💰 Financial Performance

Revenue Growth by Segment

The company operates in a single business segment: manufacturing of closed die forged products. Revenue from operations for the half-year ended September 30, 2025, was INR 16.01 Cr, representing a 20.01% decline compared to INR 20.02 Cr in the same period of the previous year. Quarter-on-quarter, revenue grew 6.75% from INR 7.75 Cr in Q1 FY26 to INR 8.27 Cr in Q2 FY26.

Geographic Revenue Split

Not disclosed in available documents, though the company reported foreign exchange earnings of INR 1.25 Cr for FY 2024-25, which is a 39.04% decrease from INR 2.05 Cr in FY 2023-24, indicating a shrinking export contribution.

Profitability Margins

Profitability has significantly deteriorated. Net Profit Margin for Q2 FY26 was -35.56%, compared to 2.40% in Q2 FY25. Operating margin for Q2 FY26 stood at -28.38%, a sharp decline from 5.07% in the same quarter of the previous year, primarily due to high raw material costs relative to revenue.

EBITDA Margin

Operating margin (EBITDA proxy) was -28.38% in Q2 FY26. This is a significant drop from the 7.15% margin reported for the full year ended March 31, 2025, indicating severe pressure on core profitability in the current fiscal year.

Capital Expenditure

Historical capital expenditure for the half-year ended September 30, 2025, included the purchase of tangible and intangible assets worth INR 0.79 Cr. Capital work-in-progress increased from INR 0.39 Cr in March 2025 to INR 0.72 Cr in September 2025, a 84.6% increase.

Credit Rating & Borrowing

The company's Debt-Equity ratio was 0.58 as of September 30, 2025. Total borrowings stood at INR 16.99 Cr (INR 7.41 Cr non-current and INR 9.58 Cr current). Specific credit ratings and interest rate percentages were not disclosed.

⚙️ Operational Drivers

Raw Materials

Steel and metal alloys for closed die forging represent the primary raw materials. Cost of materials consumed in Q2 FY26 was INR 7.15 Cr, which accounts for 86.5% of the total revenue from operations.

Key Suppliers

The company engages in transactions with Prem Trading & Co. for the purchase of materials, as disclosed in related party transactions.

Capacity Expansion

Current installed capacity is not specified in MT. However, the company reported Property, Plant, and Equipment (PPE) of INR 17.54 Cr as of September 30, 2025, with a slight decrease from INR 17.67 Cr in March 2025 due to depreciation.

Raw Material Costs

Raw material costs are the dominant expense, totaling INR 13.98 Cr for H1 FY26 (87.3% of revenue). This is a high concentration, making the company extremely vulnerable to fluctuations in steel prices.

Manufacturing Efficiency

Manufacturing efficiency appears to be declining as the operating margin turned negative (-28.38%) in Q2 FY26 despite a slight increase in revenue compared to the preceding quarter.

📈 Strategic Growth

Expected Growth Rate

Not disclosed%

Growth Strategy

The company focuses on manufacturing 'all kinds of close die forging' products. Strategy involves maintaining ISO 9001-2015 and IATF certifications to ensure quality for automotive and industrial clients. They are also utilizing information technology to promote paperless operations and efficiency.

Products & Services

Closed die forged products used in various industrial and automotive applications.

Brand Portfolio

Ganga Forge

Market Expansion

The company is targeting growth through its existing manufacturing facility in Rajkot, Gujarat, but specific regional expansion timelines are not provided.

🌍 External Factors

Industry Trends

The forging industry is shifting toward higher precision and IATF-certified quality standards. Ganga Forge is positioned with these certifications, but current financial results show the industry is facing margin pressure from high input costs.

Competitive Landscape

The industry is fragmented with several players in the Rajkot forging cluster, leading to intense price competition.

Competitive Moat

The company's moat is based on its specialized manufacturing capability for closed die forging and its IATF certification. However, this moat is currently weak as evidenced by negative profitability and high raw material cost sensitivity.

Macro Economic Sensitivity

Highly sensitive to industrial production cycles and automotive demand in India, as these sectors are the primary consumers of forged products.

Consumer Behavior

Not applicable as the company is a B2B industrial manufacturer.

⚖️ Regulatory & Governance

Industry Regulations

The company must comply with IATF 16949 standards for automotive components and ISO 9001-2015 for quality management.

Taxation Policy Impact

The company reported a deferred tax liability of INR 1.80 Cr as of September 30, 2025.

Legal Contingencies

The Secretarial Audit Report for FY 2024-25 did not report any major non-compliances or pending litigations with significant financial impact, though it noted the company is not required to spend on CSR as it does not meet the Section 135 criteria.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of raw material prices, which constitute over 86% of revenue. A 5% increase in steel prices without a corresponding price hike to customers could increase losses by approximately INR 0.35 Cr per quarter.

Geographic Concentration Risk

Manufacturing is concentrated in a single location at Sadak Pipaliya, Rajkot, Gujarat.

Third Party Dependencies

High dependency on Prem Trading & Co. for material procurement and job work.

Technology Obsolescence Risk

The company is upgrading its IT systems to stay current, but the core forging technology requires continuous maintenance of PPE (INR 17.54 Cr).

Credit & Counterparty Risk

Trade receivables stood at INR 6.56 Cr as of September 30, 2025. The debtors turnover ratio of 1.26 (quarterly) suggests a collection period of approximately 71 days.