TIRUPATIFL - Tirupati Forge

📊 NSE: TIRUPATIFL 🏢 Castings & Forgings 📅 Last Updated: 12/14/2025 14:24

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment (Forging). Total income for Q2 FY26 reached INR 40.73 Cr, representing a 23.7% growth QoQ from INR 32.92 Cr in Q1 FY26. For H1 FY26, revenue was INR 73.64 Cr, up 19.1% YoY from INR 61.82 Cr.

Geographic Revenue Split

The United States is identified as the key export market. While specific regional percentages are not disclosed, the 50% duty imposed by the U.S. significantly influenced the revenue increase to INR 40.73 Cr in Q2 FY26 due to higher tariff-inclusive pricing.

Profitability Margins

Net Profit Margin for Q2 FY26 stood at 3.3% (INR 1.34 Cr), a decline from the previous quarter's 4.3%. H1 FY26 Net Profit was INR 2.75 Cr, a 47.6% decrease from INR 5.25 Cr in H1 FY25, primarily due to higher depreciation and finance costs.

EBITDA Margin

EBITDA for Q2 FY26 was INR 4.29 Cr, resulting in an EBITDA margin of 10.5%. This was a marginal 0.2% decrease from INR 4.30 Cr in Q1 FY26, reflecting pressure from increased employee expenses and operational costs.

Capital Expenditure

In H1 FY26, the company invested INR 19.43 Cr in Property, Plant, and Equipment (net of subsidy) and Capital Work in Progress, primarily for the new defence manufacturing unit and solar assets.

Credit Rating & Borrowing

Not disclosed in available documents; however, finance costs increased during the period due to the commissioning of solar and defence assets.

⚙️ Operational Drivers

Raw Materials

Carbon Steel represents the primary raw material for manufacturing forged flanges and components, though its specific percentage of total cost is not disclosed.

Capacity Expansion

The company is establishing a fully automated shell body manufacturing plant for the defence sector. Production is expected to commence in Q1 FY27, with a target of 100% capacity utilization by H2 FY27. Further expansion of the defence facility is planned for FY27.

Raw Material Costs

Raw material costs are a significant component of the manufacturing process for forged flanges, but specific YoY cost changes and procurement strategies were not detailed beyond the impact of US tariffs on final pricing.

Manufacturing Efficiency

The company aims for 100% capacity utilization at its new defence unit by H2 FY27 to optimize manufacturing efficiency and absorb fixed costs.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth will be driven by a transformational shift into defence manufacturing (shell body production) starting Q1 FY27. The company expects meaningful topline growth and improved profitability from Q2 FY27 as the defence unit scales to 100% capacity and the solar plant reaches full utilization.

Products & Services

Carbon Steel Forged Flanges, Forged Components, Automotive Components, and Defence Shell Bodies.

Brand Portfolio

Tirupati Forge.

New Products/Services

Defence shell bodies are the primary new product line, with commercial operations expected to start in Q4 FY26 and contribute significantly to revenue from FY27 onwards.

Market Expansion

Expansion into the domestic and international defence ecosystem is the primary focus, with facility expansions planned for FY27 to meet inbound inquiries.

🌍 External Factors

Industry Trends

The forging industry is seeing a shift toward specialized components for defence. Tirupati Forge is positioning itself for this transition by building a fully automated, state-of-the-art shell body plant to capture domestic and international demand.

Competitive Landscape

The company faces competition in the global forging market, particularly from low-cost producers, necessitating a move into high-value defence segments.

Competitive Moat

The company's moat is built on its strategic pivot to automated defence manufacturing and its commitment to sustainable energy through captive solar assets, which are expected to provide a long-term cost advantage.

Macro Economic Sensitivity

Highly sensitive to international trade policies and tariffs, particularly U.S. import duties which directly impact export competitiveness.

Consumer Behavior

Increasing demand for indigenous defence production in India is a key trend the company is leveraging.

Geopolitical Risks

Trade barriers, such as the 50% U.S. duty, represent a significant geopolitical risk to the company's established forging export business.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to U.S. import tariffs (50% duty) and Indian government solar energy policies, both of which have recently impacted financial performance.

Environmental Compliance

The company is investing in clean energy via a solar plant to ensure long-term ESG compliance and reduce carbon footprint.

Taxation Policy Impact

The effective tax rate for H1 FY26 was approximately 26.5% (INR 0.99 Cr tax on INR 3.74 Cr PBT).

Legal Contingencies

The company has made a provision for expected credit loss of INR 1.20 Cr as of September 30, 2025, related to pending legal cases CC/1349/2021 to CC/1352/2021.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timeline for the defence unit to reach 100% capacity utilization and the potential for further changes in U.S. trade policy or domestic solar regulations.