KALYANI - Kalyani Cast-Tech Limited Share Price

Management's outlook for Kalyani Cast Tech Limited remains positive, supported by robust growth and strategic expansion initiatives. The company expects revenue to increase between 30% to 40% for FY26, building on a successful FY25 where revenue rose by 47% to approximately INR 140 crore. Profitability metrics are also strong, with PAT increasing by 48% and EBITDA by 44%. The current order book stands at INR 110 crore, with an expectation to fulfill this by October 2025.

The management highlighted an aggressive expansion plan, acquiring 144 acres of land near a port, which will host various facilities, including an Gati Shakti Cargo Terminal, wagon manufacturing with an initial annual capacity of 2,400 units, and enhanced container manufacturing capabilities of 10,000 units annually. The capex required for this expansion is estimated between INR 400 crores to INR 500 crores over the next 4-5 years, with financial strategies including internal funds, equity raises, and potentially debt financing.

Noteworthy achievements include the company's recognition as MSME of the Year in 2024 by Economic Times and significant contributions to reducing foreign exchange outflows by INR 360 crores through localized container production. The management emphasized their ambitious goal to become the largest wagon manufacturer in India and a key player in reducing logistical costs.

In summary, management remains confident about meeting their growth objectives through strategic investments and a commitment to innovation in container and logistics solutions. Key growth metrics such as margins are targeted to remain between 9% to 12%.

Major Questions and Answers from Kalyani Cast Tech Limited's FY25 Earnings Conference Call

Q1: "Could you share your plans regarding the team building, particularly in terms of leadership hires and the technical talent?"

A1: As an ex-railway officer, I have connections in railway manufacturing. We have already hired experts and will continue to recruit as needed to keep overhead costs low, ensuring we remain competitive.

Q2: "What can be the order expectations given the competition and current slowdown in railway orders?"

A2: I assure you, we will not face any challenges in securing orders. We will focus on private sector orders as well, especially from container train operators located mainly in the northern and western parts of India.

Q3: "What kind of growth should we expect for FY '26 in terms of revenue?"

A3: We expect revenue growth between 30% to 40% this fiscal year, acknowledging that absolute numbers will increase but percentage growth might not match last year's highs due to scaling.

Q4: "What is the targeted net margin for FY '26?"

A4: We anticipate net margins to fall between 9% and 12%, maintaining profitability while managing cost pressures.

Q5: "What is the execution period for the current INR110 crore order book?"

A5: We expect to complete the order book by October this year, similar to previous timelines.

Q6: "What is the total estimated capital expenditure for the next 4-5 years?"

A6: Our total capex is estimated between INR400 crores and INR500 crores, and we will strategically raise funds through internal generation, equity, and possibly joint ventures.

Q7: "When do you expect the wagon manufacturing facility to be operational?"

A7: The wagon manufacturing facility should be operational in 8-9 months, with total output ramping up over time based on demand.

Q8: "How do you plan to differentiate your wagons and what will be your competitive advantage?"

A8: We are introducing value-added features that will provide significant advantages over standard offerings. Our ability to offer comprehensive logistical solutions at a single facility will be key.

Q9: "What is the current financial capability for your expansion plans?"

A9: We are exploring various funding options, potentially involving debt and joint ventures, to finance the expansion while ensuring we maintain our operational integrity.

Q10: "What revenue potential do you expect from the capex of INR400 crores to INR500 crores and the payback period?"

A10: We project a potential revenue of around INR4,000 crores from this investment. However, the precise payback period is still to be determined as we finalize project specifics.

This structured Q&A captures the essential inquiries and responses during the conference, focused on the company's operational contexts and forward strategies.