Pitti Engineering Ltd

- As of August 19, 2024, Pitti Engineering Limited has completed a fundraise of up to INR 360 crores via Qualified Institutional Placement (QIP). - There are no plans for additional inorganic acquisitions or fundraises within the current financial year. - The company intends to focus on consolidation and integration of recent acquisitions. - Free cash flow generated will be primarily used to reduce existing debt. - Debt level was reduced from INR 525 crores (June 30, 2024) to about INR 300 crores as of August 1, 2024. - Future fundraising decisions will be evaluated closer to the next financial year based on integration progress and strategic requirements.

- Pitti Engineering is currently undertaking a capex of INR198 crores focused on machining capacity expansion at the Aurangabad facility. - The Aurangabad plant has added 2.5 lakh sq. ft., with capacity expandable up to 100,000 tons per annum (an increase of 28,000 tons). - The machining capex is planned to be completed flexibly within 12 to 18 months, aligned with demand to avoid overhead costs without revenue. - The company completed acquisitions (Bagadia Chaitra and Dakshin Foundry) in the current financial year with no immediate additional inorganic acquisition plans. - Funds raised via QIP (up to INR360 crores) aim to strengthen the balance sheet and support future growth; free cash flow will focus on debt reduction before considering new acquisitions. - The merger approval with Pitti Castings is expected soon, which will further consolidate and grow the business.

- Q1 FY '25 saw the highest ever volumes, revenue, and EBITDA for the quarter, indicating strong growth momentum. - Stand-alone revenue grew by 21.92% to INR 354.45 crores; sales volume increased 24.63% to 12,411 tons. - Consolidated capacity is set to increase to 90,000 MT per annum with new commissioning in Aurangabad by September, enabling higher production. - The company has an optimistic outlook for the rest of the year aiming to surpass annual targets of 48,000 MT (stand-alone) and 63,000 MT (consolidated). - Growth driven by continued demand across almost all customers and new acquisitions (Bagadia Chaitra Industries and Dakshin Foundry) expected to consolidate and improve performance. - Increment cycles completed in Q1, with expected sales growth impacting revenue positively in coming quarters. - No immediate further inorganic growth planned in FY 2025; focus is on integration and consolidation of recent acquisitions.

- Pitti Engineering expects sales volumes and revenues to grow in upcoming quarters due to increment cycles and increased demand. - EBITDA per ton is anticipated to increase from INR43,785 to about INR48,000 on a standalone basis after merger with Pitti Castings. - Consolidation benefits from recent acquisitions (Bagadia Chaitra and Dakshin Foundry) are expected to improve margins and EBITDA per ton significantly over the next 2-3 quarters. - New capacity commissioning at Aurangabad by September will increase consolidated capacity to 90,000 MT, supporting volume growth. - The company aims to surpass annual targets of 48,000 MT (standalone) and 63,000 MT (consolidated). - Debt reduction focus with free cash flow expected to reduce net debt from INR300 crores post-fundraise. - Overall outlook is optimistic for continuing growth in earnings, driven by volume expansion, improved operating leverage, and integration of recent acquisitions.

- Total order book as of August 2024 is around INR 1,000 crores. - Short-term and long-term order mix: - Long-term orders: Approximately INR 200 crores (depleting and one-time in nature). - Remaining are short-term orders, replenished regularly. - The company follows a build-to-ship model; hence, the order book may not fully indicate current business strength. - Railway business exposure (30%-35%) is stable with no expected degrowth; more railway orders are anticipated going forward. - Incremental order inflows are expected, supporting optimistic outlook for the year.