Simplex Castings — Q4 FY26 earnings call

Call held 29 May 2026

Management summary

Simplex Castings delivered a strong FY26 with significant growth in revenue, EBITDA, and PAT. The company is re-entering the railway bogie market after RDSO approval and sees strong potential in coke oven doors and power segments. While facing Q4 de-growth and execution challenges, management is confident in achieving its FY27 and FY28 targets, supported by strategic capital allocation and potential acquisitions.

Highlights

  • Consolidated revenue grew 18% to 202 crores in FY26.

  • EBITDA increased 20% to 37.39 crores in FY26.

  • PAT rose 40.5% to 21.26 crores in FY26.

  • Received RDSO approval to restart wagon bogie manufacturing, with capacity for 200-250 bogies per month.

  • Secured prestigious orders from Thyssen, SMS, and BHEL for steel plant expansions.

Concerns

  • Q4 FY26 revenue de-growth compared to Q4 FY25 (approx. 67 crores) due to customer site delays and gas availability.

  • Execution challenges cited due to volatile steel prices, gas availability, and labor availability.

  • High valuation expectations for potential acquisition targets in India, leading to one failed discussion.

Key financials

  1. Consolidated Revenue ₹202 Cr +18%YoY
  2. EBITDA ₹37.39 Cr +20%YoY
  3. PAT ₹21.26 Cr +40.5%YoY
  4. EBITDA Margin 18.5%
  5. PAT Margin 10.5%

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

medium confidence

Composition

Mix 2 segments
  • Power Segment ₹150 Cr 75%
  • Coke Oven Doors ₹50 Cr 25%

Share of order book by segment, derived from disclosed amounts

Pipeline

deal pipeline tcv

Discussions for 100-200 bogie orders, order potential for 2-3 coke oven batteries annually.

Management noted a steady increase in order books, particularly in railway, steel, and power sectors, with significant pipeline for bogies and coke oven doors.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹25 Cr
    • Capital for fabricated bogies ₹25 Cr
    • Working capital for fabricated bogies ₹25 Cr
    Originally, it was 25 and we stick to 25 only. ... Because we wanted to actually for the fabricated Bogies wanted to go for capital of 25 and working capital of 25.
  • Debt Debt disclosed
    I was just discussing with Mr. Avinash also and maybe from debt side, maybe from those kind of things or maybe from equity side, I do not know. But we would need to start what we are wanting. We would need to look at that also.
  • M&A Deal Acquisition · Abandoned

    High valuation expectations in India

    We were in discussions. One has failed and the other two are currently open. ... But the multiples that people are looking at in India are very very high and it was not possible for us to think on that, so we closed that.

Guidance & targets

Revenue

  • FY27 Revenue Revenue · FY27 · High confidence 300 crores
    Diya, we are targeting 300 crores in FY27, 200 from the existing business and 50 from the casted railway business. And power sectors also, roughly around 50 crores.

    — Avinash Hariharno

  • Coke Oven Doors Annual Revenue Revenue · Next 2-3 years · High confidence 100 crores

    From 50-60 crores today

    So this is 50 to 60 crore and you are saying 5-6 batteries. So this segment also can grow pretty well over the next few years. It can go from 50 crores to 100 crores. ... Yes, it should be.

    — Ketan Shah

  • FY28 Revenue Revenue · FY28 · Medium confidence 500 crores
    So one way is how much of our growth projection depends on this, you know, mega tender that is expected in the wagons. That is one way to ask the question. Or the other way to ask the question is this 500 crore target you are saying, seeing for FY28, what are the risk factors you see due to which we will not achieve this target?

    — Ketan Shah

Profitability

  • PAT Margin Profitability · Ongoing · High confidence 8-10%
    But definitely, our goal is to be in the same range of 8-10%. Minimum

    — Ketan Shah

Volume

  • Railway Bogie Production Volume · From September onwards · High confidence 200 bogies per month
    And I am expecting that from September onwards, we should be consistently making this 200 bogies, the capacity that we have generated.

    — Ketan Shah

What to watch in Q1 FY27

Railway Bogie Production Ramp-up

From September 2026
Current Capacity for 200-250 bogies/month, orders in discussion
Target Consistent production of 200 bogies/month

Why it matters

Verifies the successful re-entry into a key railway product segment and execution of new capacity.

And I am expecting that from September onwards, we should be consistently making this 200 bogies, the capacity that we have generated.

Risks & concerns

  • Execution failure for new orders and projects

    high

    Failure in execution could prevent achieving the 500 crores booking target; challenges include volatile steel, gas availability, and labor.

    Management acknowledged

  • Dependence on acquisitions for growth targets

    medium

    The 500 crore target partially relies on acquisitions, but high valuation expectations in India have made deals challenging.

    Management acknowledged

  • Reliance on EPC orders and railway projections

    medium

    Achievement of the 500 crore target is dependent on securing EPC orders and successful railway projects (locomotives, etc.).

    Management acknowledged

  • Q4 FY26 revenue de-growth

    low

    De-growth attributed to temporary issues like customer site delays and gas availability, with inventories realized in Q1 FY27.

    Management downplayed

Q&A highlights

6 direct
Bogie Capacity and Customer Base Direct
The capacity with the new CAPEX what we have built is to the tune of 200 to 250 numbers a month. ... 70-75% market is from the wagon manufacturers for new wagons and about 20-25% market is for replacement for spares and that goes to railway directly.

Clarifies the company's new bogie manufacturing capacity and target customer segments after re-entry into the market.

Asked by Rupesh

Bogie Components and Fabricated Bogies Strategy Direct
Bogies, when we are talking about, these are assembled bogies and definitely in wagons you need couplers from both sides and couplers need the draft gear and everything. So, that is the next chain of development and it is, it will, continuously we will be adding products. ... Fabricated bogies are used in locomotives and in passenger coaches and also in metro and Vande Bharat.

Outlines the product expansion strategy beyond just bogies and the new focus on fabricated bogies for high-growth railway segments.

Asked by Rupesh

Q4 FY26 Revenue De-growth and Margin Improvement Drivers Partial
Some part was hit by these availability of gases also, sir. All the fabrication plants have been affected for this because there was no gases or supplies were affected. LPG, basically. That has hit us in the top line, also yeah. ... Basically, because the situation at the moment, the market is very, very pro our kind of industry.

Explains the reasons for Q4 revenue dip (external factors) and attributes margin expansion to favorable market conditions and selective order acceptance.

Asked by Vishal

Industry Outsourcing for Large Wagon Orders Direct
Normally, my experience till 2019 is almost 20% to 25% bogies they outsource because they need to make other things also. ... So, 20-30% of that bogies which is about 6,000 bogies that they need, 20-30% should be coming out from these wagon builders.

Provides insight into the market dynamics, confirming that large wagon manufacturers outsource a significant portion of bogie requirements, creating opportunity for Simplex Castings.

Asked by Vishal

Funding for Future Growth and Capex Partial
We were looking for the second pref. to be 50 crores. Because we wanted to actually for the fabricated Bogies wanted to go for capital of 25 and working capital of 25. So I was just discussing with Mr. Avinash also and maybe from debt side, maybe from those kind of things or maybe from equity side, I do not know. But we would need to start what we are wanting.

Indicates potential need for external funding (debt or equity) to support planned capex and working capital for the new fabricated bogies business.

Asked by Dhaval Pandya

Decision on Centrifugal Roles Business Direct
Yeah, Centrifugal roles, when we had thought about, it was an investment of about one and a half to two crore rupees. ... But later, when we did a complete market survey, enough people are available, even in Western region, who are closer to the customer. ... So we decided that, you know, why get into this kind of a market? It is better to stay out because finally, you're not doing any machining. ... So we dropped that plan.

Clarifies management's strategic decision to abandon plans for centrifugal roles after market analysis, despite initial interest.

Asked by Rupesh Tatiya

Market Potential and Share in Coke Oven Doors Direct
I am not expecting, in India itself, I am not expecting that there would be a dearth for the next 10 years in coke oven batteries, the kind of requirement that we have. And we at the moment are controlling, I would be, I am very modestly saying that at least 70% of coke oven doors are being made at Simplex Castings.

Highlights the significant market opportunity and Simplex Castings' dominant market share (70%) in the coke oven doors segment, indicating strong growth potential.

Asked by Rupesh Tatiya

Risks to Achieving FY28 Revenue Target of 500 Crores Direct
The biggest risk factor I see is not, let me put it in this way. There are two, three major risk factors. Number one, if you fail in an execution, 500 crores booking will also be a problem. ... Number two, 500 has got something also in acquisition that what we talked about that was also on our mind or even the EPC that I talked about a little bit earlier. ... So execution is number one, getting some EPC orders number two, number three is railways, what the projection that we are looking at for locomotives and everything, that is also very important for 500 also.

Provides a clear outline of the key risks (execution, acquisitions, EPC/railway orders) that could impact the achievement of the ambitious FY28 revenue target.

Asked by Rupesh Tatiya

2 min read 6 chapters

Detailed narrative

Strong FY26 Financial Performance

Simplex Castings delivered a robust financial performance in FY26, with consolidated revenue growing 18% to 202 crores. EBITDA increased by 20% to 37.39 crores, demonstrating margin expansion. Most notably, PAT surged by 40.5% to 21.26 crores. The company aims to maintain its PAT margins in the range of 8-10% going forward, leveraging a pro-industry market environment.

Re-entry and Expansion in Railway Bogie Business

The company has successfully re-entered the wagon bogie manufacturing business after receiving RDSO approval, a segment they previously operated in for 20-30 years until 2019. With new CAPEX, Simplex Castings now has a capacity to produce 200-250 bogies per month. They are actively discussing orders for 100-200 bogies and expect consistent production from September 2026, targeting both wagon manufacturers (70-75% of market) and direct railway spares (20-25%). Additionally, they have a developmental order for fabricated bogies, a new product line for locomotives, Vande Bharat, and metro coaches.

Dominant Position and Growth in Coke Oven Doors

Simplex Castings holds a significant market position in the coke oven doors segment, claiming to manufacture 'at least 70%' of all such doors in India. This segment currently contributes 50-60 crores to annual revenue and is projected to grow to 100 crores within the next 2-3 years. The growth is driven by ongoing expansions in integrated steel plants, which require new coke oven batteries and replacements.

Strategic Focus and Diversification

The company's revenue strategy for FY28 projects a mix of 40% from steel, 40% from railways and power, and 20% from other sectors including defence and shipbuilding. While defence and shipbuilding products offer better margins, the primary focus for top-line growth remains on the steel, railway, and power sectors. The company is cautious about over-diversifying too quickly, prioritizing execution in core areas.

Capital Allocation and Funding Outlook

Simplex Castings incurred a CAPEX of 15 crores in FY26 and plans for 25 crores in FY27. This planned expenditure is primarily allocated to developing facilities for fabricated bogies (25 crores capital) and associated working capital (25 crores). Management indicated they might explore a mix of debt and equity to fund these requirements, acknowledging the need to start what they are planning.

Challenges and Risks to Future Targets

The company faced a Q4 FY26 revenue de-growth compared to the previous year, attributed to customer site activity delays and gas availability issues, with inventories subsequently realized in Q1 FY27. Key risks to achieving the acknowledged FY28 revenue target of 500 crores include potential execution failures, challenges in successful acquisitions (one discussion failed due to high Indian valuations), and the successful securing of EPC orders and railway projects. Management acknowledges execution as the primary challenge, citing volatile steel prices, gas availability, and labor availability.

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