capex: Rs. 23.44 crores excluding reclassification of Dyson tooling.
- →FY27 Capex Plan: Rs. 30 crores budgeted.
- →Capex Allocation (FY27):
- → - 60% allocated to future growth areas (driveline, axle, ramp-up, and new business).
- → - Rs. 10 crores for existing business.
- → - Rs. 10 crores for ramp-up business.
- → - Rs. 10 crores for new business.
- → - Rs. 5 crores for future business.
- →Capex focused on upgrading asset base for predictable growth, increasing OEE, and removing bottlenecks.
- →Emphasis on capital-efficient and customer-aligned Capex planning.
- →Strategic funding plans include maintaining debt-to-equity ratio around 1 to 1.2 and working on equity funding with feedback from potential investors.
- →Capital investment aimed at supporting multi-year OEM programs (5-10 years, some up to 20 years).
How does Kalyani Forge rank vs peers in Industrial Products?
Pro feature1Kalyani Forge
Rev 3Mar 1
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How does Kalyani Forge rank in Industrial Products?
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