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Pitti Engineering FY26: Growth Holds, Capex Steps Up for the Next Cycle

Pitti Engineering Limited reported FY26 consolidated total income of INR 1,952.9 crore, up 12 percent year on year, as the company continued its transition from a lamination-focused manufacturer to a broader integrated engineering supplier. Adjusted EBITDA rose to INR 325.8 crore, up nearly 20 percent, taking adjusted EBITDA margin to 17.0 percent for the year. Adjusted PAT stood at INR 128.1 crore.

The year ended with a weaker Q4 profit trajectory. Consolidated total income for Q4FY26 was INR 505.6 crore versus INR 472.3 crore in Q4FY25, but adjusted PAT declined to INR 29.0 crore from INR 36.7 crore. Management attributed the quarter’s softness largely to dispatch disruptions and lower foundry output, including issues related to petroleum products used in foundry operations and shipping constraints that delayed export dispatches.

What moved in volumes and utilization

On the volume side, laminations and assemblies increased in FY26 to 65,599 MT from 59,412 MT, as shown in the company’s sales breakup by volume. Within laminations, the mix continued to move towards higher value-added assemblies and integrated products. Management reiterated on the call that loose laminations remain closer to an engineering commodity, while high value-added assemblies and integrated stator or rotor solutions carry higher realizations.

Capacity utilization improved for the full year. The investor presentation reported FY26 utilization of 76 percent for sheet metal, 81 percent for machining hours, and 71 percent for castings. Quarter utilization trends were mixed. Casting utilization fell to 64 percent in Q4FY26 from 83 percent in Q4FY25, reflecting the operational issues management described.

Financial snapshot

End market mix stays diversified

Pitti disclosed industry-wise revenue mix for FY26, showing traction motors and railway components at 33 percent of revenue, power generation at 15 percent, and mining oil and gas at 13 percent. Industrial and commercial contributed 7 percent, renewable energy 6 percent, special purpose motors 3 percent, data centers 3 percent, and by-products and others 19 percent.

This diversification was central to management’s narrative. They said wind energy demand moderated, but data centers and industrial motors offset the slowdown. Management also described rail traction as a strategic focus, while pointing out that international locomotive and metro programs add diversification even as domestic railway capex moderates.

Capex: building for the next growth cycle

Pitti’s FY26 investor presentation centered on two capex tracks. First is the ongoing INR 150 crore capex approved on 7 August 2025. The company said it has already incurred about INR 100 crore and expects capacity additions to be operational by end of H1FY27. This program targets consolidated capacity expansion across sheet metal, machining hours, and castings, including sheet metal capacity rising from 90,000 MT to 108,000 MT and casting capacity moving to 24,600 MT after incremental 6,000 MT debottlenecking.

The second track is a newly approved greenfield facility for casting and machined components with planned capex of INR 290 crore. The company’s board disclosure stated the project would be funded through internal accruals and lease finance and is expected to be completed in three years. In the investor presentation, the company indicated commissioning by Q1FY30, with total casting capacity rising to 36,000 MT per annum post commissioning.

Management clarified on the call that the greenfield facility is expected to be located in Hyderabad, adjacent to the existing foundry at Macharam. They also disclosed that part of the capex will be directed towards machining capacity expansion that can come in earlier in a modular manner, rather than waiting for FY30.

The management team provided an indicative return framework. They said the project is expected to generate asset turns around 1.2x and once fully operational could deliver EBITDA margins of 25 percent to 28 percent. They also highlighted that working capital for this growth may be heavier, with net working capital requirement estimated at 90 to 120 days for the new setup.

The regulatory disclosure also mentioned that upon commissioning of the new facility, the existing Hosakote facility is proposed to be monetized.

Exports and execution realities

Pitti’s export revenue rose to INR 531 crore in FY26 from INR 500 crore in FY25, based on the export chart in the investor presentation. Export share, however, fell to 27 percent of total revenue from 29 percent in FY25. Management attributed Q4 export weakness to dispatch and input disruptions rather than demand conditions.

Management also reiterated that the company hedges forex fully, while commodity hedging is not required due to quarterly price revision mechanisms with customers and relatively short raw material inventory holding periods.

Balance sheet and cash flow signals

On a consolidated basis, total assets increased to INR 2,137.8 crore as of March 2026. Gross borrowings stood at INR 698.8 crore, split between non-current borrowings of INR 380.8 crore and current borrowings of INR 318.0 crore.

FY26 cash flow showed net cash from operating activities of INR 204.9 crore, down from INR 288.5 crore in FY25, primarily due to working capital consumption. Changes in working capital were negative INR 125.2 crore in FY26.

In the concall, management stated total borrowing was about INR 698 crore and average cost of borrowing around 7 percent to 7.5 percent. They also discussed an expected release of working capital and the intent that ongoing and new capex will be partly funded through internal cash and incremental net debt, with future cash generation flowing through to net debt reduction.

FY27 guidance: volume targets and revenue indication

Management provided explicit volume targets for FY27. Laminations and assemblies are targeted at 78,000 tons versus 69,517 tons in FY26. Machined components and castings are targeted around 16,000 tons versus about 12,000 tons in FY26. At current commodity prices, management said this should translate into roughly INR 2,300 crore of top line.

On margins, management indicated they expect similar margin percentages going forward, while noting that commodity prices can increase topline but compress margin percentage due to pass-through mechanisms.

Takeaways

Pitti Engineering’s FY26 numbers reflect steady topline growth and better full-year operating margin, but with quarter-level volatility caused by dispatch disruptions and foundry related constraints. The larger message from management is about capacity readiness. The ongoing H1FY27 capex program and the new INR 290 crore greenfield plan are positioned as steps to scale casting and machining capabilities for heavier, more complex applications in mining, rail, data centers and power generation.

FY27 guidance is anchored in measurable volume targets and a revenue translation based on current commodity prices. The next milestones investors will likely track are H1FY27 commissioning of the current capex, sustained recovery in export dispatch execution, and whether the planned expansion in machining and casting translates into a higher share of value-added products over time. */