💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) of INR 228.50 Cr for FY24, primarily derived from carbide and high-speed steel (HSS) round cutting tools for automotive and engineering industries.

Geographic Revenue Split

The company serves sectors including aerospace, defense, oil and gas, and infrastructure development both in India and internationally, though specific percentage splits are not disclosed.

Profitability Margins

The company reported a healthy net profitability margin of 12.94% for FY24 (period from April 1, 2023, to March 31, 2024).

EBITDA Margin

EBIDTA margin stood at 22.48% for FY24, reflecting strong core operational profitability.

Capital Expenditure

The company has plans for debt-funded capital expenditure for FY25 to enhance production capacity, supported by bank facilities totaling INR 55.00 Cr.

Credit Rating & Borrowing

Infomerics Ratings assigned IVR BBB/Stable for long-term bank facilities (INR 45.00 Cr) and IVR A3+ for short-term facilities (INR 10.00 Cr) as of December 2024.

⚙️ Operational Drivers

Raw Materials

Carbide and High-Speed Steel (HSS) are the primary raw materials used for manufacturing round cutting tools.

Capacity Expansion

Ongoing production capacity enhancement is in progress for FY25 to meet growing demand in aerospace and defense sectors.

Raw Material Costs

Profitability is susceptible to volatile raw material prices, which is identified as a key rating constraint.

Manufacturing Efficiency

Coverage ratios are strong with an interest coverage of 44.28x and DSCR of 36.47x, indicating high operational efficiency relative to debt obligations.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Growth is targeted through value-added segments, application-based tooling solutions, and capacity expansion to serve high-demand sectors like aerospace, defense, and infrastructure.

Products & Services

Carbide and high-speed steel (HSS) round cutting tools used in automotive, engineering, aerospace, and defense applications.

Brand Portfolio

Forbes (Engineering business established in 1767).

New Products/Services

Focusing on value-added segments offering standard and application-based tooling solutions.

Market Expansion

Targeting accelerated growth in aerospace, defense, oil and gas, and infrastructure development sectors.

Market Share & Ranking

The precision tools industry is noted as highly fragmented with significant competition.

Strategic Alliances

The company is part of the Shapoorji Pallonji Group (since 2002), leaders in infrastructure and construction.

🌍 External Factors

Industry Trends

The precision tools industry is evolving with increased demand for application-based tooling in specialized sectors like aerospace and defense.

Competitive Landscape

Highly fragmented industry with numerous players competing for market share.

Competitive Moat

Durable advantages include a strong brand recall (Forbes brand since 1767) and backing from the Shapoorji Pallonji Group.

Macro Economic Sensitivity

Demand is sensitive to growth in the aerospace, defense, and infrastructure sectors.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Legal Contingencies

The company has disclosed the impact of pending litigations as of March 31, 2025, in Note 34(a) of its Standalone Financial Statements.

⚠️ Risk Analysis

Key Uncertainties

Stabilization risk associated with ongoing production capacity enhancement and potential impact of debt-funded capex on the financial profile.

Technology Obsolescence Risk

The company must consistently innovate and uphold high-quality standards to stay competitive in the fragmented precision tools sector.

Credit & Counterparty Risk

Auditors circularized balance confirmations to a selected sample of customers to evaluate receivables quality.