Thaai — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Thaai Casting Limited delivered strong H1 FY26 results with 15% YoY revenue growth and healthy margins. The company secured new orders, boosting its order book to INR 522.79 crores, and completed a capital raise of INR 31.49 crores. However, customer-side delays led to the postponement of a significant INR 91 crore order and delayed the commissioning of new gas nitriding furnaces, impacting near-term revenue realization.

Highlights

  • Consolidated revenue grew 15% year-on-year to INR 62.25 crores in H1 FY26.

  • EBITDA increased by 12.59% to INR 16.33 crores, maintaining a strong margin of 26.23%.

  • Net profit rose by 14.93% to INR 6.18 crores, with a net margin of 9.92%.

  • Secured new orders contributing to a total order book of INR 522.79 crores, ensuring 3-5 years of revenue visibility.

  • Successfully raised INR 31.49 crores through preferential allotment to strengthen operations and capacity expansion.

Concerns

  • A significant INR 91 crore order was postponed to July 2026 due to customer-side delays, impacting H1 FY26 performance.

  • Installation of three new gas nitriding furnaces is delayed to June/July 2026 due to customer construction issues.

  • High revenue concentration with 75-80% coming from a few major OEMs (Hyundai, Kia, Maruti Suzuki).

Key financials

  1. Revenue ₹62.25 Cr +15%YoY
  2. EBITDA ₹16.33 Cr +12.6%YoY
  3. EBITDA Margin 26.2%
  4. Net Profit ₹6.18 Cr +14.9%YoY
  5. Net Margin 9.9%

What they filed

Q4 FY26: revenue up 72.9%, net profit down 12.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue48 48 53 69 62 +29%83 +73%
EBITDA15 15 14 16 16 +7%20 +33%
Net profit8 8 6 6 6 −25%7 −12%
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

₹522.79 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹138.96 Cr

Execution

Varies from 36 months, 60 months to 80 months for different orders, providing 3-5 years revenue visibility.

Composition

  • Automotive (segment) ₹522.79 Cr 100%

Cancellations & deferrals

  • deferred: An order with a cumulative value of INR 91 crores, executable over 60 months, was postponed to July 2026.
The company's order book provides solid revenue visibility for the next three to five years, primarily driven by the automotive segment.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed New plan — Focus on utilizing existing investments, future expansion in subsequent years.
    Next year, definitely, we will not be going for any capex because next year, entire full year, we will be concentrating the whatever we have invested. So, that will be completed. But the discussion definitely will start next year because there is a wind exhibition has happened this month beginning in Chennai. Investment will be the subsequent years.
  • Debt Gross ₹116 Cr Cost 8%
    INR7.95, my banking rate of interest. The other bank is INR8.2. Okay, we are at INR116 crores. No, sir. For this project, we are closing with this borrowings, sir.

Guidance & targets

Revenue

  • FY26 Revenue Revenue · FY26 · High confidence ₹150 crores
    Are we considering of achieving this INR150 crores for this year? Yes. This percentage, considering this postponed.

    — Management

  • H2 FY26 Gas Nitriding Revenue Revenue · H2 FY26 · High confidence ₹6.5-7 crores
    We are expecting maybe INR6.5 crores to INR7 crores in the second half.

    — Management

  • Annual Revenue from 3 Gas Nitriding Furnaces Revenue · Annual · High confidence ₹13 crores
    On my annual revenue for three furnaces. One second. Around 13, sir. Yes, 13. Correct. Correct.

    — Management

  • Annual Revenue from Planetary Gear Machines (Full Volume) Revenue · Annual · High confidence ₹40 crores
    Actually, that volume, we can go around INR40 crores annual volume.

    — Management

  • FY27 Revenue from Planetary Gear Machines (Partial Year) Revenue · FY27 · High confidence ₹25 crores
    So, taking all that in account, we can expect around INR25 crores? It is not the development part, it is already they are importing.

    — Management

  • H2 FY27 Revenue from Gas Nitriding (6 Furnaces) Revenue · H2 FY27 · High confidence ₹25 crores
    So, for H2 of next financial year, you should be able to generate close to INR25 crores from gas nitriding itself. Correct? Correct. Correct.

    — Management

Margin

  • EBITDA Margin for Gas Nitriding & Planetary Gear Machines Margin · Ongoing · High confidence 14%
    Okay. Sir, you had said, the expectation, EBITDA margin expected from this is around 14% or so. Would you be able to achieve that or would it take some time to achieve that? Yes, we are achieving the change, sir. That is same like nitriding.

    — Management

What to watch in Q3 FY26

Commissioning of 3 New Gas Nitriding Furnaces

Next quarter
Current Customer construction delayed, ready by March 2026
Target Start operations in June/July 2026

Why it matters

Crucial for realizing H2 FY26 and FY27 revenue targets from this high-margin segment.

Our customer has purchased another German company in India that is near to Chennai. So, for that, they have asked to put another three furnaces under construction. So, earlier that before March. So, customer construction is getting delayed. So, on June, July, it will start another three furnaces in line.

Risks & concerns

  • Customer-side delays impacting order execution and capacity commissioning

    medium

    A significant INR 91 crore order was postponed to July 2026, and new gas nitriding furnace installations are delayed due to customer construction issues.

    Management acknowledged

  • High revenue concentration from key OEMs

    medium

    75-80% of the company's total revenue is concentrated among a few major OEMs (Hyundai, Kia, Maruti Suzuki).

    Analyst acknowledged

  • Potential dilution of overall margins due to higher casting volume

    low

    While specialized products offer higher margins, increased casting volume in the future might dilute the overall company margins.

    Management acknowledged

Q&A highlights

8 direct
Impact of GST reduction on order inflow Direct
This is not reflecting to us, sir. Because in the recession time also, the same production was running by the OEMs.

Clarifies that recent GST reductions have not directly impacted the company's order inflow.

Asked by Damodar Baliga

Status and revenue potential of gas nitriding business Direct
Gas nitriding, third one also started running, sir. In H1, we did service charge around INR4.5 crores. We are expecting maybe INR6.5 crores to INR7 crores in the second half. On my annual revenue for three furnaces... Around 13, sir.

Provides specific H1 and H2 revenue figures for the gas nitriding segment and confirms annual revenue potential from existing furnaces.

Asked by Damodar Baliga

Delays in commissioning new gas nitriding furnaces Direct
Our customer has purchased another German company in India that is near to Chennai. So, for that, they have asked to put another three furnaces under construction. So, earlier that before March. So, customer construction is getting delayed. So, on June, July, it will start another three furnaces in line.

Highlights customer-side delays impacting the timeline for new capacity addition and revenue generation from this segment.

Asked by Damodar Baliga

Status and revenue potential of planetary gear machines Direct
Shed is almost completed, sir. The final stage of completion of shed, factory shed. So, a few machines already we received. ... So, we target everything in place by February, sir. Installation will complete and everything we are trying to complete by March. April, we should be able to make, send the samples and the approval process, everything. Actually, that volume, we can go around INR40 crores annual volume.

Provides a detailed timeline for commissioning and the full annual revenue potential for the new planetary gear machines segment.

Asked by Damodar Baliga

Future capex plans and investment strategy Direct
Next year, definitely, we will not be going for any capex because next year, entire full year, we will be concentrating the whatever we have invested. So, that will be completed. Investment will be the subsequent years.

Clarifies the company's near-term capital expenditure strategy, indicating a focus on existing investments rather than new large capex.

Asked by Damodar Baliga

FY26 revenue target confirmation Direct
Are we considering of achieving this INR150 crores for this year? Yes. This percentage, considering this postponed.

Reaffirms the full-year revenue guidance despite H1 performance and project delays.

Asked by Bhagwat

Reasons for H1 order book not translating to stronger performance Direct
No, just I was explaining the previous call. It is customer-side delay. Yes, a detailed explanation I just gave. Its customer delay.

Addresses concerns about execution bottlenecks and attributes performance gaps to external customer-related delays.

Asked by P Sinha

Entry into the defense sector Direct
This got approved. Earlier when I told itself we got approved as a vendor. So, in recent days, we tried the parts also they were very happy with the samples. Now, we are making the purchase order. In a week's time, we are expecting the purchase order for the trial order.

Signals successful entry into a new strategic sector with a trial order expected soon, indicating future growth potential.

Asked by Damodar Baliga

2 min read 6 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

Thaai Casting Limited reported a robust H1 FY26, with consolidated revenue reaching INR 62.25 crores, marking a 15% year-on-year growth. EBITDA increased by 12.59% to INR 16.33 crores, maintaining a strong margin of 26.23%. Net profit rose by 14.93% to INR 6.18 crores, achieving a net margin of 9.92%. These results underscore the company's operational consistency and effective cost management.

Strong Order Book and Revenue Visibility

The company's order book stands at INR 522.79 crores, providing significant revenue visibility for the next three to five years. This includes two new domestic orders: one valued at INR 126.53 crores for automotive and non-automotive components (60-80 months execution) and another for INR 12.43 crores for construction hardware components (36-48 months execution), sourced from a Canadian company relocating production to India. The entire announced order book is stated to be for the automotive segment.

Capital Infusion and Future Capex Strategy

Thaai Casting successfully raised INR 31.49 crores through a preferential allotment of equity shares, convertible warrants, and unsecured CCDs. This capital infusion is intended to strengthen operations and support capacity expansion. Management indicated no significant capex for FY27, focusing instead on optimizing existing investments, with future large-scale expansions for aluminum die casting planned for subsequent years, requiring new facilities.

Expansion in Gas Nitriding Business

The company's gas nitriding segment is gaining traction, with the third furnace now operational. It generated INR 4.5 crores in H1 FY26, with an expected INR 6.5-7 crores in H2 FY26. Management projects an annual revenue of INR 13 crores from three furnaces, with an EBITDA margin of 14%. However, the installation of three additional furnaces is delayed to June/July 2026 due to customer construction delays, though the company will be ready by March.

Planetary Gear Machines Project Update

The project for planetary gear machines is progressing, with the factory shed nearing completion and machines arriving. The company aims for installation by March 2026 and commercial operations by April/May 2026, though potential delays due to European holidays and approval processes could push this to July. This segment has an annual volume potential of INR 40 crores, with an expected INR 25 crores in revenue for FY27 (partial year), and is expected to yield a 14% EBITDA margin, similar to gas nitriding.

Entry into Defense Sector and Customer Concentration

Thaai Casting has successfully secured vendor approval for the defense sector and anticipates receiving a trial order within a week, marking a strategic entry into a new high-potential market. However, a significant portion of the company's revenue (75-80%) is concentrated among key OEMs like Hyundai, Kia, and Maruti Suzuki, posing a concentration risk. Additionally, a INR 91 crore order was postponed to July 2026 due to customer-side delays, impacting H1 FY26 performance.

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