Kalyani Forge reported strong financial growth for H1 FY27, with PAT rising 86.7% YoY to Rs 6.64 crore. Despite a sequential revenue dip due to planned factory-floor transformations, the company saw EBITDA margins expand to 15.3%. Growth was primarily driven by a 75% surge in the truck segment, which now accounts for 43% of total sales. Management is focused on executing a Rs 30 crore capex plan to support higher capacity utilization.
Kalyani Forge H1 FY27 Profits Soar 87%
H1 FY27 PAT stands at Rs 6.64 crore; Trucks segment revenue grows 75% YoY.
Reader Takeaway: Strong margin expansion and trucking demand offset operational disruptions, with H2 volume recovery being the key catalyst.
What just happened
Kalyani Forge has delivered a robust financial performance for the first half of FY27. Profit After Tax (PAT) grew by 86.7% year-on-year to Rs 6.64 crore, while Profit Before Tax (PBT) climbed 118.8% to Rs 9.39 crore. EBITDA margins showed significant improvement, reaching 15.3% compared to 11.1% in the same period last year. This performance was achieved even as the company navigated planned operational downtime.
Why this matters
The company is successfully executing its strategy to pivot toward high-growth, higher-margin sectors. Cars, trucks, and industrial segments now account for 97% of total sales, a substantial increase from 82% a year ago. The truck segment remains a standout performer, growing 75% annually. The transition to a high-value product mix is now reflecting in the company's bottom line despite a sequential revenue contraction of 18.5% in Q2, which resulted from factory reconditioning and machine relocation.
Operational and Capex Update
Management has committed to a Rs 30 crore capex plan for FY27, with Rs 8 crore already deployed in H1. The investment is aimed at de-bottlenecking operations and ramping up capacity for high-utilization programs (85-90%). Key enhancements include a 10% capacity expansion in Conrod machining and a new wheel hub line with significant potential upside. These operational shifts are expected to normalize volumes in the second half of the year.
Risks to watch
Investors should note an uptick in receivables, linked to banking system transitions and delays in legacy product lifting. While management expects these to normalize, collection efficiency remains a metric to watch. Additionally, the company's revenue sensitivity to internal factory transformations highlights the necessity for smooth execution of future ramp-ups.
What to track next
Watch for the recovery of volume growth in H2, the continued normalization of cash collections following banking changes, and the successful scaling of the new wheel hub production line.