💰 Financial Performance

Revenue Growth by Segment

Revenue grew 36.2% YoY to INR 145.56 Cr in FY25 from INR 106.86 Cr in FY24. H1 FY26 revenue reached INR 104.13 Cr, a 30% increase compared to H1 FY25 (INR 80.03 Cr). The 3-year CAGR stands at 46%, driven by the defence and energy segments.

Geographic Revenue Split

Primarily India-based operations with a 6,000 square meter facility in Khopoli, Maharashtra. The company maintains global technical tie-ups with French entities M/s Nereides and M/s Minerva Issartel to support its domestic naval contracts.

Profitability Margins

Net Profit margin improved to 16.39% in FY25 from 15.09% in FY24. Reported PAT for FY25 was INR 23.85 Cr, up 47.9% from INR 16.12 Cr in FY24. Operating margins have improved due to a better product mix and single-source vendor status for critical spares.

EBITDA Margin

H1 FY26 EBITDA was INR 27.40 Cr, representing a 27.40% YoY growth compared to H1 FY25. The EBITDA margin for H1 FY26 is approximately 26.3%, reflecting strong core profitability from high-value naval equipment.

Capital Expenditure

Total assets increased to INR 199.03 Cr in FY25 from INR 161.16 Cr in FY24. The company completed a Follow-on Public Offer (FPO) of INR 87.75 Cr in July 2025 to strengthen its capital structure and support growth.

Credit Rating & Borrowing

Credit rating was upgraded to CRISIL BBB+/Stable/CRISIL A2 in September 2025 from CRISIL BBB/Positive/CRISIL A3+. Interest coverage ratio improved significantly to 18.08x in FY25 from 12.59x in FY24.

⚙️ Operational Drivers

Raw Materials

Critical components and specialized alloys for naval shipboard machinery represent the primary material costs. Cost of material consumed was INR 44.72 Cr in FY25, accounting for 30.7% of total revenue.

Import Sources

Sourced from domestic suppliers and international partners, specifically France through technical tie-ups with Minerva Issartel and Nereides for specialized naval technology.

Key Suppliers

Not explicitly named, but includes global technical partners M/s Nereides and M/s Minerva Issartel of France for critical submarine and surface ship components.

Capacity Expansion

Current facility at Khopoli, Maharashtra, is spread over 6,000 square meters. Planned expansion is supported by the INR 87.75 Cr FPO proceeds to meet the requirements of a healthy INR 537 Cr order book.

Raw Material Costs

Raw material costs decreased as a percentage of revenue to 30.7% (INR 44.72 Cr) in FY25 from 84% (INR 89.84 Cr) in FY24, indicating a shift toward higher value-added services and better product mix.

Manufacturing Efficiency

Workforce of over 250 professionals. Efficiency is reflected in the 46% 3-year revenue CAGR and the ability to service the full lifecycle of Indian Navy ships and submarines.

📈 Strategic Growth

Expected Growth Rate

46%

Growth Strategy

Growth will be achieved through the execution of the INR 537 Cr order book (as of July 2025), leveraging single-source vendor status for Indian Navy spares, and expanding into sonar, stealth, and weapon systems under the Atma Nirbhar Bharat initiative.

Products & Services

Shipboard machinery, sonar systems, stealth systems, integrated platform management systems (IPMS), weapon systems, and critical equipment for nuclear and clean energy sectors.

Brand Portfolio

CFF, CFF Defensys.

New Products/Services

Recent expansion into sonar systems and stealth systems for the P75 Project, with a recent order from the Indian Navy totaling INR 5.31 Cr in December 2025.

Market Expansion

Expanding footprint in the nuclear and clean energy sectors by designing and manufacturing mechanical equipment and systems for these specialized industries.

Strategic Alliances

Technical tie-ups with M/s Nereides and M/s Minerva Issartel of France to enhance technological depth and manufacturing standards for naval applications.

🌍 External Factors

Industry Trends

The industry is shifting toward 100% indigenization of naval components. CFF is positioned as a key beneficiary due to its established relationships with major domestic shipyards and the Indian Navy.

Competitive Landscape

Operates in a niche segment with high barriers; key competitors include other specialized defence SMEs and public sector shipyards like Mazagon Dock.

Competitive Moat

Moat is built on 30+ years of promoter experience, single-source vendor status for critical spares, and specialized technical tie-ups. This is sustainable due to the high entry barriers in defence manufacturing.

Macro Economic Sensitivity

Highly sensitive to India's defence budget and indigenization policies (Atma Nirbhar Bharat), which directly dictate the volume of tender-based opportunities.

Consumer Behavior

The primary 'consumer' (Indian Navy) is shifting demand toward integrated platform management and advanced stealth technologies.

Geopolitical Risks

Geopolitical shifts affecting technology transfer from France or changes in international defence cooperation could impact the technical know-how pipeline.

⚖️ Regulatory & Governance

Industry Regulations

Subject to stringent global defence standards and Indian Navy manufacturing certifications. Operations must align with Section 197 of the Companies Act for managerial remuneration.

Taxation Policy Impact

Effective tax rate for FY25 was approximately 27.6%, with a tax provision of INR 9.09 Cr on a PBT of INR 32.94 Cr.

Legal Contingencies

No material tampering with audit trails reported; managerial remuneration is in accordance with requisite approvals. No specific pending court case values disclosed.

⚠️ Risk Analysis

Key Uncertainties

Tender-based business model leads to potential volatility in scale and profitability. Revenue could fluctuate by over 20% depending on the timing of contract awards.

Geographic Concentration Risk

100% of manufacturing is concentrated in Khopoli, Maharashtra, making operations vulnerable to regional disruptions.

Third Party Dependencies

Significant dependency on French partners (Nereides and Minerva Issartel) for technical know-how and specialized component designs.

Technology Obsolescence Risk

High risk due to the rapid evolution of naval warfare technology; requires constant upgrades to sonar and stealth capabilities.

Credit & Counterparty Risk

Credit exposure is primarily to government entities (Indian Navy), which ensures high receivables quality but contributes to a stretched GCA of 402 days.