Bhagwati Auto - Bhagwati Auto

📊 BSE: 504646 🏢 Auto Components & Equipments 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations increased by 4.2% to INR 140 Cr in FY2025 from INR 134 Cr in FY2024. This followed a 13% decline in FY2024 from INR 154 Cr in FY2023 due to weak monsoon impacts on tractor demand. Q1 FY2026 revenue reached INR 40 Cr, representing a 17% YoY growth.

Geographic Revenue Split

The company operates primarily from its manufacturing unit in Bavla, Ahmedabad district, Gujarat. Specific domestic vs. international revenue splits are not disclosed, though the client base consists of major Indian tractor OEMs.

Profitability Margins

Net Profit Margin stood at 4.59% in FY2025, a decline from 5.30% in FY2024. Gross margins improved to 37.8% in FY2025 from 37.2% in FY2024, but higher operating expenses (28.8% of sales) pressured the bottom line.

EBITDA Margin

EBITDA margin was 8.9% in FY2025, down from 9.6% in FY2024. The decline was driven by reduced operating leverage and increased costs for power, fuel, and employees. However, Q1 FY2026 margins improved significantly to 12.5% compared to 10% in Q1 FY2025.

Capital Expenditure

The company implemented a debt-funded capital expenditure of INR 14-15 Cr for a solar power plant. This investment is expected to generate savings of INR 7 Cr in FY2026, up from INR 5 Cr in FY2025, directly improving operating margins.

Credit Rating & Borrowing

CRISIL reaffirmed the long-term rating at 'CRISIL BBB/Stable' and the short-term rating at 'CRISIL A3+'. Bank loan facilities total INR 26.5 Cr. Interest coverage stood at 11.1 times in FY2025, down from 12.9 times in FY2024.

⚙️ Operational Drivers

Raw Materials

Key raw materials include scrap and pig iron. While specific percentage of total cost for each is not disclosed, gross margins of 37.8% suggest raw material costs represent approximately 62.2% of revenue.

Import Sources

Not disclosed in available documents; however, the company operates in the Ahmedabad industrial cluster, sourcing materials for its 18,000 TPA casting capacity.

Capacity Expansion

Current installed capacity is 18,000 tonnes per annum (TPA) at the Bavla plant. Sales volume reached 14,500 MT in FY2025 (up from 13,944 MT in FY2024). Expansion is supported by a new solar plant to optimize power costs.

Raw Material Costs

Raw material costs are volatile but the company employs a pass-through mechanism with a 30-60 day lag to mitigate price fluctuations in scrap and pig iron.

Manufacturing Efficiency

Capacity utilization was approximately 80.5% in FY2025 based on 14,500 MT sales against 18,000 TPA capacity. Efficiency is expected to improve with higher volumes in FY2026 (targeted 11-12% growth).

📈 Strategic Growth

Expected Growth Rate

11-12%

Growth Strategy

Growth will be driven by a pick-up in demand from the tractor industry and steady offtake from key customers like Swaraj Engines and Escorts Kubota. The company expects 5-7% growth in the medium term, supported by capacity utilization and cost benefits from the new solar power plant.

Products & Services

Casting components for tractors, specifically gearbox housings, axle housings, and exhaust castings.

Brand Portfolio

Bhagwati Autocast Limited (BAL).

Market Expansion

The company is focusing on increasing order inflows from existing Tier-1 tractor OEM customers to fill its 18,000 TPA capacity.

Strategic Alliances

Key relationships include Swaraj Engines Ltd (Mahindra group), Escorts Kubota Limited, Mahindra & Mahindra Ltd, and Mita India Pvt Ltd.

🌍 External Factors

Industry Trends

The tractor industry is currently seeing a pick-up in demand. The industry is evolving toward higher efficiency and cost optimization, which the company is addressing through its solar energy investments.

Competitive Landscape

Operates in a competitive metal castings industry with intense competition from other foundries serving the automotive and agricultural sectors.

Competitive Moat

The moat is built on a four-decade track record (since 1984) and established long-term relationships with major tractor OEMs, which are difficult for new entrants to replicate due to stringent quality requirements for large castings.

Macro Economic Sensitivity

Highly sensitive to agricultural GDP and monsoon performance, as these factors dictate the demand for tractors and related casting components.

Consumer Behavior

Farmer sentiment and purchasing power, driven by crop yields and government agricultural policies, are the primary drivers of end-user demand.

Geopolitical Risks

Indirect risks through global commodity price volatility affecting scrap and pig iron costs.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company adheres to quality standards required for automotive casting manufacturing.

Environmental Compliance

The company has invested INR 14-15 Cr in a solar power plant, aligning with green energy initiatives and reducing carbon footprint.

Legal Contingencies

The company reported no fraudulent transactions or violations of the Code of Conduct. There are no reported material pending litigations in the provided snippets.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of the Indian monsoon, which can cause double-digit fluctuations in annual revenue (as seen in the 13% drop in FY2024).