Paramount Speciality Forgings Ltd — Q3 FY26 earnings call

Call held 29 Jan 2026

Management summary

Paramount Speciality Forgings Limited reported approximately ₹88-90 crores in revenue up to December 2025, with a full-year FY26 target of ₹120-130 crores. The company is actively expanding its manufacturing capabilities, with a new forging plant expected to commence commercial production by April 2026, and an internal lab and solar power plant commissioning by February 2026. While operating margins have been strained by expansion costs, management anticipates 12-15% EBITDA margins from FY27 and aims for 2-2.5x revenue growth in the next 2-3 years.

Highlights

  • FY26 revenue guidance of ₹120-130 crores, indicating 15-20% growth.

  • Long-term revenue growth target of 2-2.5 times in the next 2-3 years.

  • New forging plant expected to start commercial production by April 2026, significantly boosting capacity.

  • Internal NABL-accredited lab and 1MW solar power plant commissioning by February 2026 to reduce costs and timelines.

  • Current order book of ₹50-60 crores provides revenue visibility for the next 3-4 months.

Concerns

  • Operating margins have been strained due to extra costs associated with project expansion and ancillary manufacturing activities.

  • FY25 margins were impacted by increased costs and changes in product/customer mix.

  • Q2 typically experiences slower business due to monsoons, though Q3/Q4 perform better.

Key financials

  1. Revenue (Apr-Dec 2025) ₹89 Cr

What they filed

Q4 FY26: revenue up 19.2%, net profit up 0.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue51 52 47 63 58 +14%62 +19%
EBITDA7 6 3 5 4 −43%4 −33%
Net profit3 2 2 3 2 −33%2 +0%
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

₹55 Cr

as of 2026-01-29 range

Execution

deliverable in the next 3-4 months period

Composition

Mix 2 geographies
  • Domestic 70%
  • Export 30%

Share of order book by geography

Pipeline

other

Currently in talks with several customers for long-term yearly contracts and monthly scheduled requirements in gear industry and infrastructure.

The company has a healthy order book for the next 3-4 months and is strategically eliminating customers with payment challenges while securing new contracts.

Source: Q&A

Capital allocation

high confidence
  • Capex Capex disclosed
    • Capacity expansion from 12,000 MTPA to 14,000-20,000 MTPA, including forging press and 10-ton forging hammer
    • Modernized manufacturing capabilities with automation and precision products, including CNC equipment
    • Setting up own NABL-accredited laboratory for R&D and testing
    • Installing a 1-megawatt captive solar power plant
    the entire object of the IPO was to expand our facilities further. That is adding more Capex, more production capacity. From 12,000 tons to 14, to 20,000 tons per annum, including modernized manufacturing capabilities, whereby we are introducing more automation and, precision products. In... by adding machines such as forging press, 10 ton forging hammer. These manufacturing equipments are the GAP equipments which currently Is missing from our manufacturing range. Hence, this will help us enable, secure more orders, as well as be more competitive in the range of products where we are not currently in.Secondly, we're buying... I mean, we've invested in various CNC equipments. To increase the production as well as product capabilities.We are setting up our own... laboratory. This laboratory shall get NABL accredited. This significantly reduces our dependency on external agencies, so makes it a completely integrated facility whereby all results get analyzed internally, helping us reduce cost, as well as reduce time .Overall, Enabling us to reduce our entire manufacturing process cycle and having quicker deliveries. We have already initiated the solar power plant, and look forward to commissioning that also in the month of February.
  • Debt Debt disclosed
    However, we've not increased any excess, loans or anything, or, you know, working capitals for the time being.

Guidance & targets

Revenue

  • FY26 Revenue Revenue · FY26 · High confidence ₹120-130 crores
    And look forward to achieve approximate between 120 to 130 crores in this financial year.

    — Mr. Alisagar Roshan Hararwala

  • FY26 Revenue Growth Revenue · FY26 · Medium confidence 15-20%
    we look forward to increase by 15 to... approximately between 50... anything between 15% to 20% in this year.

    — Mr. Alisagar Roshan Hararwala

  • FY27 Revenue Growth Revenue · FY27 · High confidence 20-25%
    Post-March, for the next year, we look again at a growth of between 20-25%.

    — Mr. Alisagar Roshan Hararwala

  • Long-term Revenue Growth Revenue · next 2-3 year period · High confidence 2-2.5 times
    So we look to multiply to 2 - 2.5 times in the next 2-3 year period.

    — Mr. Alisagar Roshan Hararwala

Margin

  • EBITDA Margin Margin · next year (FY27) · High confidence 12-15%
    The next year would be on, the... Earnings, it should start between 12-15%, the EBITDA margin should be there.

    — Mr. Alisagar Roshan Hararwala

Capacity Utilization

  • Existing Plant Capacity Utilization Capacity Utilization · next 2 to 3 months · High confidence 55-60%

    From 45% today

    From 45 to... we intend to take it up to 55 to 60% over the next 2 to 3 months, without any, equipment addition or anything.

    — Mr. Alisagar Roshan Hararwala

Operations

  • New Forging Plant Commercial Production Start Operations · April 2026 · High confidence April 2026
    April, we should start commercial production on the entire added facility.

    — Mr. Alisagar Roshan Hararwala

  • Internal Lab Commissioning & Analysis Start Operations · February 2026 · High confidence Feb 1, 2026
    this lab is to get commissioned by this weekend, and the calibration is to be completed by the month end. So from Feb 1st, we start internal analysis.

    — Mr. Alisagar Roshan Hararwala

  • Solar Power Plant Commissioning Operations · February 2026 · High confidence February 2026
    We have already initiated the solar power plant, and look forward to commissioning that also in the month of February.

    — Mr. Alisagar Roshan Hararwala

Certifications

  • NABL Accreditation Application Certifications · within 6 months (from Feb 2026) · High confidence within 6 months
    Thereafter, in a period of 6 months, we shall be applying for NABL accreditation.

    — Mr. Alisagar Roshan Hararwala

  • NORSOK Certification Completion Certifications · within 2-3 months · High confidence within 2-3 months
    currently, we're working on NORSOK, so we need to complete that in the next 2 to 3 months.

    — Mr. Alisagar Roshan Hararwala

  • Aerospace & Defense Registrations Completion Certifications · within 6 months to a year · High confidence within 6 months to a year
    in the next, as I said, 6 months to a year's period, we should be completing all registrations in this area.

    — Mr. Alisagar Roshan Hararwala

  • Aluminum Forging Registrations Certifications · within a year · Medium confidence within a year
    Maybe in a year's time, we should be competent... I mean, I wouldn't say competent, but we should get the registrations in place.

    — Mr. Alisagar Roshan Hararwala

Efficiency

  • Existing Plant Efficiency Increase Efficiency · from February onwards · High confidence 8-10%
    Hopefully, we should be achieving that around 8-10% increased efficiency from February onwards.

    — Mr. Alisagar Roshan Hararwala

Revenue Contribution

  • Kalapur Plant Revenue Contribution Revenue Contribution · FY27 · High confidence 75-80%
    the Kalapur plant, it plays a major role, so definitely between 75% to 80% revenue will come from that plant and we expect to do 20-25% from this plant.

    — Mr. Alisagar Roshan Hararwala

  • Kamothe Plant Revenue Contribution Revenue Contribution · FY27 · High confidence 20-25%

    — Mr. Alisagar Roshan Hararwala

What to watch in Q4 FY26

Internal Lab Commissioning & Analysis Start

February 2026
Current Commissioning this weekend (Jan 2026)
Target Internal analysis from Feb 1, 2026

Why it matters

Successful commissioning will reduce testing costs and timelines, improving operational efficiency.

this lab is to get commissioned by this weekend, and the calibration is to be completed by the month end. So from Feb 1st, we start internal analysis.

Risks & concerns

  • Operating Margin Pressure from Expansion Costs

    medium

    Operating margins are currently strained due to extra costs involved in project expansion and ancillary manufacturing activities, impacting FY25 margins.

    Management acknowledged

  • Working Capital Management and Receivables

    low

    The company is eliminating customers with challenging payment cycles and is pressing for immediate payment terms to improve working capital.

    Management acknowledged, being addressed

  • Seasonality in Business Operations

    low

    Q2 typically experiences slower business due to monsoons and other factors, but Q3 and Q4 generally show better performance.

    Management acknowledged, but manageable

Q&A highlights

8 direct
Current Order Book and Operating Margin Fall Direct
So, the order book position stands between 50... 55 crores to 60 crores. To be delivered in the next upcoming 3-4 months period. The operating margins have reduced. ... So the operating margins have been a little bit strained due to the extra costs which are involved into the product, project expansion. As well as, increased, you know, costs from all other ancillary activities of manufacturing.

Provides current order book value and explains the reasons for margin pressure, linking it to ongoing expansion costs.

Peak Revenue Potential with New Facility Direct
The peak capacity, the plant is capable of doing 200 to 220 crores. With the current infrastructure, or even maybe more. ... April commercial production starts. However, May, June, we should see, the entire workflow into the, added, the new facility.

Quantifies the significant revenue potential from the expanded capacity and provides a timeline for full operationalization.

Rationale for New Plant given Existing Capacity Utilization Direct
The gap which is there is the 10-ton hammer, which we have procured and installed with the IPO. The reason was To increase, because itself, this hammer is capable of doing the entire plant's production, if run on full capacity. Of the first plant, because the volume and the size range, it starts right from, you know, 30 kilos to 40 kilos per on, at an average, up to 150 to 200 kgs. So, which maximizes, you know, the quantum, the production, as well as... helps in... Competitiveness, which currently, in this particular range, we were not.

Clarifies that the new plant fills a critical product range gap, enhancing competitiveness and not just adding redundant capacity.

EBITDA Margin Targets for Next 3 Years Direct
As far as... EBITDA margins are there. We can do, over a period, as currently, due to the I think this year, and the next. The next year would be on, the... Earnings, it should start between 12-15%, the EBITDA margin should be there.

Provides specific forward-looking EBITDA margin guidance, indicating expected improvement post-expansion.

CAGR Growth Rate for Next 3 Years Direct
So we look to multiply to 2 - 2.5 times in the next 2-3 year period.

Sets an ambitious long-term revenue growth target, indicating significant expansion plans.

Aluminum Forging Plans and Key Customers Direct
For a potential tie-up to start... raising, start...production on this. However, at a parallel, we are working towards AS certification, which is required for manufacturing aluminium and all other, similar graded forgings for aerospace industry. ... Maybe in a year's time, we should be competent... I mean, I wouldn't say competent, but we should get the registrations in place.

Details the company's strategic entry into aluminum forgings, particularly for aerospace, and the certification pathway.

Incremental Revenue from New Customers and Long-term Relationships Direct
All customers, there are, from these 10 to 12 customers who have been added. Few of them are, multinational, some of them are, Indian majors, and as far as revenue is concerned, we've added... you can say approximately, we've secured approximate around 8 to... 7-8% of, you know, new business from these customers already.

Quantifies the contribution from new customer additions and emphasizes the strategy of building long-term relationships for sustained growth.

Entry into Aerospace and Defense Sector Direct
Yes, very much.We are working towards it. However, we're building the entire plant to get into full, you know. Once the expansion is completed, we'll start working towards registration on all of these areas. However, the timelines are a little longer for registrations in this field, so hopefully in the next, as I said, 6 months to a year's period, we should be completing all registrations in this area.

Confirms the strategic focus on aerospace and defense, outlining the timeline for necessary registrations post-expansion.

2 min read 5 chapters

Detailed narrative

Strategic Capacity Expansion and Modernization

Paramount Speciality Forgings is undertaking a significant expansion project aimed at increasing its production capacity from 12,000 MTPA to a range of 14,000-20,000 MTPA. This expansion includes the addition of a 10-ton forging hammer, a forging press, and various CNC equipment to address existing manufacturing gaps and enable the production of more precise and complex products. The new facility is anticipated to commence commercial production by April 2026, which is expected to substantially boost future revenue and margins.

Operational Efficiency and Cost Reduction Initiatives

To enhance operational efficiency and reduce costs, the company is commissioning an internal NABL-accredited laboratory by February 2026. This lab will significantly cut down testing timelines and costs by reducing reliance on external agencies. Concurrently, a 1-megawatt captive solar power plant is slated for commissioning in February 2026, which is projected to substantially lower manufacturing electricity expenses. These combined efforts are expected to improve the overall efficiency of existing plants by 8-10% from February onwards.

Financial Performance and Future Outlook

For the current financial year (FY26), Paramount Speciality Forgings has achieved approximately ₹88-90 crores in revenue up to December 2025. The company projects to reach ₹120-130 crores by the end of FY26, representing a 15-20% growth. Looking ahead, management anticipates a 20-25% revenue growth for FY27 and aims to multiply its revenue by 2-2.5 times over the next 2-3 years. While operating margins have been temporarily strained by expansion-related costs, EBITDA margins are expected to stabilize at 12-15% from FY27.

Order Book and Customer Relationship Strategy

The company's current order book stands at ₹50-60 crores, with a delivery timeline of 3-4 months. Paramount is actively expanding its customer base, adding 10-15 new clients quarterly, which have contributed approximately 7-8% of new business. The strategy focuses on cultivating long-term relationships with multinational and major Indian clients. Furthermore, the company is strategically disengaging from customers with challenging payment cycles to optimize receivables and improve working capital management.

Market Diversification and Certification Pursuits

Paramount is actively pursuing various industry-specific certifications to broaden its market reach and product offerings. This includes working towards NORSOK certification, expected within the next 2-3 months, which will enable the supply of complex, corrosion-resistant steels. The company is also targeting AS certification for aluminum forgings, particularly for the aerospace sector, with registrations anticipated within a year. Overall registrations for the aerospace and defense sectors are expected to be completed within 6 months to a year post-expansion.

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