Gala Precision targets Rs 900 crore Wada capacity in phases

Gala Precision Engineering Limited is targeting annual manufacturing capacity of Rs 900 crore through phased development of a 10-acre Wada site, doubling its current Rs 450 crore base, while management aims to make an initial Rs 100 crore addition partly operational by Q4 FY28 as a contingency against approval or construction delays.

What is Gala Precision's Wada capacity target?

Gala Precision plans to add about Rs 450 crore of annual capacity at Wada, which would take total annual capacity from Rs 450 crore to Rs 900 crore. Management said the 10-acre parcel would be sufficient for this expansion and would be developed in at least two to three phases rather than through a single build-out.

The company described the Wada parcel as being in its control, but said the legal process was still nearing completion on November 6, 2026. Gala Precision signed a memorandum of understanding for the 10-acre plot in June 2026, shared a draft agreement with the seller and said legal details had taken longer than anticipated.

Management measures this capacity in turnover terms, so the Rs 900 crore figure is a manufacturing-capacity objective rather than a sales forecast. Company-level utilisation was about 80% to 85% at the time of the call, with DSS at the higher end and CSS somewhat lower, according to management.

When will Gala Precision add its first Wada capacity?

Gala Precision is internally targeting partial operations at the new Wada capacity by Q4 FY28. The first step is expected to add Rs 100 crore of capacity, lifting the present Rs 450 crore base to Rs 550 crore and providing capacity for FY28 requirements.

Management made clear that this Rs 100 crore addition is a backup plan if government approvals or completion of the larger development are delayed. It said the interim capacity could come from Chennai Phase 2, line balancing at Wada and, if necessary, a small amount of temporary rented premises.

The current Rs 450 crore capacity is expected to meet turnover in FY27. Gala Precision said it can add line-balancing machines where space is available to remove bottlenecks, and that some equipment is already included in its stated capacity while other machines remain in the pipeline.

How will Chennai support Gala Precision's FY28 capacity plan?

Gala Precision expects Chennai Phase 2 to be ready in the last quarter under its existing plan. Management said a 10,000-square-foot mezzanine floor would be completed by the end of November 2026, allowing machinery and operations to be shifted before the next phase is readied.

The Chennai fastener facility has installed capacity of 4,600 metric tonnes and produces high-tensile fasteners, including bolts. Its utilisation was 35% in FY26, and management expected it to reach 70% in FY27, showing that the facility has scope to absorb higher production before the full Wada build-out is completed.

Chennai Phase 2 is part of the bridge to the Rs 550 crore contingency capacity, not a replacement for the full Wada project. Management's long-term plan remains to build Rs 450 crore of additional capacity on the 10-acre Wada parcel in two to three stages.

How much will Gala Precision spend on expansion?

Gala Precision plans approximately Rs 40 crore to Rs 45 crore of capital expenditure in FY28. Management said this spending should support more than Rs 100 crore of turnover and reflects its usual approach of investing annually to serve the following year's demand.

Land purchases follow a different pattern because they are intended to provide for three to five years, management said. Banks do not provide term loans for land, so Gala Precision expects to use internal accruals or general corporate funds to pay for the Wada plot.

The company disclosed Rs 58 crore of bank finance, including Rs 15 crore of fund-based working-capital facilities, Rs 10 crore of non-fund working capital for a non-cash bank-guarantee facility and Rs 28 crore of term loan. Management said any additional term borrowing in FY28 would depend on fund flows and the eventual capital-spending requirement.

What demand is behind Gala Precision's capacity expansion?

Gala Precision reported Q2 FY27 revenue from operations of around Rs 94 crore, up 31% year on year, while H1 FY27 revenue was around Rs 169 crore, up 26%. Management attributed growth mainly to volume, with organic growth, additional components for existing customers and new customers each contributing about 10%.

The order book grew 44% year on year and exceeded Rs 100 crore in a quarter for the first time. In H1 FY27, DSS represented about 53% of revenue, SFS 31% and CSS 16%, while renewable energy accounted for 42%, industrial 33% and mobility 25%.

Management said it was on track for 25% sales growth in FY27, supported by order booking and dispatch momentum. Q2 FY27 revenue included about Rs 3 crore of dispatches held back in Q1, while exports represented approximately 36% of revenue and contributed to a working-capital cycle of about 90 to 100 days for export sales.

Conclusion

Gala Precision's expansion plan combines a long-term Rs 900 crore capacity objective with a nearer-term Rs 550 crore contingency position for FY28. The 10-acre Wada parcel is intended to deliver the full Rs 450 crore increment, while Chennai Phase 2, Wada line balancing and possible rented space are meant to protect production if the main development takes longer.

The next milestones are completion of the Wada agreement after the June 2026 memorandum of understanding, the targeted Q4 FY28 partial start-up and the completion of Chennai's 10,000-square-foot mezzanine floor. Management's Rs 40 crore to Rs 45 crore FY28 capital-expenditure plan and its decision on further borrowing will depend on funding needs and demand growth.