Thaai Casting LtdQ3 FY25Auto Components

Thaai Casting Ltd

Q3 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

1 of 4 growth signals are positive — mixed outlook.

Revenue guidance

Category 3

→FY26 revenue growth expected around 20% over previous year (~INR150 crores), despite some project postponements.
→Certain large order delayed from January to July, pushing volume ramp-up to H2 and FY27.
→FY27 outlook positive with continued order execution and planned capacity utilization improvements.
→Gas nitriding facility revenues anticipated to increase from INR4.5 crores in H1 FY26 to INR6.5-7 crores in H2; total annual expected INR13 crores.
→New planetary gear machines expected to generate around INR25-40 crores annual revenue starting FY27.
→Order book (~INR500 crores) fully automotive, with execution timelines extending 36-80 months.
→Company aims to expand customer base, focus on specialized, higher-margin products and maintain steady profitable growth.
→New projects and capacity expansions under discussion for future years beyond FY27.

Category 3

→Revenue growth of ~20% expected for FY26 despite customer-side delays, targeting around INR150-170 crores (Pages 14, 15, 16).
→FY27 outlook indicates better growth with new orders and ramp-up in postponed projects (Pages 10, 16).
→Margins steady at ~26%, expected to slightly improve with specialized processes like gas nitriding and planetary gear machines, though increasing casting volume may dilute overall margin (Page 10).
→Gas nitriding segment revenue forecasted at INR13 crores annually post full ramp-up, with EBITDA margin around 14% (Page 7).
→Planetary gear machines expected to generate close to INR40 crores annually with commercialization targeted by FY27, contributing positively to margins (Page 8).
→Debt levels capped at INR116 crores with interest rates around 7.95%-8.2%; no major capex planned in FY27, focus on optimizing current assets (Page 16, 9).
→Strategic focus on expanding customer base and specialized, higher-margin product lines for sustainable profitable growth (Page 5).

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Yes

→No new fundraising through debt or equity is planned for FY27; the company expects no significant capex next year and will focus on optimizing existing investments.
→Current borrowing stands at INR116 crores, which is considered the maximum needed for the ongoing project; no increase in borrowings is anticipated.
→Future capex discussions and potential fundraising may commence after FY27, pending assessment of expansion needs identified through industry events, such as the recent wind exhibition.
→The company recently completed a preferential allotment raising approximately INR31.49 crores through equity shares, convertible warrants, and CCDs, providing financial flexibility for current capacity expansion and operations.
→Overall, the company is cautious about additional debt and equity raising until existing projects are fully capitalized and operational.

→Current order book stands around INR 500 crores, entirely in the automotive segment.
→Execution timeline for the order book varies from 36 months to 80 months.
→A cumulative order value of INR 91 crores covers execution over 60 months.
→Some portion of orders expected for FY26 got postponed to next year, causing delay in H1 revenue translation.
→Postponement mainly due to customer-side delays and validation/audit processes; one major order for Brazil postponed from January to July next year.
→Management expects revenue growth of 20% for FY26 despite postponements.
→New orders expected from existing automotive customers, with some new platform orders potentially confirmed by December.
→Orders received include INR 126 crores domestic order (steering wheels) and INR 12.43 crores for construction hardware, executable in 36-48 months.

→No major capex planned for FY27; focus will be on utilizing the investments made so far, especially in gas nitriding and planetary gear machines.
→Small, ongoing investments in machining may occur to support existing customers, but no big casting-related capex is expected next year due to space and cost constraints.
→Discussions for future capex expected to start next year, influenced by inquiries and potential participation in upcoming wind exhibitions.
→Possible expansion plans beyond FY27, involving new machines for induction hardening and other specialized processes; these may require additional investments in subsequent years.
→Current borrowings of INR116 crores are expected to be the maximum for the ongoing projects, with no immediate plans to raise further debt for capex.

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