Gala Precision Engineering FY26: Fasteners scale up, Chennai ramps, and renewables stay in the driver’s seat

Gala Precision Engineering ended FY26 with strong growth in revenue and profit, even as margins saw a small dip driven largely by foreign exchange impact. For Q4 FY26, revenue from operations came in at INR 946 million, up 25.6% year on year. EBITDA rose 30.7% to INR 166 million, with margin improving to 17.55%. PAT for the quarter stood at INR 122 million, up 22.0% year on year.

For the full year, the company reported revenue from operations of INR 3,143 million, up 32.2% year on year. EBITDA rose 27.2% to INR 519 million and PAT after exceptional items was INR 355 million, up 32.5%. The company also highlighted multi-year momentum, citing FY22 to FY26 CAGR of 22% in revenue, 28% in EBITDA, and 52% in PAT.

A key FY26 theme was the continued importance of renewables and the fasteners business. The FY26 end-user mix was led by renewable energy at 42%, followed by industrial at 32% and mobility at 26%. On the product side, Disc and Strip Springs remained the largest contributor at 49% of FY26 revenue, Special Fastening Solutions contributed 34%, and Coil and Spiral Springs contributed 17%.

The fasteners milestone and what changed in FY26

The company’s Special Fastening Solutions business crossed a meaningful milestone during the year. Management disclosed that SFS revenue exceeded INR 1,000 million and reached INR 1,080 million in FY26, delivering 64% year-on-year growth. The company also said it successfully entered the offshore wind turbine segment by developing and supplying critical fasteners for global OEMs.

The management commentary suggests the SFS growth is being driven by three levers. First, share gains at existing customers, where management believes it still has only 10% to 25% share in many accounts and aims to increase wallet share. Second, the new bolt program, enabled by the Chennai plant. Third, expanding beyond renewables into industrial applications such as gas turbines, railways, construction equipment, mining equipment, and agriculture equipment, where management said it is seeing inquiries and orders.

Management also described a structured approach to growth: around 10% to 15% annual growth from new customer additions, about 10% to 12% from new parts sold to existing customers, and a further 5% to 7% from organic growth within existing programs.

Chennai plant: from trial runs to a clear ramp plan

A major execution lever for fasteners is the company’s Chennai (Vallam) facility. The investor presentation states that the Chennai facility has capacity of 4,600 MT and operated at around 35% utilization in FY26, with utilization expected to increase to 70% in FY27.

On the earnings call, management added detail. It described trial runs and customer audits during the year, first dispatch to Vestas as a PPAP lot in July, and a steady ramp to about INR 5 crore per month in Phase 1. Phase 2 capex has commenced and is expected to complete by June end or July. Management said Phase 2 should add another INR 5 crore per month in capacity, taking annual capacity to around INR 120 crore.

For FY27, management indicated it expects around INR 80 crore of sales from Chennai. It also spoke about reaching INR 9 to 10 crore per month run rate in the last quarter of FY27. Products manufactured at Chennai include studs and high-tensile bolts, with bolt sizes mentioned from M27, M32 up to M72. The company also stated that high tensile bolts supply to a global wind OEM in India started from the Chennai plant in Q4.

If this ramp is delivered, Chennai can shift from being an underutilized asset to a major growth contributor. But management also acknowledged an operational constraint: after Phase 2, the existing land parcel at Chennai will not have space for further expansion. As a backup, it said it may shift the stud facility to a long-term lease-based location to free space for bolt manufacturing expansion.

Margins, forex, and working capital: what the documents reveal

FY26 EBITDA margin was 16.51% versus 17.16% in FY25. Management attributed the decline primarily to a forex loss of around INR 3.23 crore, which it quantified as roughly a 1% impact. The CFO stated that there was no major adverse change in product mix or raw material contribution.

On commodity inflation, management said raw material is 100% pass-through, while certain processing costs such as gas can have a lag effect, and the company is in discussions with customers for price revision.

A bigger visible concern from the investor presentation is working capital. Working capital days increased to 140.47 in FY26 from 116.35 in FY25. During the call, management linked part of this to ramp-up inventory requirements at Chennai. It stated overall inventory levels were around 103 days and it aims to avoid an increase beyond that level, while attempting to reduce inventory days by around 10 days.

The company also disclosed a change in hedging policy. It reduced forward cover from about 70% of estimated export collections earlier to about 40% now, with a 12-month coverage horizon. Management also noted a natural hedge from imports.

Capital allocation and expansion pipeline

The company provided an update on IPO proceeds. It reported INR 1,212.4 million received, with deployment including loan repayment of INR 454.3 million and capex at Chennai and Wada. The company also reported fixed deposits created in HDFC Bank and Yes Bank as part of the proceeds management.

Beyond Chennai, management discussed land acquisition plans near Wada to support future expansion. It stated it is in advanced commercial discussions on two to three plots and expects closure not before June, with June end or July being the earliest. It also indicated that approvals and full construction could take 9 to 12 months after initial approvals, and gave a rough indication of around INR 50 crore capex deployment in the current year depending on timing.

The company also highlighted operational initiatives. It disclosed IoT implementation on the shop floor and commencement of SAP S/4HANA implementation. On sustainability, it placed an order for 1.8 MW under an open access solar power plant.

Financial summary

The key investor takeaway for FY27

Management’s near-term direction is centered on sustaining 20% to 25% growth while scaling fasteners. It also guided that exports should remain around 35% to 40% of sales. In wind energy, management expects 25% to 30% short-term growth for fasteners and springs.

At the same time, two monitoring points stand out from the disclosures. First, working capital intensity has increased and will need improvement for better cash conversion as growth continues. Second, the company disclosed that the wedge lock washer patent case is ongoing, with the next hearing scheduled in June.

Overall, the documents depict a company with a diversified product base, rising penetration in renewables, and a clear manufacturing ramp plan in Chennai. FY27 execution will likely be judged on two things: how quickly the Chennai facility moves toward the guided utilization levels, and whether working capital normalizes as the expansion scales.