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    Paramount Speciality Forgings Ltd

    PSFL
    Capital Goods·13 Jun 2026
    Management Summary

    Paramount Speciality Forgings Limited (PSFL) reported on its H2 & FY26 performance, highlighting significant capacity expansion plans with new forging equipment and solar power initiatives aimed at increasing output and reducing costs. The company is diversifying its product portfolio and customer base, targeting substantial revenue growth for FY27 and FY28. However, management acknowledged a dip in past EBITDA margins and anticipates challenges in achieving long-term margin targets in FY27 due to increased depreciation and market volatility.

    Highlights

    5

    • Targeting FY27 revenue of 150-160 crores and FY28 revenue of approximately 200 crores, indicating strong growth outlook.

    • Capacity expansion with a 10-ton forging hammer and a 2,000-ton forging press is expected to increase output to 6,000 to 8,000 tons per annum.

    • Successfully commissioned internal testing laboratory in Feb 2026 and expects NABL accreditation in a couple of months, opening new business avenues.

    • Solar power plant with 750 kilowatts is live, with plans to expand to 1 MW by June end and 1.3-1.4 MW total, projected to save 25-30% on electrical costs.

    • Actively pursuing registrations with foreign oil companies (e.g., Adnoc, Qatar Oil, Saudi Aramco) and expanding into aerospace and defense sectors by end of H2 FY27.

    Concerns

    3

    • EBITDA margins dipped to approximately 6% in the last year due to cost increases and industry fluctuations, with a sustainable target of 14-15% appearing difficult for FY27.

    • Higher depreciation from the capitalization of the entire plant in FY27 is expected to impact overall earnings and profitability.

    • H1 FY27 performance is anticipated to be similar to H2 FY26, with a targeted H2 FY27 EBITDA margin of 8-10%, lower than the long-term sustainable target.

    Key financials

    Single quarter

    02 metrics
    1. 01Revenue₹120 Cr
    2. 02EBITDA Margin6%

    Order Book

    high confidence

    Total Value

    ₹ 47.5 crores

    as of 2026-06-13

    range

    Execution

    executable in the next 3 to 5 months

    Composition

    Mix2 client types
    • Domestic75.0%
    • Exports25.0%

    Share of order book by client type

    Pipeline

    other

    Intend to increase order book position to approximately 60 to 70 crores in next 3-4 months.

    "The company aims to increase its order book by improving delivery lead times and actively marketing its expanded capacity to new customers."

    Source:
    Q&A

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Capex

    ₹23.5 crores

    new plan — additional machining centers and other enhancements

    Guidance & targets

    12
    CategoryTargetPriority
    Revenue
    FY27 Revenue
    150 to 160 crores
    		High
    Revenue
    FY28 Revenue
    approximately 200 crores
    		Medium
    Margin
    Sustainable EBITDA Margin
    14-15%
    		Medium
    Margin
    H2 FY27 EBITDA Margin
    8-10%
    		Medium
    Capacity
    Output Increase
    6,000 to 8,000 tons per annum
    		High
    Efficiency
    Manufacturing Efficiency
    55-60% of installed capacities
    		Medium
    Solar Power
    Solar Capacity
    1 MW
    		High
    Solar Power
    Total Solar Capacity
    1.3 to 1.4 megawatts
    		High
    Order Book
    Order Book Position
    60 to 70 crores
    		High
    Accreditation
    NABL Accreditation
    Acquire same
    		High
    Registration
    Adnoc Registration
    Complete entire process
    		High
    New Market Entry
    Aerospace and Defense Sector Entry
    Enter seamlessly
    		Medium

    NABL Accreditation Status

    Next couple of months
    CurrentApplied, in progress
    TargetAccreditation acquired

    Why it matters

    NABL accreditation will open new business avenues for testing services, contributing to revenue diversification.

    Hopefully💬, in a couple of months, we should acquire the same. On acquisition of on acquiring the accreditations from NABL. It creates another business avenue to increase our presence, not only into our manufacturing sector, but to carry out and open another chain of business. to cater to industry needs, or for testing for other companies as well.

    How to verify

    guidance_and_targets[metric='NABL Accreditation']

    Risks & concerns

    4
    RiskSeverity

    EBITDA margin pressure due to rising costs and market volatility

    EBITDA margins dipped to ~6% in the last year, and current market scenario (war, price increase) is causing manufacturing costs to rise, impacting margins. — Management acknowledged

    medium

    Impact of higher depreciation on FY27 profitability

    The capitalization of new plant and equipment in FY27 will lead to significantly higher depreciation, making the 14-15% EBITDA margin target difficult to achieve in the short term. — Management acknowledged

    medium

    Slower turnaround times for nuclear projects

    The nature of nuclear projects is critical, requiring staged inspection and resulting in slower turnaround times compared to other sectors. — Management acknowledged

    low

    Longer manufacturing cycles impacting profitability

    Currently, the company experiences longer manufacturing cycles, which they are addressing through internal quality control and flexibility improvements to save lead times and improve profitability. — Management acknowledged

    low

    Q&A highlights

    8

    “So, FY27, we could be able to cover up by another 10, as I said, for example, with the existing infrastructure, which is already available to us, we're looking forward to improve the efficiency by another 3-4%. So, eventually, from last year, we're trying to get it to approximately another 10% from our last year's performance.”

    Clarifies the immediate impact of efficiency improvements and new machinery on capacity and output for the upcoming fiscal year.

    asked by Tanmoy Roy

    2 min read6 chapters

    Detailed Narrative

    01

    Capacity Expansion and Modernization

    Paramount Speciality Forgings Limited is undertaking a significant expansion at its Kalapur facility, installing a 10-ton forging hammer and a 2,000-ton forging press. This expansion, along with a 1,000-ton trim press and ancillary infrastructure, is expected to increase the company's output to 6,000 to 8,000 tons per annum. Commercial production from these new facilities is envisaged to start in H1 FY27, which will enable the company to address manufacturing gaps and enhance competitiveness.

    02

    Diversification and New Market Entry

    The company is actively diversifying its product range beyond oil and gas, into petrochemicals, engineering, heavy engineering, railways, and infrastructure. It is also gearing up to enter niche and critical areas like aerospace and defense sectors by the end of H2 FY27, focusing on high complex metallurgical steels. Efforts are underway to register with foreign oil companies like Adnoc, Qatar Oil, KOC, KNBC, and Saudi Aramco, with Adnoc registration expected to complete in 3-5 months.

    03

    Green Initiatives and Cost Savings

    PSFL has successfully commissioned a solar power plant with 750 kilowatts already operational. The company plans to complete the entire 1 MW installation by June end and further expand to 1.3-1.4 megawatts within six months. This initiative is projected to reduce electrical consumption costs by 25-30% and has a realistic payback period of 3-3.5 years, contributing to both sustainability and cost efficiency.

    04

    Financial Performance and Outlook

    The company reported a current annual revenue of 120 crores for FY26, with a last year's EBITDA margin of approximately 6%. Management targets FY27 revenue of 150-160 crores and FY28 revenue of around 200 crores. A sustainable EBITDA margin of 14-15% is aimed for, though FY27 is expected to be challenging due to higher depreciation from plant capitalization, with H2 FY27 EBITDA margin targeted at 8-10%.

    05

    Order Book and Execution

    The current order book stands at 45-50 crores, with an execution timeline of 3-5 months. The company aims to increase its order book position to 60-70 crores within the next 3-4 months by improving delivery lead times. The revenue mix is approximately 75% domestic and 25% exports, with Middle East exposure being less than 2% of the business. Management is actively marketing its expanded capacity to secure long-term contracts.

    06

    Operational Efficiency and Quality Control

    PSFL has improved manufacturing efficiency by 3-4% with existing capacity and aims for another 3-4% improvement in the current year, targeting 55-60% utilization of installed capacities. An internal testing laboratory, commissioned in Feb 2026, is awaiting NABL accreditation within a couple of months. This lab will enhance internal quality control, provide flexibility for mandatory tests, and reduce lead times, ultimately improving profitability.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.