💰 Financial Performance

Revenue Growth by Segment

In FY25, Auto components contributed 74.50% (INR 37.33 Cr, down 18.1% YoY), Farm Tractor 9.86% (INR 4.94 Cr, down 8.5% YoY), Railways 8.86% (INR 4.44 Cr, up 79.2% YoY), and Others 6.79% (INR 3.40 Cr, up 414.6% YoY). H1 FY26 total revenue reached INR 23.91 Cr, a 3.17% YoY increase from INR 23.17 Cr.

Geographic Revenue Split

FY25 revenue was concentrated in Uttarakhand at 71.65% (INR 35.90 Cr), followed by Haryana at 12.04% (INR 6.02 Cr), Jharkhand at 5.45% (INR 2.74 Cr), Uttar Pradesh at 5.04% (INR 2.53 Cr), and Delhi NCR at 1.78% (INR 0.90 Cr).

Profitability Margins

H1 FY26 PAT margin improved to 15.45% from 11.19% in H1 FY25, a gain of 426.68 BPS. This was driven by a shift toward high-margin railway and defense components and improved manufacturing efficiency.

EBITDA Margin

EBITDA margin for H1 FY26 stood at 22.97%, up 616.29 BPS from 16.81% in H1 FY25. Absolute EBITDA grew 40.99% YoY to INR 5.49 Cr from INR 3.90 Cr due to a better product mix and disciplined execution.

Capital Expenditure

The company is upgrading Unit-02 to increase production capacity to 25,000 MT per annum. Property, Plant & Equipment (PPE) increased from INR 8.41 Cr in FY24 to INR 14.24 Cr in FY25, reflecting ongoing investments in automation and CNC/VMC machinery.

Credit Rating & Borrowing

Finance costs increased to INR 20.45 lakhs in H1 FY26 from INR 3.53 lakhs in H1 FY25. As of FY25, short-term borrowings were INR 3.72 Cr, while long-term borrowings were reduced to zero from INR 0.28 Cr in FY24.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include Ferrous scrap, Cast Iron, Ductile Iron, and Alloy Steel. Cost of materials consumed in H1 FY26 was INR 8.51 Cr, representing 35.6% of total revenue.

Import Sources

Sourced domestically, leveraging India's position as the world's 2nd largest steel producer for supply chain stability and cost-effectiveness.

Capacity Expansion

Current installed capacity is 7,200 MTPA at Unit-1 with 76.20% utilization in FY25. The company is expanding total capacity to 25,000 MTPA through the modernization of Unit-2 to support growth in the EV and Railway sectors.

Raw Material Costs

Material costs decreased as a percentage of revenue from 40.06% in H1 FY25 to 35.60% in H1 FY26, reflecting better procurement strategies and a shift toward higher value-added machined components.

Manufacturing Efficiency

Capacity utilization was 76.20% in FY25 (5,487 MT) compared to 81.74% in FY24. The company is countering this by integrating advanced casting technologies and CNC machining to reduce lead times.

Logistics & Distribution

Strategically located in Kashipur, Uttarakhand, near the Rudrapur auto hub, which minimizes distribution costs and ensures faster delivery to major OEM clients.

📈 Strategic Growth

Expected Growth Rate

10.57%

Growth Strategy

The company plans to achieve growth by expanding capacity to 25,000 MTPA, diversifying into the Defence sector with 81mm artillery shells, and increasing its footprint in the Railway sector using its RDSO Class 'A' Foundry certification. It is also targeting the 'China + 1' global sourcing shift to increase export contracts.

Products & Services

Suspension Brackets, Brake Drums, Gear Box Housings, Pump Bodies, Oil Filters, 81mm artillery shells, and air brake system components for locomotives.

Brand Portfolio

KVS Castings (Foundry Division of KVS Premier Group).

New Products/Services

Development of 81mm artillery shells for defense and assembly parts for the JBM EV division, expected to contribute to higher margin profiles.

Market Expansion

Targeting international markets through the 'China + 1' model and expanding domestic presence in the high-speed rail and EV segments.

Strategic Alliances

Awarded business by M/s Escorts Railway Equipment Division and M/s JBM EV Projects; maintains long-term partnerships with Advik Hi-Tech and Rane TRW Steering.

🌍 External Factors

Industry Trends

The Indian Foundry Market is growing at a 10.57% CAGR, projected to reach USD 42.61 Bn by 2030. Trends include a shift toward lightweight alloys for EVs and modernization of railway rolling stock.

Competitive Landscape

Competes with other ferrous casting foundries in India, but maintains an edge through integrated machining and casting capabilities in a single location.

Competitive Moat

Durable advantages include RDSO Class 'A' Foundry certification (a high entry barrier for railway suppliers) and IATF 16949:2016 certification for automotive quality standards.

Macro Economic Sensitivity

Highly sensitive to Indian GDP growth and infrastructure spending, particularly in Railways and Defence where capital allocation is rising.

Consumer Behavior

Increased demand for EVs and high-speed rail is shifting demand toward precision-engineered, durable die-cast components.

Geopolitical Risks

Beneficiary of 'China + 1' strategy as Western manufacturers diversify sourcing toward Indian foundries.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with IATF 16949:2016, ISO 9001:2015, and RDSO standards for railway component manufacturing.

Environmental Compliance

Focus on 'Green Sand-Casting' as part of the company's vision for sustainable manufacturing.

Taxation Policy Impact

Effective tax rate for H1 FY26 was approximately 24.5% (INR 1.20 Cr tax on INR 4.89 Cr PBT).

⚠️ Risk Analysis

Key Uncertainties

The transition to EVs may render some traditional engine casting components obsolete, requiring rapid R&D into new component types.

Geographic Concentration Risk

High geographic risk with 71.65% of revenue (INR 35.90 Cr) originating from Uttarakhand.

Third Party Dependencies

66.02% revenue dependency on the top 5 customers creates significant counterparty risk if a major OEM partner reduces orders.

Technology Obsolescence Risk

Risk of dependency on manual processes is being mitigated by the installation of HMC, CNC, and VMC machines.

Credit & Counterparty Risk

Trade receivables of INR 11.80 Cr against revenue of INR 50.11 Cr (FY25) suggests a receivable cycle of approximately 86 days.