Summary
Paramount Speciality Forgings Limited - Q3 FY26 Earnings Call Summary Friday, January 23, 2026 5:00 PM
Event Participants
Executives 1 Alisagar Roshan Hararwala (Managing Director)
Analysts N/A (The session was a moderated investor connect event; individual analyst names were not specified in the transcript.)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (9M FY26) | ₹88 - ₹90 crores | Cumulative revenue up to December end; driven by existing plant utilization. |
| Order Book | ₹50 - ₹60 crores | Current position with a deliverable timeframe of 3 to 4 months. |
| Capacity | 12,000 MTPA | Expanding to approximately 20,000 MTPA following IPO-funded capex completion. |
| Capacity Utilization | 45% | Management aiming to increase utilization to 55-60% over the next 2-3 months via shift increases. |
| Export-Domestic Mix | 30% / 70% | Primary revenue from domestic markets; no impact from US tariffs as there is zero US export exposure. |
Geographic & Segment Commentary
- Oil & Gas / Petrochemicals: Core segment where the company holds registrations with majors like Reliance Industries, IOCL, and BPCL. Focus remains on high-value, corrosion-resistant products meeting NORSOK (Norwegian) standards.
- Aerospace (New): Successfully completed trials for aluminum forgings for a major forging player. Management expects to secure AS certification and commercialize this segment within 6-12 months.
- Infrastructure & Power: Contributing approximately 6-7% of total revenue. Company is actively seeking new registrations and long-term monthly scheduled contracts in these sectors.
Company-Specific & Strategic Commentary
- Facility Expansion: Commissioning of the new forging plant (including a 10-ton hammer and 2,000-ton press) is expected by March-April 2026. This fills a “gap” in the product range (30kg to 200kg) previously missing from the portfolio.
- In-house R&D and Laboratory: Setting up an NABL-accredited laboratory (commissioning Feb 1st) to reduce dependency on external agencies. This is expected to reduce lead times by up to 25% and lower testing costs.
- Cost Optimization: Commissioning a 1MW captive solar power plant in February 2026 to mitigate high electricity costs and improve operating margins.
- Operational Efficiency: Transitioning from single-shift to multi-shift operations at the Kalapur facility to boost efficiency by 8-10% without additional equipment.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue (FY26) | ₹120 - ₹130 crores | Expected for the full year ending March 2026 based on current order book. |
| Revenue (FY27) | 20% - 25% growth | Management targets significant growth following the shift to commercial production at the new facility in April. |
| EBITDA Margin | 12% - 15% | Targeted for the next fiscal year as solar power and in-house testing reduce fixed/variable costs. |
| Peak Revenue Potential | ₹200 - ₹220 crores | Estimated maximum revenue capacity of the integrated facilities once fully optimized. |
Risks & Constraints
| Risk | Context |
|---|---|
| Margin Compression | Recent OPM has been strained due to expansion-related overheads and high electricity/ancillary manufacturing costs. |
| Certification Timelines | Entry into Aerospace and Nuclear sectors depends on long-lead registration processes (6-12 months), which may delay commercial scaling. |
| Working Capital | High lead times (20-25% attributed to testing alone) impact inventory turnover; management is currently “eliminating” slow-paying customers to optimize cycles. |
Q&A Highlights
Expansion Rationale & Capacity
- Question: Why add a new plant when existing utilization is only 45%?
- Answer: Existing plants had an equipment gap for the 30kg-200kg range; the new 10-ton hammer allows the company to compete in high-volume segments and fill this manufacturing void (Alisagar Hararwala).
Aluminum Forgings & Aerospace
- Question: What are the plans for aluminum forging and key customers?
- Answer: Trials are successful and certified. The company is pursuing AS certification post-May/June to target aerospace specifically, utilizing the new 2,000-ton press (Alisagar Hararwala).
Operating Margins
- Question: Can you elaborate on the fall in OPM over the last year?
- Answer: Strained by project expansion costs and electricity expenses. Mitigation includes the 1MW solar plant and the in-house lab to reduce external testing fees (Alisagar Hararwala).
Revenue Mix & Concentration
- Question: Can you give a segment-wise breakup and top customer contribution?
- Answer: Reliance and EIL (for PSU projects) are top clients. Infrastructure contributes 7%. Specific data will be uploaded to NSE, but the company is shifting away from low-margin clients (Alisagar Hararwala).
Key Takeaway
Paramount Speciality Forgings is transitioning from a 12,000 MTPA player to a 20,000 MTPA integrated manufacturer, aiming for a revenue of ₹120-130 crores in FY26. The quarter was characterized by heavy capex execution, with the commissioning of a 10-ton forging hammer and a 1MW solar plant slated for Q4 FY26. Strategically, the company is moving up the value chain into aluminum forgings for aerospace and high-grade steels (NORSOK standards) to improve EBITDA margins toward the 12-15% range. While utilization is currently low at 45%, management expects a 20-25% CAGR over the next two years as the new facility fills critical production gaps and in-house testing reduces lead times by 25%. Investors should monitor the successful commercialization of the new plant in April 2026 and the reduction in receivable cycles as key performance indicators.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: