Gala Precision working capital climbed to 140 days in FY26

Gala Precision Engineering Limited reported 140.47 working-capital days in FY26, up from 83.36 in FY24, while inventory and trade receivables reached a combined Rs 170.9 crore. Over the same two years, revenue from operations rose to Rs 314.3 crore from Rs 202.5 crore, and reported return on equity declined to 13.34% from 26.14%.

What changed in Gala Precision’s working-capital days?

Gala Precision’s working-capital days increased by 57.11 days, from 83.36 in FY24 to 116.35 in FY25 and 140.47 in FY26. The FY26 measure was 24.12 days above FY25, even as revenue from operations accelerated by 32.2% to Rs 314.3 crore from Rs 237.8 crore.

The presentation does not provide the formula used for working-capital days or disclose a target for the measure. It does show that inventory and trade receivables, which are current-asset balances associated with operating working capital, both increased across the three reported financial years.

Revenue grew by Rs 111.8 crore, or 55.2%, between FY24 and FY26, while working-capital days rose by about 68.5%. The comparison does not establish why the days increased, but it shows that the company’s reported working-capital measure expanded faster than revenue over the two years.

Which balance-sheet items expanded at Gala Precision?

Gala Precision’s inventory increased to Rs 89.4 crore in FY26 from Rs 57.7 crore in FY24, a rise of Rs 31.7 crore. Trade receivables increased by Rs 34.5 crore over the same period to Rs 81.5 crore from Rs 47.0 crore, alongside the Rs 111.8 crore increase in revenue.

Combined inventory and trade receivables rose to Rs 170.9 crore in FY26 from Rs 104.7 crore in FY24, an increase of Rs 66.2 crore. Their 63.2% increase exceeded the 55.2% rise in revenue during the same FY24-to-FY26 period, alongside the increase in reported working-capital days.

At H1-FY27, inventory was Rs 94.5 crore, Rs 5.1 crore above the FY26 closing balance, and trade receivables were Rs 91.9 crore, Rs 10.4 crore above FY26. Other current assets also increased to Rs 22.4 crore at H1-FY27 from Rs 19.7 crore in FY26, although the presentation does not explain their composition or movement.

Cash and cash equivalents moved in the opposite direction, falling to Rs 50 lakh at H1-FY27 from Rs 11.5 crore at FY26. Bank balances other than cash and cash equivalents were Rs 35.2 crore at H1-FY27, compared with Rs 39.0 crore at FY26, while total assets rose to Rs 387.6 crore from Rs 374.5 crore.

How did Gala Precision’s returns change as revenue grew?

Gala Precision’s return on equity, or ROE, declined to 13.34% in FY26 from 26.14% in FY24, while return on capital employed, or ROCE, decreased to 13.94% from 21.14%. The presentation states that profit after tax, or PAT, margins and ROE calculations exclude exceptional items, meaning the reported ROE series uses PAT before exceptional items.

Revenue rose from Rs 202.5 crore in FY24 to Rs 314.3 crore in FY26, and PAT before exceptional items increased from Rs 24.6 crore to Rs 36.6 crore. Net worth, which matches total equity in the historical balance sheet, expanded from Rs 104.5 crore to Rs 292.5 crore over the same period.

Operating profitability also changed over the period. Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased from Rs 38.8 crore in FY24 to Rs 51.9 crore in FY26, but EBITDA margin declined to 16.51% from 19.16%; PAT margin before exceptional items was 11.64% in FY26, compared with 12.15% in FY24.

FY25 recorded the larger year-on-year decline in the return series, with ROE falling to 15.02% and ROCE to 14.95%, from 26.14% and 21.14%, respectively, in FY24. In FY25, net worth increased by Rs 151.8 crore to Rs 256.3 crore, while PAT before exceptional items increased by Rs 2.5 crore to Rs 27.1 crore.

What does H1-FY27 show about Gala Precision’s balance sheet?

Gala Precision reported H1-FY27 revenue of Rs 169.1 crore, up 25.7% from Rs 134.5 crore in H1-FY26, while EBITDA increased 34.6% to Rs 28.0 crore. Its H1-FY27 EBITDA margin was 16.56%, 110 basis points above the 15.46% reported in H1-FY26 and close to the 16.51% FY26 full-year margin.

The balance sheet at H1-FY27 showed total equity of Rs 311.3 crore, up from Rs 292.5 crore at FY26, and total liabilities of Rs 76.3 crore, down from Rs 82.0 crore. Current borrowings declined to Rs 30.3 crore from Rs 34.9 crore, while non-current borrowings declined to Rs 1.3 crore from Rs 1.6 crore.

Trade payables due other than to micro and small enterprises fell to Rs 13.2 crore at H1-FY27 from Rs 19.0 crore at FY26. At the same time, dues to micro and small enterprises rose to Rs 2.1 crore from Rs 1.0 crore, and other current liabilities increased to Rs 10.8 crore from Rs 6.6 crore.

The presentation does not report working-capital days for H1-FY27, so FY26’s 140.47 days remain the latest disclosed measure. H1-FY27 inventory and receivables were both above their FY26 balances, but the supplied partial-year data do not establish a new annual working-capital-days outcome.

Conclusion

Gala Precision combined higher revenue and profit with a larger balance-sheet commitment to inventory and receivables between FY24 and FY26. Revenue increased 55.2% to Rs 314.3 crore, while working-capital days rose from 83.36 to 140.47 and reported ROE and ROCE declined from 26.14% and 21.14% to 13.34% and 13.94%, respectively.

The unresolved point is whether Gala Precision can report an updated working-capital-days measure after FY26, particularly as H1-FY27 inventory reached Rs 94.5 crore and receivables reached Rs 91.9 crore. Management disclosed no working-capital target or plan for the metric in the supplied presentation.