Maiden Forgings FY26: Record volumes, but margins still under pressure

Maiden Forgings Limited reported FY26 total income of 233.96 crore, EBITDA of 17.22 crore and PAT of 5.02 crore. The second half was stronger on the bottom line. H2 FY26 net profit rose to 2.93 crore versus 2.00 crore in H2 FY25, a year-on-year increase of 46.37%, while total income increased to 122.60 crore.

Operationally, management highlighted FY26 as the company’s highest-ever production year at 35,546 metric tons. The narrative across the investor presentation and the earnings call was that volume growth, product mix changes and a major plant consolidation program are being positioned to support the next phase of profitability.

What the numbers say: growth in H2, but FY26 margins softened

The company’s FY26 income recovered versus FY25, but profitability metrics continued to trend down compared with FY24. FY26 EBITDA margin was reported at 7.36% versus 10.14% in FY24. PAT margin declined to 2.15% in FY26 versus 4.10% in FY24.

A second theme was balance sheet stretch. Trade receivables increased to 39.42 crore in FY26 from 29.69 crore in FY25, and inventories rose to 83.12 crore from 75.80 crore. Receivable turnover fell to 5.88 times in FY26 from 10.61 times in FY24, indicating a larger working-capital footprint.

Consolidation at Modinagar: a cost saving lever the company is betting on

A key strategic driver is the company’s 4-acre land acquisition at Modinagar, Ghaziabad, intended to consolidate two existing units. The investor presentation quantified the targeted benefit as minimum monthly savings of 25,00,000 and annual savings of about 2,50,00,000, positioned as a direct boost to the bottom line.

Management reiterated on the concall that shifting activity for Unit II has been underway since April 2026 and that the new facility is expected to be operational very soon. The company also plans a solar plant installation at the consolidated site, described as a sustainability and cost-efficiency initiative, though without quantified energy savings.

Notably, management claimed the capex and growth during the year were funded through internal accruals, with no external capital raised. Investors will likely link this statement to future disclosure on cash generation and working-capital movement, especially given the rise in inventories and receivables.

Product mix and new lines: nails, stainless steel and upcoming GI wires

Management attributed the stronger profitability trend in the last quarter mainly to product mix improvement. In the concall, the Managing Director said the company increased sales of higher-value and higher-margin products such as pneumatic nails, stainless steel bars and alloy steel bars. The presentation also highlights that stainless steel product value is around four times that of carbon and alloy steel products.

The pneumatic nails project is positioned as a value-added export-oriented business. The company stated it invested 8 crores from internal accruals to establish an in-house pneumatic nails plant with 250 TPM capacity, after initially exporting nails through job work starting FY2021-22. In the concall, management said recent utilization of the pneumatic nails facility was around 60% to 70%.

Beyond nails, management discussed upcoming product lines, specifically GI wires and stainless steel machine components, to be introduced after the shifting is completed. The concall included a target timeline of commercial production by September, with a trial and scale-up period of 3 to 6 months. Management also stated that the two new products together would add about 9,000 to 10,000 tons per annum of capacity, taking total installed capacity from about 53,000 to about 62,000-63,000.

B2G and defense: registrations as a gateway, with a sales mix target

The company’s strategic entry into B2G and defense is a prominent theme. The investor presentation cited registration with the Ordnance Factory Board and an initial B2G order from Hindustan Aeronautics Limited in September 2024. The press note also mentioned CEMILAC registration for defense applications and OFB Muradnagar registration.

On the concall, management expanded this list to include registrations with Terminal Ballistics Research Laboratory (TBRL) DRDO, Chandigarh and CEMILAC DRDO, Bangalore, and stated the company executed orders for HAL, BHEL and NTPC.

When asked about expected contribution, management stated a target of 20% to 25% of sales from the B2G segment in the medium term. The call did not provide quantified order pipeline data, with management requesting queries to be sent via email for exact numbers.

Takeaways

Maiden Forgings ended FY26 with record production and a notable improvement in H2 profitability, while full-year margins and return ratios remained under pressure compared with FY24. The near-term investment case, based strictly on management disclosures, rests on whether plant consolidation delivers the stated annual savings, whether new product lines scale as per the September commercialization target, and whether B2G registrations translate into a meaningful revenue stream in line with the stated 20% to 25% medium-term sales mix ambition.