Summary
Shri Balaji Valve Components Limited - Q3 FY26 Earnings Call Summary Tuesday, January 20, 2026, 01:00 PM IST
Event Participants
Executives 1 Shrinivas Laxmikant Kole (Whole-time Director & CFO)
Analysts Not specified (Questions submitted via chat box from various investors including Madhur Rathi)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations (H1 FY26) | ₹41.35 crores | +12% YoY from ₹36.96 crores; driven by strong domestic demand despite export headwinds. |
| EBITDA (H1 FY26) | ₹7.14 crores | +34% YoY from ₹5.33 crores; margin improvement attributed to better product mix. |
| Profit After Tax (H1 FY26) | ₹3.36 crores | +53% YoY from ₹2.20 crores; supported by operational efficiencies. |
| Order Book | ₹16 crores | Status as of Jan 15, 2026; 90-95% of orders expected to execute within 6-8 weeks. |
| Machining Utilization | 79% | Significant increase from 56% in FY24; 4 new machines added in Dec to ease bottlenecks. |
| Forging Utilization | 50% | Doubled from 25% in FY24; driven by increased in-house consumption of forged blanks. |
| Revenue Mix (Domestic/Export) | 78% / 22% | Shift toward domestic market (was ~70% domestic previously); domestic market picking up well. |
Geographic & Segment Commentary
- Domestic Market: Currently accounts for 78% of revenue. SBVCL serves major hubs including Ahmedabad, Mumbai, Pune, Bangalore, and Chennai, covering maximum MNCs and OEMs in the Indian valve sector.
- International Market: Contributes 22% of revenue with exports to 14 countries including USA, Germany, Italy, and Singapore. Management recently developed a new Middle East customer with a $90,000 trial order, projecting $0.4-$0.5 million in annual revenue from this account.
- Product Segments: Ball valves remain the largest revenue contributor, followed by butterfly, control, and plug valves. The company is currently expanding into flanges and triple offset valve components (bodies and discs).
Company-Specific & Strategic Commentary
- Backward Integration: Management utilizes 95-98% of in-house forging for captive machining, ensuring control over cost, quality, and delivery timelines.
- Engineering & R&D: A dedicated 5-engineer team was established 14 months ago to optimize processes. This team successfully developed 66 product lines for a German MNC, moving production from Europe to India with orders starting Feb 2026.
- Capacity Expansion: The third plant is in final commissioning stages with 4 new CNC/VMC machines added to address specific bottleneck sizes (3" to 24").
- Digitalization: Upgraded ERP systems are being implemented to improve internal reporting and operational reliability.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Potential | ₹130 - ₹140 crores | Target for total capacity post-expansion; expected to be reached within 2 years (FY28). |
| Revenue Growth | 30% - 35% | Aiming to return to pre-IPO growth levels once global trade/tariff situations stabilize. |
| FY26 Revenue | > ₹100 crores | Management expresses confidence in surpassing the ₹100 crore mark in the next fiscal year. |
| Operating Margins | 15% - 17% | Management aims to sustain these levels as a “comfortable” margin profile. |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical & Tariffs | Current international trade uncertainties and tariff issues are impacting the speed of export recovery. |
| Competition | Intense competition from Chinese manufacturers in both small and large valve sizes, leading to occasional loss of orders. |
| Concentration Risk | Top 10 customers generate over 65% of total revenue, creating significant dependency on a limited client base. |
| Pricing Volatility | While raw materials (SS, MS, Nickel alloys) are pass-through, delay in price adjustments can impact short-term margins. |
Q&A Highlights
Growth Bottlenecks & Strategy
- Question: Why has the top-line been stagnant at ₹80-90 crores for three years? (Investor)
- Answer: Growth was constrained by long development timelines for new products and cost competition from unorganized players. We have mitigated this by setting up a dedicated engineering department and adding machines for bottleneck sizes. (Shrinivas Kole)
New MNC Project
- Question: Can you elaborate on the 66 product lines being developed? (Investor)
- Answer: These represent 65/66 distinct lines for a European customer across sizes 3" to 24". The customer is shifting their global supply chain from Europe to India. We expect ~$1.5 million in annual revenue from this specific project as it scales. (Shrinivas Kole)
Capacity & Utilization
- Question: What is the current utilization and how much more can you scale? (Investor)
- Answer: We are at 75-80% utilization in machining. With the 4 new machines and the third plant, our revenue potential is ₹130-140 crores. Total land bank is approximately 3 acres across all facilities. (Shrinivas Kole)
Product Portfolio
- Question: Are there plans for forward integration into valve manufacturing or casting? (Investor)
- Answer: No current plans for making full valves or entering casting. For casting, we use 4-6 strategic foundry partners in Karnataka, Tamil Nadu, and Gujarat to provide full-finished components. (Shrinivas Kole)
Key Takeaway
Shri Balaji Valve Components Limited (SBVCL) demonstrated steady H1 FY26 performance with revenue growing 12% to ₹41.35 crores and PAT surging 53% YoY. The company is undergoing a strategic transition from a small-scale operator to an integrated precision player, highlighted by the shift of a 66-line product project from Europe to their Pune facility. While revenue has historically hovered in the ₹80-90 crore range, management expects to breach the ₹100 crore mark in FY26, supported by a ₹16 crore order book and a new third facility. Strategic focus remains on high-value components for the Oil & Gas and Power sectors, with a notable shift toward the domestic market (78% of mix). Despite competition from China and geopolitical headwinds in exports, SBVCL aims for a ₹130-140 crore revenue peak within two years as it optimizes its 79% utilized machining capacity and doubled forging throughput. Management remains committed to a 15-17% EBITDA margin profile while expanding into flanges and triple offset components.
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