Summary
Simplex Castings Limited - Q3 FY26 Earnings Call Summary Tuesday, February 10, 2026
Event Participants
Executives 2 Avinash Hariharno (CFO), Ketan Shah (Chairman & Executive Director)
Analysts 5 Bhavin Dedhia, Charchit Maloo, Dhaval P, Khozem Jabalpurwala, Praneeth Bommisetti
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (9M FY26) | ₹150 crores | Driven by strong demand in steel, railway, and EPC sectors. |
| PAT (9M FY26) | ₹15 crores | Trailing year-to-date performance; Q3 PAT margins maintained at ~10%. |
| EBITDA Margin | ~15% (Guided) | Q3 margins were slightly soft due to product mix; management expects return to 15% in Q4. |
| Order Book | ₹100+ crores | Healthy visibility with recent high-value wins from ThyssenKrupp (₹13 crores) and BHEL. |
| Fundraise | ₹50.15 crores | Successful completion via preferential issue; 50% for Capex, 50% for Working Capital. |
| Debt / CC Limits | ₹34 crores | Working capital limit from Kotak Mahindra Bank; currently focusing on deleveraging. |
Geographic & Segment Commentary
- Steel Sector: Remains the largest contributor at 50% of the order book; management is benefiting from PSU capex cycles and recently secured a ₹13 crore order via ThyssenKrupp.
- Railways: Strategic focus area expected to grow from near-zero to 20-25% of revenue by FY27; focus remains on casted freight bogies (awaiting RDSO signature) and fabricated bogies.
- Power & EPC: Contributing 30% of the order book; intense demand from BHEL, L&T, and Adani (16 plants) and NTPC (22 plants) provides a 6-year growth runway.
- Defense & Shipbuilding: Accounts for ~10-15% of the mix; includes high-margin orders from Mazgaon Dock for naval vessels and machining for the Dhanush project.
Company-Specific & Strategic Commentary
- Simplex 2.0 Strategy: Shifting from pure jobbing/foundry work to a “solution provider” model by moving up the value chain with fully machined castings and sub-assemblies.
- Railway Re-entry: Utilizing ₹25 crore capex to scale fabricated/casted bogies; this segment offers shorter working capital cycles (15-45 days) compared to traditional steel orders.
- Operational Efficiency: Enrollment on TREDs platforms (InvoiceMart, RXIL) to improve cash flow conversion and reduce the cost of funds without adding leverage.
- Technological Leadership: Maintaining status as the world’s largest manufacturer of “Zero Emission Air-cooled” Coke Oven doors via long-standing Japanese technical collaboration.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue | 40-50% CAGR | Over next 3 years, driven by the restart of the railway product line and power sector boom. |
| Revenue (FY26) | ₹200+ crores | Management remains “intact” on achieving previously stated annual guidance. |
| Asset Turnover | 3x - 4x | Expected productivity from the new ₹25 crore capex investment in fabrication/bogey lines. |
| Working Capital | 90 Days (Blended) | Target to reduce cycles for new repetitive product lines (Power/Rail) to 30-45 days. |
Risks & Constraints
| Risk | Context |
|---|---|
| Execution Risk | Rapid scaling to 50% CAGR requires significant management and financial bandwidth; management is cautious about “chewing only what they can.” |
| Regulatory Approvals | Casted freight bogie production is contingent on final RDSO signatures; any delay impacts FY27 volume projections. |
| Working Capital | Historical banking challenges in 2019 led to the hiving off of a unit; management is mitigating this by avoiding high bank reliance and using equity/TREDs. |
| Geopolitical Risk | Export recovery in the steel segment (specifically Russia/Ukraine) is entirely dependent on the cessation of regional conflicts. |
Q&A Highlights
Steel Capex & Orders
- Question: When will steel industry capex translate into orders? (Bhavin Dedhia)
- Answer: The process has started; we secured a ₹13 crore order through ThyssenKrupp this month. We expect sizable business in FY26-27 as OEMs finish design phases (Ketan Shah).
Railway Business Restructuring
- Question: Why was the railway unit hived off in 2018-19? (Praneeth Bommisetti)
- Answer: It was due to banking challenges where sanctioned limits weren’t disbursed despite a ₹300 crore order book. We are now restarting this line in our existing units using internal funds/equity to avoid bank reliance (Avinash Hariharno/Ketan Shah).
Working Capital Improvement
- Question: How will the new product mix affect liquidity? (Praneeth Bommisetti)
- Answer: Strategic shift to repetitive products like railway bogies and power equipment reduces the cycle. Railways pay within 15 days of receipt, significantly better than the steel industry’s 45+ days (Ketan Shah).
Capacity Expansion
- Question: What is the timeline for the new fabrication capacity? (Praneeth Bommisetti)
- Answer: Casted bogie capacity is already in place; fabricated bogie expansion will take 6-8 months (Ketan Shah).
Key Takeaway
Simplex Castings Limited reported a stable 9M FY26 performance with a ₹150 crore topline and ₹15 crore PAT, maintaining its trajectory toward a ₹200+ crore FY26 target. The company is undergoing a structural transformation labeled “Simplex 2.0,” shifting from a traditional foundry to a high-value engineering solution provider. This transition is supported by a ₹50.15 crore fundraise, half of which is dedicated to scaling the railway bogie segment—a business that previously generated ₹130+ crores but was hived off in 2019 due to liquidity constraints. Management is aggressively targeting the domestic thermal power boom (BHEL/NTPC orders) and steel capex, while diversifying into high-margin defense and shipbuilding (10-15% of mix). With a guided 40-50% CAGR over the next three years and a focus on reducing working capital cycles to 90 days, the company remains focused on execution stability. Key watch points include the timing of RDSO approvals for railway bogies and the successful deployment of new fabrication capacity within the next 8 months.
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