Simplex Castings Q4 FY26 Earnings Call — Analysis (BSE: 513472)

Simplex Castings guides for FY27 revenue of ₹300 Cr, doubling down on railways after RDSO approval, while Q4FY26 revenue de-grew YoY due to customer-site delays.

6 Jun 2026 · Analysis by Alpha Inflection

The take

FY26 Consolidated Revenue ₹202 Cr ( +~18% YoY ) . New guidance — FY27 fy27 consolidated revenue 300 Cr . New story: Railways as the low-hanging growth driver .

Results

Consolidated FY26 revenue grew ~18% YoY to ₹202 Cr; EBITDA rose 20% to ₹37.39 Cr with margin expansion; PAT jumped 40.5% to ₹21.26 Cr, but Q4FY26 revenue de-grew from ~₹67 Cr in Q4FY25 due to dispatch delays and LPG gas shortages.

Financial highlights

Guidance

FY27 revenue target of ₹300 Cr (₹200 Cr existing business, ₹50 Cr cast bogies, ₹50 Cr power); net profit margins expected at 8-10% minimum; FY28 revenue aspiration of ₹500 Cr.

What management committed to

• We should be getting [an order for cast bogies] in the next month, about a month's time, for 100 to 200 bogies. — 100 to 200 bogie, Q1FY27
• From September onwards, we should be consistently making this 200 bogies, the capacity that we have generated. — 200 bogies per month, Q2FY27
• We are targeting 300 crores in FY27, 200 from the existing business and 50 from the casted railway business... and power sectors also, roughly around 50 crores. — 300 crores, FY27
• Our goal is to be in the same range of 8-10% [PAT margin]. Minimum, minimum. — 8-10%, FY27
• FY28 [revenue] target [is] 500 crores... depending on execution, getting some EPC orders, railways, and acquisitions. — 500 crores, FY28
• [Capex for FY27] originally, it was 25 [crores] and we stick to 25 only. — 25 crores, FY27
• Margins [in ship-building and defence]... is more than 10% [better than steel/railways]. — more than 10%
• We are targeting acquisitions outside India where the PE multiples are sensible, in steel, power, or railways, size ₹20-100 Cr. — 20 crore to 100 crore

Key themes

Railway re-entry and multi-sector capex upcycle

How the narrative shifted

• Railways as the low-hanging growth driver: Re-entering a business Simplex ran for 20-30 years until 2019; cast bogies are a repetitive, design-stable product that locks in 30-40% of production volume, with fabricated bogies as the next leg.
• Execution risk as the binding constraint: Management repeatedly flagged labour shortages, skilling needs, steel price volatility, and gas availability as challenges that could derail scaling to ₹300 Cr and then ₹500 Cr.
• Integrated steel plant capex super-cycle in India: The shift from top-charging to stamp-charging coke-oven batteries, plus the announced doubling of integrated steel capacity, creates a 10-year demand tailwind for coke-oven doors, where Simplex claims 70% market share.
• Power sector orders revival after a lost decade: After being dormant from 2004 to 2019-20, BHEL and L&T have been mandated to build 48 new thermal plants by 2032, revival of a segment where Simplex was historically an award-winning supplier.
• Defence and shipbuilding as margin kickers, not volume drivers: Management explicitly de-emphasised defence/shipbuilding for the next couple of years, calling it a margin-accretive but small segment (15-20% of revenue), preferring to focus execution bandwidth on steel, power, and railways.
• Need for additional funding for fabricated bogies: The second preferential issue was planned at ₹50 Cr but only partially raised; management is evaluating debt or equity to fund the ₹25 Cr capex and ₹25 Cr working capital needed for the fabricated-bogie opportunity.
• International acquisition to bypass rich Indian valuations: After failing to close an Indian railway acquisition due to high multiples, management is actively scouting targets outside India in its core sectors to support the FY28 ₹500 Cr aspiration.

Operational commentary

• RDSO approval received to restart wagon bogie manufacturing; full capacity of 200-250 bogies/month ready, first orders expected within a month, ramp-up from September 2026.
• Developmental order for fabricated bogies (locomotives, metro, Vande Bharat) received; 50% of second preferential issue proceeds allocated to build facilities for fabricated bogies; testing phase upcoming.
• Orders won from Thyssen, SMS, BHEL for steel-plant expansion; one SMS order valued at ₹23 Cr for a single coke-oven battery.
• Coke-oven door segment commanding ~70% market share in India; order potential of 2-3 battery door sets annually from existing integrated steel capacity, plus 2 from new capacity.
• Power segment resurgence: 32 plants ordered on BHEL, 16 on L&T to be commissioned by 2032; ₹35-40 Cr of BHEL orders in current order book.
• Acquisition ambitions: one deal failed due to high Indian multiples; exploring targets outside India in steel/power/railways, size range ₹20-100 Cr.
• EPC focus on metallurgical plant-building as a consortium member; not road/bridge construction.

Analyst Q&A

• Q. What caused the Q4FY26 YoY revenue de-growth versus Q4FY25?

  Contractual manufacturing site activities by the customer delayed dispatches; finished goods inventory liquidated in April-May. Additionally, fabrication plants were hit by LPG gas shortages.

• Q. Are we maintaining the 45-50% CAGR guidance given earlier?

  Yes.

• Q. Why does the presentation mention entry into centrifugally cast rolls, while management said they are not doing it?

  The plan was dropped after a market survey revealed sufficient capacity closer to customers; only Raipur-region DRI plants would remain, and JSPL has its own plant. The investment required was only ₹1.5-2 Cr.

• Q. Will the current balance sheet support the guided growth, or will new fundraising be needed?

  Originally the second preferential issue was planned for ₹50 Cr (₹25 Cr capex, ₹25 Cr working capital) for fabricated bogies. The company may need to raise funds via debt or equity.

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