Pitti Engineering Limited — Q1 FY26 earnings call

Call held 8 Aug 2025

Management summary

Pitti Engineering delivered a strong Q1 FY26 performance with robust revenue and EBITDA growth, driven by improved operational efficiencies. The company announced significant capacity expansion plans to meet growing demand and secured a new high-value platform. Despite raw material shortages and US tariff uncertainties, management remains optimistic about achieving its FY26 growth targets and expects margin expansion in the coming quarters.

Highlights

  • Consolidated revenue for Q1 FY26 stood at INR 457 crores, marking a 17% year-on-year growth.

  • EBITDA for the quarter was INR 75 crores, reflecting a strong 30% year-on-year increase.

  • EBITDA margins improved to 16.5%, up 170 basis points from 14.8% in Q1 FY25.

  • Profit after tax grew by 17% year-on-year to INR 23 crores.

  • Sheet metal volumes for the quarter were approximately 16,000 metric tons.

  • The Board approved a capital expenditure of INR 150 crores to be deployed over the next 18 months for capacity expansion.

  • Secured a second platform with an existing customer for data centers, expected to generate over INR 20 crores of recurring annual revenue.

  • Management expects to achieve a top-line growth of about 15% for FY26, targeting around INR 2,000 crores in revenue.

Key financials

  1. Revenue ₹457 Cr +17%YoY
  2. EBITDA ₹75 Cr +30%YoY
  3. EBITDA Margin 16.5%
  4. PAT ₹23 Cr +17%YoY
  5. Sheet Metal Volume 16,000 metric tons
  6. Total Casting Volume 3,000 metric tons

What they filed

Q1 FY27: revenue up 15.7%, net profit up 16.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue379 364 422 382 396 +4%422 +16%390 −8%442 +16%
EBITDA59 61 71 67 69 +17%70 +15%75 +6%73 +9%
Net profit34 24 30 18 36 +6%22 −8%23 −23%21 +17%
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.

Guidance & targets

Revenue

  • Top-line growth Revenue · FY26 · High confidence 15%
    However, we remain optimistic of achieving a top line growth of about 15% for FY '26.

    — Akshay Pitti, Managing Director and Chief Executive Officer

  • Annual Revenue Revenue · FY26 · High confidence INR 2,000 crores
    I think this year itself, we should be ending around INR 2,000 crores, if you go by our guidance of 15% Y-o-Y growth.

    — Akshay Pitti, Managing Director and Chief Executive Officer

  • Annual Revenue Revenue · FY27 · Medium confidence Revised upward

    Previously INR 2,100 crores to INR 2,200 crores → Revised upward

    Okay.. But we had earlier stated that you would be doing around INR 2,100 crores to INR 2,200 crores of sales in FY '27. So, does it change? And if yes, how much? I think that should get revised upward.

    — Akshay Pitti, Managing Director and Chief Executive Officer

  • New Data Center Platform Revenue Revenue · annual recurring · High confidence INR 20 crores
    At peak revenue potential, this platform is expected to generate more than INR 20 crores of recurring annual revenue.

    — Sandip Agarwala, Chief Operating Officer for Motor and Generator Components

Capacity Utilization

  • Operating Capacity Capacity Utilization · Q4 FY26 · High confidence Near peak capacity
    Based on our current revenue run rate and FY '26 projections, we expect to operate near peak capacity for the fourth quarter of the current financial year.

    — Sandip Agarwala, Chief Operating Officer for Motor and Generator Components

Capex

  • Capital Expenditure Capex · next 18 months · High confidence INR 150 crores
    To support the next phase of growth, the Board has approved a capital expenditure of INR 150 crores to be deployed over the next 18 months.

    — Sandip Agarwala, Chief Operating Officer for Motor and Generator Components

  • Capital Expenditure (FY26) Capex · FY26 · High confidence INR 80 crores
    we will be spending somewhere around INR 80-odd crores in the current year

    — Akshay Pitti, Managing Director and Chief Executive Officer

  • Capital Expenditure (FY27) Capex · FY27 · High confidence INR 110 crores
    and the remaining INR 110 crores in FY '27.

    — Akshay Pitti, Managing Director and Chief Executive Officer

Capacity Expansion

  • Sheet Metal Capacity Capacity Expansion · post-capex · High confidence 1,08,000 metric tons per annum

    From 90,000 metric tons today

    Sheet metal capacity will increase from 90,000 metric tons to 1,08,000 metric tons per annum.

    — Sandip Agarwala, Chief Operating Officer for Motor and Generator Components

  • Machine Hour Capacity Capacity Expansion · post-capex · High confidence 7,20,000 machine hours annually

    From 6,48,000 machine hours today

    Machine hour capacity will increase from 6,48,000 machine hours to 7,20,000 machine hours annually.

    — Sandip Agarwala, Chief Operating Officer for Motor and Generator Components

  • Casting Capacity Capacity Expansion · post-capex · High confidence 24,600 metric tons

    From 18,600 metric tons today

    Casting capacity will expand from 18,600 metric tons to 24,600 metric tons.

    — Sandip Agarwala, Chief Operating Officer for Motor and Generator Components

Revenue Split

  • H1 vs H2 Revenue Revenue Split · FY26 · High confidence 45% in H1, 55% in H2
    we typically see about 45% of our annual revenue generated in H1 and the remaining 55% in H2, a pattern we expect to continue this year as well.

    — Akshay Pitti, Managing Director and Chief Executive Officer

Margin

  • EBITDA Margin Margin · coming quarter · High confidence Expansion
    we are confident in our ability to drive further margin expansion in the coming quarter.

    — Akshay Pitti, Managing Director and Chief Executive Officer

  • Margin Growth Margin · FY27 post CAPEX · High confidence Growth
    I think you should see margin growth in FY '27 post CAPEX progressively through the year.

    — Akshay Pitti, Managing Director and Chief Executive Officer

Volume

  • Annual Sheet Metal Volume Volume · current year · High confidence 68,000 tons
    our annual business plan of 68,000 tons still looks very, very achievable.

    — Akshay Pitti, Managing Director and Chief Executive Officer

  • Sheet Metal Volume Volume · Q2 FY26 · High confidence 17,500 tons
    So, for Quarter 2, if you look, we are projecting somewhere around 17,500 tons.

    — Akshay Pitti, Managing Director and Chief Executive Officer

  • Sheet Metal Volume Volume · Q4 FY26 · High confidence 19,000 tons
    Our projected volumes based on our internal calculations and visibility is about 19,000 tons for Quarter 4.

    — Shyam Maheshwari, Aditya Birla Mutual Fund

  • Casting Volume Volume · Q4 FY26 · High confidence 4,000 tons per quarter
    That will be about 4,000 tons per quarter, 30% growth rate there.

    — Akshay Pitti, Managing Director and Chief Executive Officer

Capacity Implementation

  • New Capacity Capacity Implementation · starting Q1 FY27 · High confidence Progressively implemented
    It will be progressively implemented starting Q1 of next year.

    — Akshay Pitti, Managing Director and Chief Executive Officer

Debt

  • Net Debt Debt · post-September/December · High confidence Reduction
    So, at least maybe some sort of debt reduction should happen this year. That is still possible.

    — Akshay Pitti, Managing Director and Chief Executive Officer

Inventory

  • Inventory Rationalization Inventory · post-September/December · High confidence Rationalization
    So, even with inventory rationalizing post September, as you mentioned Around December.

    — Akshay Pitti, Managing Director and Chief Executive Officer

Market Share

  • Automotive Segment Share Market Share · coming quarters · Medium confidence 10% to 12%
    on the automotive side, right now, maybe 1% or 2% kind of revenue share only, but we are targeting 10% to 12% kind of share.

    — Akshay Pitti, Managing Director and Chief Executive Officer

Risks & concerns

  • US Tariffs on Exports

    medium

    25% duty (potential 50%) impacting 9-10% of total revenue; customers may shift production to other global facilities.

    Both acknowledged

  • Raw Material Shortages

    medium

    Due to BIS/quality control orders on steel mills, impacted Q1 and expected till Q2 end; easing from September.

    Management acknowledged

  • Geopolitical Uncertainty

    low

    Acknowledged as an 'evolving situation' but management remains optimistic about growth.

    Management acknowledged

  • Global EV Market Pressure

    low

    Automotive segment growth is expected to be a 'very slow and steady process' due to global EV market pressures.

    Management acknowledged

Q&A highlights

3 direct
Increase in depreciation, finance cost, and net debt Direct
on the working capital side, if you see, we have moved from about 57 days to about 75 days in the working capital cycle. This is mainly on account of 2 issues. 1, we have stopped factoring export receivables like in the past. Therefore, the cost of finance of that particular business is not reduced from the sales. It's now coming into the interest line... Number 2, we have also stocked up a little extra raw material, considering the current situation related to BIS and import of materials... which is why our net debt has actually gone up to about INR 525 crores.

Management explained the increase in finance costs and net debt due to a strategic shift from factoring and raw material stocking amidst supply disruptions, providing clarity on these financial movements.

Asked by Sani Vishe

US tariffs, capacity expansion confidence, and new capacity absorption Direct
if you see our consolidated exports is about 31% of revenue. Of that revenue, about 30% goes to U.S. So, on a total revenue basis, the exposure to U.S. is about 9% to 10%, which is going to be impacted by this tariff... our annual business plan of 68,000 tons still looks very, very achievable. And it will be split something like 16,000 tons what we have done in the current quarter, 17,000 in the next quarter and somewhere close to 18,500 and 19,000 in the quarter 3, Quarter 4. So, if you look at our Quarter 4 run rate, that will be actually well above the optimum 80% utilization levels, which is why we have decided to go ahead and invest.

The response clarified the company's limited direct exposure to US tariffs and provided detailed volume projections justifying the confidence in new capacity absorption despite geopolitical uncertainties.

Asked by Deepesh Agarwal

Impact of quality control orders on electrical steel imports and supply chain Direct
what we did not expect or nobody in the country expected was that there would be quality control orders for even integrated steel mills, which have BIS approvals... So, that has actually resulted in a constrained supply to India of electrical steel... I think the quality control orders are already lifted for the Japanese and Korean mills in this month itself. So, we should start seeing the situation easing out from September onwards.

Management detailed the unexpected raw material shortages caused by quality control orders and provided a clear timeline for the situation to ease, impacting future volume growth in price-sensitive segments.

Asked by Rahul Kumar

2 min read 6 chapters

Detailed narrative

Robust Q1 FY26 Financial Performance

Pitti Engineering reported a strong Q1 FY26, with consolidated revenue growing 17% year-on-year to INR 457 crores. EBITDA increased by 30% year-on-year to INR 75 crores, leading to an EBITDA margin expansion of 170 basis points to 16.5%. Profit after tax also saw a healthy 17% year-on-year growth, reaching INR 23 crores. Sheet metal volumes for the quarter stood at 16,000 metric tons, aligning with historical trends of Q1 being a softer quarter.

Strategic Capacity Expansion and Capex Plans

To support its next phase of growth, the Board has approved a significant capital expenditure of INR 150 crores, to be deployed over the next 18 months. This investment will boost sheet metal capacity from 90,000 to 108,000 metric tons per annum, machine hour capacity from 648,000 to 720,000 hours annually, and casting capacity from 18,600 to 24,600 metric tons. Approximately INR 80 crores of this capex, including a carry-forward of INR 40 crores, is slated for the current financial year.

Optimistic Outlook and Strong Order Visibility

Management maintains a bullish outlook for FY26, projecting a 15% top-line growth and an annual revenue of around INR 2,000 crores. The company expects to operate near peak capacity by Q4 FY26, with sheet metal volumes projected at 19,000 tons for Q4 and 17,500 tons for Q2. A significant win includes securing a second platform for data centers with an existing customer, anticipated to generate over INR 20 crores in recurring annual revenue.

Raw Material Headwinds and Working Capital Management

Net debt increased to INR 525 crores in Q1 FY26, primarily due to a strategic decision to stop factoring export receivables and a necessary build-up of raw material inventory. This inventory stocking was a direct response to severe raw material shortages in Q1, caused by unexpected quality control orders on integrated steel mills. Management expects the supply situation to ease from September onwards, with inventory rationalization projected by December.

Navigating US Tariffs and Export Markets

The company's direct exposure to US tariffs is relatively contained, with 9-10% of total revenue derived from the US market. Management believes customers may opt to shift production to other global facilities to mitigate the impact of tariffs, particularly for mining-related components. Despite the evolving geopolitical situation and tariffs, order inputs remain robust, and Q3 is anticipated to be the best export performance quarter to date.

Diversified Segmental Growth Drivers

Pitti Engineering is witnessing strong demand across its high-margin segments, including traction motors, railway components, mining, oil & gas, renewables, and data centers. The recently commissioned revarnishing line is expected to boost hydro power-related business from Q3. While the automotive segment is a long-term focus, management anticipates a 'very slow and steady process' for growth due to global EV market pressures.

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