Simplex Castings

Simplex Castings is undergoing a significant transformation, branded 'Simplex 2.0', moving from traditional metal and commodity-linked segments to high-value areas like railways, defense, and pressure/engineering. This strategic pivot leverages existing machinery and skilled manpower. The company aims to not only enter these new sectors but also add value by assembling electrical and mechanical components to offer subsystems, thereby moving up the value chain. This shift is expected to drive future growth and resilience.

The company reported robust financial results for Q2 FY26, with revenue from operations growing 89% year-on-year to INR 55.4 crores. Total revenue for the quarter was INR 55.75 crores, leading to a net profit of INR 5.57 crores. For the half-year ended September 30, 2025, total revenue stood at INR 100.99 crores with a profit of INR 10.31 crores. These figures demonstrate impressive improvements in both EBITDA and PAT, validating the strategic decisions and execution by the team.

In the railway sector, Simplex is pursuing opportunities in both foundry and fabrication. Developmental orders for fabricated bogies (four sets for four locomotives) are currently under manufacturing and expected to be delivered for testing within this financial year. For casted bogies, the first RDSO inspection is complete, with final approval anticipated by the end of November, enabling order booking from the next quarter. In defense, the company has received trial orders for fabrication and machining of components for Gun Carriage Factory, Jabalpur, benefiting from the government's push for indigenous manufacturing and the limited capacity of ordinance factories.

Simplex Castings is enhancing its capacity and operational efficiency to support its growth ambitions. While a new plant may not be immediately necessary, investments in increasing manpower and certain machines are planned. The management notes a positive momentum across all sectors it operates in, including steel, power, railways, and defense, driven by India's manufacturing capex cycle. The company expects to achieve 3x revenue growth in the next three years, with steel still contributing around 40% of revenue, and aims for EBITDA margins above 20%.

The company has significantly improved its financial health and banking relationships. Previously operating under a consortium arrangement, Simplex now has a sole banking relationship with Kotak Mahindra Bank since January this year. This change has eased banking pressures that previously constrained working capital limits. Total debt has been substantially reduced from INR 135 crores in 2018 to INR 50 crores currently (INR 34 crores CC and INR 16 crores bank guarantee), providing a stronger financial foundation for future growth.

Simplex Castings highlights its unique capabilities, particularly in niche products like torpedo ladle cars for steel plants, where it is one of only two manufacturers in India. The company also possesses a strong internal design team capable of developing complex products, reverse engineering, and import substitution, which differentiates it from other foundries that often focus on repetitive business. This expertise allows Simplex to cater to specialized requirements across various industries, including shipbuilding and mining.