Simplex Castings — Q2 FY26 earnings call

Call held 17 Nov 2025

Management summary

Simplex Castings reported a strong Q2 FY26, driven by an 89% YoY revenue growth and significant improvements in profitability. The company is undergoing a strategic transformation, dubbed 'Simplex 2.0', focusing on high-value segments like railways and defense. This shift, coupled with reduced debt and enhanced operational efficiency, positions Simplex for sustained organic growth and improved margins in the coming years.

Highlights

  • Q2 FY26 Revenue from operations stood at INR 55.4 crores, an 89% YoY growth.

  • Total revenue for Q2 FY26 was INR 55.75 crores.

  • Net Profit for Q2 FY26 was INR 5.57 crores.

  • Half-yearly total revenue reached INR 100.99 crores, with a profit of INR 10.31 crores.

  • EBITDA and PAT showed impressive improvements, reflecting the 'Simplex 2.0' transformation.

  • Strategic shift towards railways, defense, and pressure/engineering categories is underway.

  • Current debt reduced significantly to INR 50 crores from INR 135 crores in 2018.

  • Management is targeting 3x revenue growth in the next three years and EBITDA margins above 20%.

Key financials

2 periods

Headline

  • Revenue from Operations
    ₹55.4 Cr
    YoY +89%
  • Total Revenue
    ₹55.75 Cr
  • EBITDA Margin
    —
  • Half-Yearly Revenue
    ₹100.99 Cr
  • Half-Yearly Profit
    ₹10.31 Cr

Q2

  • Net Profit
    ₹5.57 Cr

What they filed

Q1 FY27: revenue up 34.8%, net profit up 44.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue29 48 67 45 55 +89%48 −1%55 −18%61 +35%
EBITDA8 10 8 9 10 +22%8 −26%11 +39%12 +26%
Net profit4 6 4 5 6 +53%5 −24%6 +66%7 +45%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

low confidence

Total value

₹65 Cr

as of 2025-09-30 inferred

Composition

  • Steel (product)
  • Capital Goods (machine tool castings, pumps, valves) (product)

Pipeline

deal pipeline tcv

Expecting INR 20-40 crores order book from power sector by December.

The quarterly order book is healthy with strong demand and repeat business. Developmental orders for railway bogies are in hand, with RDSO approval for casted bogies expected this month and fabricated bogies in the next financial year. The current order book is primarily steel and capital goods, with significant new orders anticipated from the power sector.

Source: Q&A

Capital allocation

high confidence
  • Capex Capex disclosed
    • Increasing manpower and certain machines
    No. We have to expand with the time. We have to expand the time, but we do not we have sufficient land. We have sufficient land, sufficient sheds. Increasing of manpower would be there, increasing of certain machines would be there. But maybe not a new plant is needed. (Ketan Shah, Page 7)
  • Debt Gross ₹50 Cr
    In 2018, about INR140 crores turnover was from a unit which we hyped off. Okay? So that leaves about INR70 crores, INR80 crores of business from the existing units, which has become -- which is targeting towards INR200 crores in this year. (Ketan Shah, Page 17); In 2018-'19 my total debt, fund and non-fund based was INR135 crores. Today it's INR55 crores. That Mr. Avinash can give you exact figure, non-fund and fund based. Avinash, am I right when I say INR55 crores? (Ketan Shah, Page 17); Yes, sir. Yes. INR34 crores CC and INR16 crores is bank guarantee only. (Avinash Hariharno, Page 17); INR50 crores. (Avinash Hariharno, Page 17)

Guidance & targets

Revenue

  • Revenue growth Revenue · next 3 years · Medium confidence 3x
    Just my last question. So, we are targeting almost 3x revenue in coming three years. (Prathamesh Dhiwar, Page 6); At the moment, only organic growth part. (Ketan Shah, Page 12)

    — Ketan Shah

  • Annual Revenue Revenue · this year · Medium confidence INR 200 crores
    which is targeting towards INR200 crores in this year. (Ketan Shah, Page 17)

    — Ketan Shah

Profitability

  • EBITDA Margin Profitability · next one or two years · Medium confidence >20%

    From 17-18% today

    EBITDA margins, we are expecting to increase, sir, as we are trying to develop product lines for both our units... So can we roughly estimate the EBITDA margin to be above 20%? (Tanay Jain, Page 9); We can think of that, sir. It is achievable because right now, there is not a much difference. We are already in 17%, 18% EBITDA margins. (Ketan Shah, Page 9)

    — Ketan Shah

  • PAT Profitability · FY26 · Medium confidence INR 45-50 crores
    around 8.5% to 10% PAT margins and what we are guiding is around INR500 odd crores of revenue. So, is this understanding right? We would be somewhere closing around INR45 crores, INR50 crores of PAT. (Darshil Pandya, Page 12); I am very confident of achieving the similar numbers. (Ketan Shah, Page 12)

    — Ketan Shah

Order Book

  • Power Sector Order Book Order Book · by December · Medium confidence INR 20-40 crores
    By December, we should be having a INR20 crores, INR40 crores order book of that also, from power sector. (Ketan Shah, Page 10)

    — Ketan Shah

What to watch in Q3 FY26

RDSO approval for casted bogies

next quarter
Current First inspection over, second expected this month (November 2025)
Target Approval received, order booking commenced

Why it matters

Crucial for unlocking revenue potential from the railway segment's foundry side.

The second stage is expected to be over this month only, in this month in November only. So and once you have a RDSO approval, then we can go for booking orders. So we are expecting this to be booking of order also starting from next quarter for casted bogies. (Ketan Shah, Page 10)

Risks & concerns

  • Raw material price volatility

    medium

    Commodity price increases could pose a challenge, though strategies like long-term contracts and price variation clauses are being implemented.

    Management acknowledged

  • Execution risk for new orders

    low

    The challenge is executing orders properly and on time, which the company is confident about due to its team.

    Management acknowledged

Q&A highlights

8 direct
Entry into Railway and Defense Segments Direct
Railway, we are doing it from both the sides. One is the foundry side, the other is the fabrication side. So, in the fabrication side, we already have development orders for certain bogies which railway needs for. ... And in the foundry side, we are re-entering the business that we were doing earlier, which is the casted bogies for the railway wagon, which are called the caster bogies.

Highlights the company's strategic shift and initial progress in new high-growth sectors, detailing specific product developments.

Asked by Darshil Pandya

Meaning of Simplex 2.0 Transformation Direct
Simplex 2.0, what we are looking at is like we were traditional into earlier, into steel. We are adding two more, focusing on two more sectors, that is railways and defense. And apart from the railways and defense, we are looking at other areas where we can do a value-add, because we have the basic facilities by assembling components, which would be electrical, mechanical, and trying to give a subsystem to people.

Clarifies the scope of the company's transformation beyond just new sectors to include value-added products and subsystems, moving beyond traditional steel.

Asked by Darshil Pandya

RDSO Approval Process and Timelines for Railway Products Direct
Specific product RDSO for bogie castings; for castings firstly let me tell you, it is underway, the first inspection is over and we are expecting that by end of this month for getting an RDSO clearance for the casted bogies. For fabricated bogies, the developmental order is already in place. And within the next five to six months, we are expecting that to also getting clearance for fabricated bogies.

Provides concrete timelines for regulatory approvals crucial for revenue generation from the new railway segment.

Asked by Prathamesh Dhiwar

Defense Segment Regulatory Challenges and Approvals Direct
In defense, because of the pressure and because of the limited capacity that they have available in the ordinance factory, they are going out of the way to help the supplier develop and try to support them. So there is no such thing as you need to qualify for this or that or there is no listed thing. It is the more number of ordinance factories that we enter, they will be helping us in developing those products and giving it to them.

Explains that the defense sector has a more supportive environment for new suppliers compared to railways, with less stringent qualification processes due to capacity constraints.

Asked by Raunak

Historical Revenue Dip (FY18-20) and Banking Pressure Direct
In 2018-'19, we had an order book of around INR300 crores, wherein we were already doing INR200 crores to INR225 crores of the turnover. Having that Urla unit, which we are telling you that we had to hive off, that was alone doing railway business for roughly around INR100 crores to INR150 crores. So that was our product line and which due to banks pressure and these things, we had an increase in working capital limit of INR30 crores at that moment of time.

Clarifies the reasons behind past financial challenges, including banking pressure and the forced sale of a railway-focused unit, providing context for the current turnaround.

Asked by Tanay Jain

Current Banking Relationship and Debt Reduction Direct
We previously had a consortium arrangement with State Bank as the lead banker and Bank of Baroda and Union Bank as member bankers. Now that consortium has been taken over solely by Kotak Mahindra Bank, and that you can see in financials also and which has resulted in our performances also because the banking pressure was so much that they were not allowing us the limits also. And now it has all been eased off. We are having sole banking arrangement with Kotak since last January this year only.

Indicates a significant improvement in financial stability and banking relationships, which was a major constraint in the past.

Asked by Tanay Jain

Raw Material Price Volatility and Hedging Strategy Direct
This is a big this could turn out to be a biggest challenge in our company because at the moment, everything is favorable towards us and if the commodity prices start increasing. So what we have done is in the purchase side, we have made a small team which is tracking the movement. And it is also led by our CFO, Mr. Avinash. He is trying to go in for more and more long-term contracts with SAIL and with NMDC and talking to the local branch sales office going forward to insulate us. And in the marketing side, we already started insisting on price variation clause to our customers for bigger orders.

Addresses a key industry risk and outlines proactive strategies to mitigate the impact of raw material price fluctuations, including long-term contracts and price variation clauses.

Asked by Shivakumar

Uniqueness and Niche Capabilities of Simplex Castings Direct
The product that I mentioned is called a torpedo ladle cars. It's got just the shape is like a torpedo. That's why it's called a torpedo ladle car. It's used in steel plants to carry liquid molten pig iron from the blast furnace up to the converter. ... Manufacturing wise, only two companies, one is L&T one is Simplex Castings have made it in India.

Highlights specific niche products and capabilities where Simplex Castings has a competitive advantage and limited competition, showcasing its engineering expertise.

Asked by Ankur Aggarwal

3 min read 6 chapters

Detailed narrative

Simplex 2.0 Transformation and Strategic Shift

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.

Strong Q2 FY26 Financial Performance

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.

Progress in Railway and Defense Segments

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.

Capacity, Operational Efficiency, and Market Outlook

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%.

Improved Banking Relationship and Debt Reduction

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.

Niche Capabilities and Competitive Advantage

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.

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