HILTON - Hilton Met.Forg.

📊 NSE: HILTON 🏢 Castings & Forgings 📅 Last Updated: 12/13/2025 22:55

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment: Manufacturing of Steel Forgings. Total revenue grew by 20.25% YoY, reaching INR 168.22 Cr in FY25 compared to INR 139.88 Cr in FY24. This growth was primarily driven by increased domestic demand for railway and automotive components.

Geographic Revenue Split

Not explicitly disclosed by percentage, but the company exports to the USA, Europe, Mexico, Canada, and Australia, while noting that recent growth in FY25 was driven by demand within India.

Profitability Margins

Profitability margins have seen a downward trend. Net Profit Margin (NPM) declined from 4.78% in FY24 to 3.67% in FY25. This compression is attributed to higher material and employee overheads which outpaced revenue growth.

EBITDA Margin

Operating Profit Margin (PBILDT) deteriorated from 11.83% in FY24 to 9.14% in FY25. The absolute PBILDT fell by 7.08% from INR 16.54 Cr to INR 15.37 Cr despite the increase in total revenue.

Capital Expenditure

Not disclosed in absolute INR Cr for future periods, though the company is focusing on a Rights Issue to raise capital for operational and debt requirements.

Credit Rating & Borrowing

The company's credit rating was downgraded to 'CARE D; ISSUER NOT COOPERATING' in September 2025, indicating a state of default. Previously, it was rated CARE C (Stable) in July 2024. Borrowing costs are impacted by a Debt Service Coverage Ratio (DSCR) which weakened from 1.99x to 1.85x YoY.

⚙️ Operational Drivers

Raw Materials

Stainless-steel, Nickel Alloy, and Iron & Steel products. Specific percentage of total cost per material is not disclosed, but total operating expenses and provisions rose 23.92% to INR 152.85 Cr in FY25.

Import Sources

Not specifically disclosed, though the company notes the replacement market for railway wheels is heavily dependent on imports.

Capacity Expansion

Current installed capacity is 14,400 MTPA at the Wada, Thane facility. No specific planned expansion figures in MTPA were provided, though the company is targeting a 20% improvement in per-employee productivity.

Raw Material Costs

Raw material costs are a significant portion of the INR 152.85 Cr operating expenses. The company aims to reduce raw material consumption by 10% to 15% through better material utilization to offset rising input prices.

Manufacturing Efficiency

The company is targeting average forging facility up-times at maximum and a 30% reduction in per-piece labor costs to improve overall manufacturing competitiveness.

Logistics & Distribution

Not disclosed as a specific percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

17.79%

Growth Strategy

The company plans to achieve growth by penetrating the railway replacement market, where it claims a clear edge over imports. It has developed 5 types of Forged Wagon Wheels and Railway Wheel Set Assemblies for Indian Railways. Additionally, the company is pursuing a Rights Issue to strengthen its balance sheet and fund these new product lines.

Products & Services

Stainless-steel forged flanges, allied pipe fitting items, Butt Weld Fittings, Railway Wheels, Gear Blanks, Forged Crankshafts, Annealed Nickel Alloy rings, and Valve Body bonnets.

Brand Portfolio

Hilton Metal Forging Limited (HMFL).

New Products/Services

Forged Wagon Wheels and Railway Wheel Set Assemblies. These are expected to contribute significantly as they pass field trials with Indian Railways.

Market Expansion

Targeting the domestic Indian railway sector and private wagon manufacturers to reduce reliance on the fragmented and competitive international forging market.

Market Share & Ranking

Not disclosed.

Strategic Alliances

Technical compatibility tests for railway products are conducted in coordination with RITES and Indian Railways.

🌍 External Factors

Industry Trends

The forging industry is evolving toward higher precision and specialized components like railway wheels. HMFL is positioning itself to move away from commodity flanges toward high-value railway assemblies to counter the 10-15% margin pressure seen in fragmented segments.

Competitive Landscape

Highly competitive with a large number of players and low product differentiation, leading to liberal credit policies and thin margins.

Competitive Moat

The company's moat is based on its 20+ years of promoter experience and its status as a government-recognized export house. However, this moat is currently weakened by liquidity issues and a default credit rating, which threatens the sustainability of operations.

Macro Economic Sensitivity

Highly sensitive to industrial CAPEX cycles in the oil & gas and railway sectors. A slowdown in infrastructure spending would directly reduce demand for flanges and fittings.

Consumer Behavior

Shift in Indian Railways toward domestic procurement for wagon wheels provides a significant demand tailwind for local manufacturers like HMFL.

Geopolitical Risks

Trade barriers or economic shifts in the USA and Europe could impact the export-heavy revenue base, which currently serves distributors in those regions.

⚖️ Regulatory & Governance

Industry Regulations

Operations must comply with Indian Railways' technical standards (RITES) for fracture and technical compatibility. It also adheres to the Companies Act 2013 and SEBI Listing Regulations, though it has faced procedural delays in board meetings.

Environmental Compliance

The company aims for zero harmful gas combustion products and the elimination of aerosol emissions within its plants.

Taxation Policy Impact

The effective tax provision for FY25 was a credit of INR 7.87 Lakhs, compared to a tax expense of INR 117.94 Lakhs in FY24.

Legal Contingencies

Not disclosed in available documents, though the company has faced 'Issuer Not Cooperating' actions from credit agencies due to failure to provide monitoring information.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the company's ability to service debt, given its CARE D rating and stretched liquidity. A failure to complete the Rights Issue could lead to a 100% cessation of growth initiatives.