Pitti Engineering: Navigating Growth with Strategic Acquisitions and Diversified Markets

Pitti Engineering Limited, a prominent player in the manufacturing of electrical laminations and machined components, has reported a robust performance for the second quarter and half-year ended September 30, 2025 (Q2 & H1 FY26). The company achieved its highest-ever quarterly total income of INR 499.1 crores, marking a 9.6% year-on-year increase. This strong top-line growth was complemented by an impressive 17.5% year-on-year rise in EBITDA to INR 77.7 crores, with margins remaining stable at 16.3%. Profit After Tax (PAT) also saw a healthy increase of 5.4% year-on-year, reaching INR 40.1 crores for Q2 FY26.

The company's H1 FY26 performance further underscores its growth trajectory, with total income reaching INR 963.0 crores, up 13.3% year-on-year. EBITDA for H1 FY26 stood at INR 153.0 crores, a significant 23.3% increase, and PAT grew by 9.7% to INR 63.0 crores. These figures reflect Pitti Engineering's successful strategy of focusing on value-added products and leveraging its vertically integrated manufacturing capabilities.

Segmental Performance and Market Diversification

Pitti Engineering's revenue streams are well-diversified across various industries. For H1 FY26, traction motor and railway components contributed 34% of the revenue, followed by renewable energy at 17% and power generation at 12%. Industrial and commercial sectors, along with special purpose motors, accounted for 6% and 5% respectively. The company's deep engagement with global OEMs and its ability to provide customized solutions have been pivotal in strengthening its position across these segments.

Notably, the data center segment has shown exceptional growth, with revenue doubling year-on-year for Q2 FY26, now contributing approximately 4% to the total revenue. This surge is driven by the global digital infrastructure boom, fueling demand for high-efficiency motors and thermal components. Pitti Engineering is actively engaging with customers to realign its capacities to meet this anticipated rising demand, particularly in traction motors, power generation, and wind power segments.

Financial Summary (Consolidated - H1 FY26)

Strategic Initiatives and Capacity Expansion

Pitti Engineering has been proactive in its strategic growth, both organically and inorganically. The company completed two significant acquisitions in 2024:

1. Pitti Industries Private Limited: Acquired in March 2024 for Rs. 124.9 crores, this acquisition specializes in electrical steel laminations, assemblies, and die-cast rotors. It adds two manufacturing facilities in Tumakuru, Karnataka, with an installed capacity of 18,000 MTPA, significantly enhancing the company's presence in South India and boosting its production capacity.

2. Dakshin Foundry Private Limited: Acquired in July 2024 for Rs. 153.1 crores, this acquisition brings in high-quality casting capabilities, including ductile iron, grey iron, and alloy steel castings. The facility in Hosakote, Bangalore, has a capacity of 4,200 MTPA, adding valuable assets and increasing production capabilities to achieve economies of scale.

These acquisitions are complemented by ongoing organic capacity expansion. The Bangalore facility's capacity increase has already commenced, with order flows expected from Q4 onwards. Management anticipates achieving 80% utilization of the consolidated capacity by the end of FY '27. For the new capex of INR 150 crores, an additional 8,000 to 9,000 tons will be added by the end of this year, with the remainder in H1 FY '27.

Outlook and Management Commentary

Management remains optimistic about future growth, driven by sustained order inflows from traction motor, railway components, data center, and renewable energy sectors. The company aims to achieve 93,000 to 94,000 tons of lamination sales over the next three years, up from the current year's target of 70,000 tons. For machine components, the target is to reach approximately 15,000 tons of raw castings and machine components combined over the same period.

Despite the positive outlook, the company acknowledges challenges, particularly regarding raw material availability and pricing volatility. Restrictions on imports due to quality control orders and the non-renewal of BIS approvals for Chinese mills have necessitated importing materials from Korea and Japan, leading to an inventory buildup. The balance sheet is currently stressed due to these factors, making the company cautious about further large capital outlays, especially in working capital-intensive areas like copper winding.

However, Pitti Engineering's proactive approach to diversifying its sourcing strategy, optimizing production across facilities, and focusing on margin-accretive, value-added products positions it well to navigate these challenges. The company is also exploring inorganic growth opportunities beyond FY '27 to diversify into new end markets and geographies, including potential ventures into forging, to sustain its growth momentum.

Concluding Thoughts

Pitti Engineering Limited's Q2 and H1 FY26 performance demonstrates strategic clarity and disciplined execution. The company's ability to deliver record financial results amidst supply chain challenges, coupled with its strategic acquisitions and capacity expansions, highlights its resilience and growth potential. With a strong focus on value-added products and diversified market presence, Pitti Engineering is well-positioned to capitalize on emerging opportunities in the engineering components sector.