Simplex Castings — Q3 FY26 earnings call

Call held 10 Feb 2026

Management summary

Simplex Castings focused on strategic initiatives and capacity readiness in Q3 FY26, leading to softer EBITDA margins but maintained PAT margins. The company secured a significant fundraise to scale its railway bogies business and diversify its product offerings. Management expressed confidence in achieving long-term growth targets driven by strong order visibility in steel, railway, and power sectors, alongside improved working capital management.

Highlights

  • Q3 FY26 PAT margins maintained at 10%, supported by 1.6 crores of non-recurring other income.

  • Current quarterly order book stands above 100 crores, providing healthy revenue visibility.

  • Successfully completed a 50.15 crores fundraise, with 50% allocated to capital expenses for railway bogies and fabrication facilities.

  • Targeting 40-50% CAGR over the next 3 years with a sustained 10% margin.

  • Railways are expected to be the biggest contributor to future growth, with casted bogies anticipated in FY26/27 and fabricated components by 2027-28.

  • Strategic shift towards moving 'up the chain' by offering completely machined castings and assembly services, differentiating from traditional foundry work.

  • Working capital cycle targeted to improve to 30-45 days for new products and a blended 3 months overall.

  • Received a new order of approximately 13 crores for steel plants through ThyssenKrupp, indicating the start of new order inflows.

Key financials

  1. PAT Margin 10%
  2. Other Income ₹1.6 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

high confidence

Total value

₹100 Cr

as of 2025-12-31 quantified

Inflow this quarter

₹13 Cr

Composition

Mix 4 segments
  • Steel Plant Booking 50%
  • Fabrication (Power Industry) 30%
  • Gearbox, Pump, Machine Tool Industry 20%
  • Shipbuilding (Mazgaon Dock) 5%

Share of order book by segment· categories overlap, and sum to 105%

Pipeline

qualified rfp

Sizable business from OEMs for PSUs and other plants from submitted offers.

The current quarterly order book is above 100 crores, providing healthy revenue visibility, with new orders from marquee customers like BHEL, Mazgaon Dock, and Gaza Engineering.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹25.075 Cr 50% of 50.15 crores fundraise
    • Expansion of sheds and fabrication facilities
    • Railway bogies business
    About 50% will be allocated towards capital expenses, for expansion of sheds and fabrication facilities, and for the railway bogeys
  • Debt Debt disclosed
    We have begun working on deleveraging balance sheets, tightening working capital management, and faster receivable realization.
  • Liquidity Undrawn ₹34 Cr Company has a CC limit from Kotak of 34 Crores and allocated 25 crores from fundraise for working capital needs.
    We have a CC limit from Kotak of 34 Crores and, from the fundraise, we are targeting 25 crores, towards Capex and 25 towards working capital needs.

Guidance & targets

Revenue

  • CAGR Revenue · next 3 years · High confidence 40-50%
    Also, you have outlined a targeted 40 to 50% CAGR over the next 3 years, with a sustained 10% margin.

    — Ketan Shah

  • Dhanush Project Revenue Revenue · couple of years' time · Medium confidence 10-15 crores
    In a couple of years' time, it should be in the range of maybe 10 to 15 crores.

    — Ketan Shah

Margin

  • Sustained Margin Margin · next 3 years · High confidence 10%
    Also, you have outlined a targeted 40 to 50% CAGR over the next 3 years, with a sustained 10% margin.

    — Ketan Shah

  • Overall Margin Improvement Margin · this financial year · Medium confidence couple of percentage more
    I am targeting at least a couple of percentage more than this financial year.

    — Ketan Shah

Product Mix

  • Railway Products Share of Topline Product Mix · 2027-28 · Medium confidence 50%
    in 2027-28, we'll be adding fabricated bogies components. These, will make the company switch over from a jobbing to a product line, maybe for 50% of the topline.

    — Avinash Hariharno

Working Capital

  • Blended Working Capital Days Working Capital · outer side · Medium confidence 3 months
    My expectation would be, on the outer side, 3 months.

    — Ketan Shah

  • Working Capital Days (New Products) Working Capital · ongoing · High confidence 30-45 days
    For these products, that's definitely 30-45.

    — Ketan Shah

What to watch in Q4 FY26

RDSO approval for casted railway bogies

Next quarter
Current Awaiting final signature
Target Approval received, order booking initiated

Why it matters

Unlocks significant revenue from a legacy railway business segment.

Railways, on the casted bogie, the investment that we have done earlier, that should also bring fruit now, because the final signature from RDSO, that is all that we are waiting for. Rest, everything is done. assessment and everything is done. We're just waiting for the clearance from them, so that we can go ahead and start booking orders for the casted bogies also.

Risks & concerns

  • Working Capital Stress

    medium

    Past working capital issues led to hiving off a railway unit; management assures this is addressed by fundraise and current market conditions.

    Analyst acknowledged

  • Product Mix & Margin Pressure

    low

    EBITDA margins were soft this quarter due to product mix; management expects improvement with strategic focus on higher-margin products.

    Management acknowledged

  • Execution Delays

    low

    Management noted that execution and delivery parts need to be managed carefully, implying potential for delays if not handled well.

    Management acknowledged

Q&A highlights

7 direct
Order book breakup and new order wins Direct
If I have to break it up broadly, the steel plant is still the major contributor. It's about almost close to 50% is steel plant booking that we have. And a good 30%, including Gaja Engineering, is from the fabrication side of power industry... Mazgaon Dock was something shipbuilding, which will be seeing more of it in the shipbuilding industry. This was a restart of an old thing that we were doing, old order, and this is about 5-6%.

Clarifies the composition of the current order book and the nature of new orders, particularly in shipbuilding.

Asked by Bhavin Dedhia

Q3 margin softness and other income Direct
No, no, no, that is not of a recurring nature, sir. That was an income from, gratuity fund, so this is one-time arrangement only.

Explains that the maintenance of PAT margins despite soft EBITDA was due to a non-recurring income, providing clarity on underlying profitability.

Asked by Bhavin Dedhia

Revenue decline from 2018-19 levels Direct
In 2018-19 sir, we had, one of the railway-dedicated units at Urla. which was continuously doing, railway products... So that was the reason why topline has declined, we had to hive off, in 2019, that unit, which was continuously doing railway business.

Provides historical context for the company's revenue trajectory and explains the strategic decision to hive off a railway unit due to banking challenges.

Asked by Praneeth Bommisetti

Future working capital challenges Direct
Not with this type of situation, sir, where all the sectors are booming, and we are having your support also. Not relying on the banking channels right now, so we don't expect anything.

Addresses investor concerns about potential recurrence of past working capital issues, highlighting current market conditions and diversified funding.

Asked by Praneeth Bommisetti

Examples of moving 'up the chain' Direct
Up the chain, say, for example, in steel plants, if I start. We're giving Sinter Car assemblies so, from Sinter Cars and Pellet Cars assemblies, we started giving other items also, other associated, the sprockets, the turning system, the guiding system, and all those kind of things. Which was being imported, so we got into that.

Illustrates the company's strategy of value addition and diversification beyond basic castings into more complex, machined components and assemblies.

Asked by Praneeth Bommisetti

Aggressiveness in capacity addition Partial
No, at the moment, we are going ahead and adding capacity in the fabrication unit we have, and then we are looking at other areas also, like, you know, we have an offer from Arcellor Mittal Nippon Steel... Only thing is, we are still considering that, whether we should be having a unit in Vishakapatnam, next to them, next to where the plant is coming.

Reveals strategic considerations for future capacity expansion, including potential new plant locations and partnerships, balancing growth with operational prudence.

Asked by Praneeth Bommisetti

Overall market opportunity and Simplex 3.0 vision Direct
For the next couple of years, consciously, we have taken a decision just to focus on what we are doing, what we are planning. After two, two and a half years, once these things are all streamlined. Yes, SIMPLEX 3.0 will be slightly different, it will be looking at worldview, not at a domestic view, the way we are looking at it now.

Provides insight into management's long-term vision and phased approach to growth, indicating a future shift towards a more global perspective.

Asked by Dhaval

Working capital cycle improvement Direct
We'll try to bring it down to maybe 30 days or 45 days within this thing... My expectation would be, on the outer side, 3 months.

Quantifies the expected improvement in working capital days, which is crucial for cash flow and financial health in a capital-intensive sector.

Asked by Praneeth Bommisetti

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance and Strategic Focus

Simplex Castings reported Q3 FY26 with softer EBITDA margins, but PAT margins were maintained at 10%, aided by a non-recurring other income of 1.6 crores from a gratuity fund. Management emphasized that the quarter's performance reflected conscious efforts towards strategic initiatives, capacity readiness, and internal process strengthening rather than a lack of demand. The company remains confident in achieving its FY26 stated guidelines and noted that its 9-month performance is significantly better than the previous year.

Robust Order Book and Diversification

The company's current quarterly order book stands above 100 crores, providing healthy revenue visibility. The order book composition is diversified, with steel plant bookings contributing nearly 50%, fabrication for the power industry (including BHEL and Gaja Engineering) accounting for 30%, and the remaining 20% distributed across gearbox, pump, and machine tool industries. Shipbuilding, including orders from Mazgaon Dock, represents 5-6% of the order book, marking a restart in this segment.

Successful Fundraise and Capital Allocation

A key milestone in Q3 FY26 was the successful completion of a 50.15 crores fundraise. Approximately 50% (25.075 crores) of these proceeds are earmarked for capital expenses, specifically for the expansion of sheds, fabrication facilities, and the railway bogies business. The remaining 50% is allocated towards incremental working capital requirements to support the anticipated increase in turnover. The company also maintains a CC limit of 34 crores from Kotak.

Revival of Railway Business and Future Growth

Simplex Castings is actively re-entering and scaling its legacy railway bogies business, both fabricated and casted. While trial orders for fabricated bogies are underway, the casted bogies business is awaiting final RDSO approval, which is expected to bring significant fruit from prior investments. Management anticipates the railway sector to be the biggest contributor to future growth, with fabricated bogies components being added by 2027-28, potentially making railway products 50% of the topline.

'Up the Chain' Strategy and Value Addition

The company is strategically moving 'up the value chain' by offering more complex, value-added products and services. This includes providing completely machined castings, such as Sinter Car assemblies and valve castings, which were previously imported. The goal is to evolve from being solely a foundry to a solution provider, capable of assembly and delivering complete products, thereby differentiating itself and improving margins.

Power Sector Opportunity and Capacity Expansion

Management sees tremendous growth opportunities in the power sector for the next 4-5 years, with significant orders from Adani and NTPC. The company is working with BHEL and L&T on fabricated equipment, castings, and structures for coal-based power plants. While considering a new unit in Vishakapatnam near Arcellor Mittal Nippon Steel, the company is prudently managing capacity expansion based on management and financial bandwidth, aiming for a 6-8 month timeline for fabricated bogies capacity.

Working Capital Management and Efficiency

Simplex Castings is focused on improving its working capital management, including deleveraging balance sheets and faster receivable realization. Enrollment in platforms like Invoice Mart and TREDs is expected to shorten the working capital cycle. Management targets a reduction to 30-45 days for new products and a blended average of 3 months (90 days) for the overall working capital cycle, enhancing cash flow efficiency.

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