/** Title: OBSC Perfection: FY26 Growth Surges, Exports and New Processes Take Center Stage */

OBSC Perfection: FY26 Growth Surges, Exports and New Processes Take Center Stage

OBSC Perfection Limited closed FY26 with its highest-ever scale, supported by a sharp rise in revenue and steady operating profitability. Total income for FY26 stood at INR223.52 crore, up 53.9% year-on-year from INR145.20 crore. Operating EBITDA rose to INR43.64 crore, and profit after tax reached INR27.02 crore, a 61.2% year-on-year increase. The company also posted a strong Q4 FY26, with total revenue at INR72.52 crore compared with INR41.84 crore in Q4 FY25.

The management’s narrative for FY26 is straightforward: capacity was expanded, new processes were added, and exports and non-automotive segments were scaled. On the earnings call, the Managing Director stated that the company had guided for 40% revenue growth and a 2% gross margin improvement, and that it surpassed both targets. The presentation also notes gross margin improvement of 284 basis points to 28.7% in FY26.

Revenue mix: Automotive remains dominant, but diversification is visible

OBSC Perfection remains largely an automotive-linked precision engineering supplier, but the mix is shifting gradually. In FY26, automotive contributed 85.6% of revenue from operations, down from 91.1% in FY25. Marine and defense have expanded meaningfully in absolute terms, with defense revenue more than doubling year-on-year as disclosed in the presentation.

Geographically, exports constituted 19.6% of FY26 revenue from operations. Export revenue increased to INR42.95 crore in FY26 from INR28.70 crore in FY25. The company exports to 17 countries, and the deck highlights growth in exports over FY23 to FY26.

Expansion strategy: Land, consolidation, and adding processes

A major theme in the presentation is the move toward being an integrated supplier with multiple in-house processes. The company lists machining, investment casting, hot forging, cold forging, stamping, surface treatment, and welding and fabrication among its capabilities.

The most prominent strategic development is land acquisition and the plan for a consolidated mega facility. The presentation states acquisition of 8.4 acres at Supa, Maharashtra, with an additional 2 acres under acquisition, and around 1 acre at GIDC Sanand. In the earnings call, management stated the Supa parcel is about 11 acres and was acquired for around INR17 to INR18 crore. The stated intent is to integrate processes such as casting, forging, and stamping and consolidate rented facilities, while also creating expansion headroom.

Sanand is being positioned as a strategic automotive hub. On the call, management said the company has a confirmed nomination from Tenneco for shock absorber rods and that a plant has been set up dedicated to this application.

The presentation also highlights stamping as a new capability. It notes 30+ pneumatic presses and 2 CNC tube bending machines, with stamping capacity planned to be installed during Q1 FY27. It further mentions access to ongoing recurring business of about INR2 crore per month linked to the stamping asset purchase. Management described stamping as a path toward welded assemblies and sub-assemblies, which they see as a larger share of customer spend.

Forging is another major step-up. The deck states the company’s combined hot and cold forging capacity has reached 12,000 tons per annum, with current utilisation around 30%. Management linked the multi-process strategy to resilience and scalability in an uncertain market environment and emphasized a phased approach to expansion to avoid excessive depreciation before demand ramps.

Working capital and cash flows: Growth came with cash absorption

FY26 also came with higher working capital intensity. Trade receivables rose to INR66.09 crore from INR34.93 crore, and inventories increased to INR47.18 crore from INR26.69 crore. Debtor days increased from 90 to 110 and inventory days from 91 to 110. Payable days also expanded from 87 to 119, which partially cushioned the working capital build.

Despite management highlighting that the cash conversion cycle increased by only about 7 days to 101, the cash flow statement shows that net cash flow from operating activities turned negative in FY26, at about negative INR1.95 crore. The key driver was a sharp increase in current assets.

On the investing side, FY26 cash outflow was significant, with purchase of fixed assets at INR53.02 crore and capital advance toward purchase of land at INR23.66 crore, leading to a net investing cash outflow of INR76.03 crore.

The financing section reflects how the expansion was funded. FY26 shows increased borrowings of INR41.57 crore and an increase in share capital and premium of INR40.96 crore. The Managing Director referenced a preferential issue of INR43.3 crore during the year to support growth initiatives.

Order book and guidance: Visibility is strong, but execution remains key

The presentation cites an order book of INR1200+ crore, with 56% from exports and an average order book life of 5 to 6 years. It also highlights that export orders account for 56% of the total order book, a mix that is significantly higher than the current export share in revenue.

In the earnings call, management indicated that the INR1200 crore order book is expected to convert over five to six years, translating to about INR100 crore to INR200 crore per year in revenue addition, though project start dates vary. For FY27, management guided for revenue growth of around 40% to 45%. Management also guided that margins should at least be sustained and suggested export mix could exceed 30% to 35% in FY27, with exports priced at least about 10% above domestic pricing.

Capex guidance for FY27 was indicated at around INR15 crore to INR20 crore of incremental capex. The company also reiterated that capacity build-out will be phased to manage depreciation and maintain financial discipline.

Key takeaways

OBSC Perfection’s FY26 performance reflects a company moving from being a machining-focused supplier toward a broader precision engineering platform with multiple processes. The numbers show strong growth and improving profitability, while the strategic narrative centers on scale, exports, and diversification into defense and newer sectors.

At the same time, FY26 highlights the trade-off between growth and cash generation. Working capital expanded materially and operating cash flows turned negative, even as reported earnings improved. The company’s FY27 guidance of 40% to 45% revenue growth and rising export mix sets a high execution bar, especially as capex continues and new facilities ramp.

If the company can translate its large order book into revenue while managing working capital, and if exports rise toward the mix discussed by management, FY27 could mark another step-up in scale. The planned consolidation and added stamping and forging capabilities also suggest a longer-term push toward higher-value sub-assemblies, which management repeatedly referenced as the strategic endgame.