Kranti Industries Ltd (BSE: 542459) Q3 2026 Earnings Call dated Feb. 17, 2026
Corporate Participants:
Sumit Subhash Vora — Promoter and Whole Time Director
Sachin Vora — Promoter, Chairman & Managing Director
Analysts:
Abhijit Rao — Analyst
Himanshu Sharma — Analyst
Majid Ahmed — Analyst
Presentation:
Operator
Ladies and Gentlemen, good evening and welcome to Kranti Industries Limited Q3 and 9M FY ’26 Earnings Conference Call. We have with us today, from the management, Mr. Sachin Subhash Vora, Promoter, Chairman and Managing Director; Mr. Sumit Subhash Vora, Promoter and Whole-Time Director; Ms. Sampada Barsawade, Company Secretary and Compliance Officer.
[Operator Instructions]
Before we proceed with this call, I would like to take this opportunity to remind everyone about the disclaimer related to this conference call. Today’s discussion may be forward-looking in nature, based on management’s current beliefs and expectations. It must be viewed in conjunction with the risks that our business faces that could cause our future results, performance or achievements to differ significantly from what may be expressed or implied by such forward-looking statements.
I now hand the conference over to Mr. Sumit Vora for his opening remarks. Thank you, and over to you, sir.
Sumit Subhash Vora — Promoter and Whole Time Director
Thank you. Good evening, everyone. I am happy to welcome you all to the Q3 FY ’26 earnings call of Kranti Industries Limited. We truly value this opportunity to engage directly with our shareholders, analysts and well-wishers and I thank you all for joining us today. I trust you have already had the chance to go through our financial results, investor presentations and press release, which are available on the BSE website as well as on the company website.
We will discuss our performance, momentum and strategic progress during the quarter. A few businesses highlight I would like to put on. During the quarter, we marked a significant strategic milestone with our formal entry into defense manufacturing segment. We secured multiple purchase orders from Armoured Vehicles Nigam Limited, including mandates from its Machine Tool Prototype Factory and Heavy Vehicles Factory. The aggregate of these orders stands to approximately INR204 lakhs.
These orders involve precision machining of critical components and reflect our technical capabilities, process discipline and adherence to stringent quality standards required for defense applications. This development also represents an important diversification step for the company. Entry into defense manufacturing enhances our long-term order visibility and strengthens our position in mission-critical engineering programs. It also aligns with the government’s focus on indigenization and domestic defense production, providing us access to a structurally growing segment with higher entry barriers with better margin potential.
Additionally, we also commissioned our new Plant 4 facility in Jaipur, that’s commencing the commercial operations from January 1, 2026. The 35,160 square feet machining facility is equipped with advanced CNC infrastructure and scalable production capabilities. This expansion strengthens our manufacturing footprint, enhances operational flexibility and positions us to cater efficiently to increasing demand from the defense and industrial segments going forward.
On the global front, recent tariff realignments and evolving pricing discussions are clearly reshaping the supply. While direct exposure to tariff-impacted geographies remains limited, these developments are encouraging global OEMs to diversify sourcing under the China Plus One strategy. We are evaluating select export programs aligned with evolving trade landscapes. India is improving trade partnerships and competitive manufacturing ecosystem cohesion with companies like Kranti favorably to capture incremental export opportunities. We continue to closely monitor trade dynamics and remain focused on leveraging any emerging opportunities in global precision engineering supply chains.
I now hand the conference over to Mr. Sachin Vora for an update on performance of Q3 and nine months FY ’26. Thank you once again. Over to you, sir.
Sachin Vora — Promoter, Chairman & Managing Director
Good afternoon, everyone. It is my pleasure to welcome all our valued shareholders, investors and analysts to the Q3 and nine month FY ’26 earnings conference call. I sincerely appreciate your continued interest and the time you have taken out to join us today.
To give you an industry overview, the Indian economy has sustained growth momentum despite global volatility, with GDP growth remaining above 6%, supported by strong domestic consumption, sustained infrastructure spending and stable inflation trends. The manufacturing sector remains a key growth driver, benefiting from government initiatives such as Make in India, PLI schemes and increased capital expenditure across infrastructure and defense. These structural measures are strengthening India’s position as a reliable and competitive global manufacturing hub.
Within this environment, the automotive and precision engineering sector remains structurally positive. Domestic vehicle production is stable, export demand is gradually improving and capacity utilization levels are trending upwards. Additionally, the push towards the EV adoption, defense indigenization and global supply chain diversification under the China Plus One framework continues to create long-term opportunities for quality-focused precision component manufacturers. Demand for precision machine components remains supported by localization and platform upgrades. Those with strong execution capabilities, cost discipline and diversified sector exposure are well positioned to benefit from this evolving industry dynamics.
The Union Budget 2026 has further reinforced this momentum with continued emphasis on defense capital expenditure, infrastructure development, manufacturing incentives and support for our EV ecosystem. Increased allocation towards indigenous defense production and technology modernization directly benefits precision engineering companies like Kranti. This enhances medium-term demand visibility for specialized machining peers. The sustained focus on domestic manufacturing competitiveness, supply chain localization and MSME support creates a favorable operating environment, enhancing long-term demand visibility across the automotive, defense and industrial segment.
Now we go to the Q3 FY ’26 standalone financial performance. During Q3 of FY ’26, we delivered a strong performance with a total revenue of INR22.87 crores, reflecting a robust 32.2% year-on-year growth and a sequential growth of 5.8% over Q2. This growth was driven by improved execution across our core automotive and industrial segments, along with early traction from newly diversified verticals. The steady increase in revenue demonstrate the resilience for our business model and strengthening demand visibility across customer categories.
On the profitability front, EBITDA for the quarter stood at INR3.55 crores, nearly 3 times higher compared to the same period last year, with margins placed at around 15.5%. Our profit before depreciation and tax, that is PBDT, stood at INR2.96 crores, reflecting strong operating performance and improved cost absorption. Margins remained healthy despite expansion-related ramp-up costs. The overall profitability trajectory remained structurally positive.
At the bottom line level, our PAT stood to around INR74 lakhs, marking a clear continuation for our profitability recovery compared to the loss reported in Q3 in the previous year, strengthening earnings visibility into Q4. The improvement in earnings underscores the impact of operational efficiencies, better capacity utilizations, and disciplined financial management. Overall, Q3 FY ’26 reflects sustained revenue growth combined with strengthening profitability, positioning us well for the remainder of the financial year.
Nine month FY ’26 standalone financial performance. For the nine month period ended FY ’26, our total revenue stood at INR64.57 crores, reflecting a strong growth of 19.8% compared to the same period last year. This consistent revenue expansion across quarters demonstrates the stability of demand across our core segments and the benefits of our diversified customer base. The growth also reflects improved execution capabilities and gradual scaling of newly added capacities.
EBITDA for nine month FY ’26 stood at INR10.78 crores, nearly doubling compared to INR5.39 crores in the corresponding period last year. EBITDA margins expanded significantly to 16.7%, which is an improvement of 669 basis points over year-on-year. This reflects clear operating leverage as revenue scales. PBDT stood at INR9.02 crores, reflecting a 2.6 times growth over last year. This margin expansion has been driven by operating leverage, better product mix, cost optimization initiatives and improved capacity utilization across plants.
Profit after tax for the nine-month period stood at INR2.7 crores compared to the loss in the previous year, clearly indicating a structural turnaround in earnings. This reinforces the sustainability of our earnings recovery. The sustained improvement across the revenue, operating profitability and bottom line performance reinforces the strength of our execution framework. We believe this consistent performance over nine months provides strong visibility and confidence as we move into the final quarter of this financial year.
Looking ahead, while we remain mindful for global macroeconomic uncertainties and evolving trade dynamics, the domestic manufacturing outlook continues to remain constructive. The momentum in defense indigenization, infrastructure spending and industrial activity provides structural growth visibility. Our diversified presence across automotive, EV, industrial and now defense segments positions us well to benefit from these emerging opportunities while reducing cyclicality in their risks.
Our immediate focus will be stabilizing and scaling operations for our newly commissioned Plant 4 facility, improving the capacity utilization levels at Plant 4. We will continue to monitor and optimize our investment in automation, process optimization and smart manufacturing practices to enhance productivity and quality standards. At the same time, we aim to strengthen customer relationships, expand export contribution and gradually increase our participation in mission-critical and value-added programs. Financial discipline remains central to our strategy. We will maintain a balanced approach towards growth and capital allocation, ensuring that expansion is supported by sustainable cash flows and prudent leverage management.
We remain focused on maintaining prudent leverage and healthy cash flows. Our focus continues to be on margin stability, working capital efficiency and long-term value creation for our stakeholders. With a stronger operational foundation and expanding sectoral footprint, we are confident about building a resilient and scalable growth platform for the years ahead.
Thank you and I look forward for our discussion during the question-and-answer session.
Questions and Answers:
Operator
Thank you, sir. [Operator Instructions] The first question is from Mr. Abhijit Rao from BB Capital. Please go ahead, sir.
Abhijit Rao
Hello. Thank you for the opportunity. First of all, congratulations on the good set of numbers, sir.
Sachin Vora
Yeah, thank you.
Abhijit Rao
My question is on the defense order — recent defense order. So what is the revenue potential from the defense — this order by next financial year FY ’27 and how much share of the business is repetitive versus one-time qualification order? Also, the margin profile of this?
Sachin Vora
Yeah, for the defense segment, see, we were targeting this segment from last more than 12, 14 — 15 months. I will be more precise. We have participated in various tenders and various segments. Fortunately, in this last quarter, we received around 24 orders. These are all small sample development orders, which are under process. Few samples are submitted, few are under development. So that current order value what we have got is close to around INR2 crores, which will be executed in next three to four months.
In addition to this, there are another few more tenders where we have participated. The technical round of discussion, the plant visits of the team is going on. So, we are anticipating more orders inflow to come in next three, four months. If you go for FY ’27, yes, we are taking a target of at least around INR12 crores to INR15 crores business from defense segment, maybe in orders and execution that stays. So that is the target what internal we have taken. We have already targeted and penetrated into two companies for the defense manufacturing, original factories, and few companies. The visits, technical evaluation and discussions are going on.
Abhijit Rao
Okay. And sir the margins profile?
Sachin Vora
Yeah, margin profile more or less, it is definitely better than what we are doing for the automotive segment, but it’s too early to right now say because of the few things like the development cost, initial product development, that testing validation, maybe the costs are high. So, till we don’t execute few orders and few business, margin profile can — definitely it is higher, but how much it will be leveraging other costs, that we have to evaluate.
Abhijit Rao
Understood, sir. Now, moving on to this standalone gross profit has grown like 56.3% year-on-year in quarter three, which is much faster as compared to the revenue. And so, what favorable mix and efficiency strategy is adopted and how sustainable is this gross profit margin?
Sachin Vora
Regarding profitability? So two basic points is that we have improved our EBITDA margin. There are two major factors. One is the capacity utilization. The more the capacity utilization increases, our fixed cost, fixed overheads gets divided accordingly and this increases. In addition to do, we have done some process optimization, process improvement, some cost control measures. It is an ongoing continuous process on the shop floor also. So, these initiatives are taken and we were working on this from last 18, 24 months and slowly now we are able to get some good results and we are hopefully going to maintain to this level. At an optimized level, we will be stabilizing at an EBITDA level of around 16%, 17%, 18%. That is what we are targeting and we will be reaching to that EBITDA level.
Abhijit Rao
Okay. Okay, sir. Understood. Thank you, sir, and all the best.
Sachin Vora
Thank you.
Operator
Thank you, sir. [Operator Instructions] Next question is from the line of Mr. Himanshu Sharma, an individual investor, please go ahead.
Himanshu Sharma
Thank you for giving me this opportunity. Sir, I have two questions. First question is, Plant 4 at Jaipur has been commenced.
Sumit Subhash Vora
Sorry to interrupt you, I think we are getting echo from your side. Can you lean a bit closer to the mic?
Himanshu Sharma
Okay. Okay. The question is Plant 4 at Jaipur has commenced operation from 1st January ’26. So, what is the design peak revenue capacity of this plant and with what utilization do you hit plant level EBITDA breakeven and target ROC? And second question, can you quantify the fixed cost setup of the Jaipur plant in terms of rent, payroll and utility?
Sumit Subhash Vora
Okay, commencement I will answer this question and then I will hand over to Sachin for the balance answer. So, I will explain you. If you have gone through the news of Kranti, we had a — this will be completely not a greenfield project, this is a brownfield project. So, we have taken over a complete machining business from Universal Autofoundry under the MoU and entire their machine shop which was from Universal has been taken over by Kranti and now it is Kranti Industries Plant 4 from 1st of January 2026. So operationally now we are stabilizing these operations and capacity-wise, we should be somewhere about — reaching by April at around 70% to 80% utilization of the complete installed current capacity. Okay, that is good enough to answer on the capacity side. Sachin, can you take forward from here?
Sachin Vora
Yeah, see the Plant 4 operation has already commenced. The operations are done because the existing machines which were there, installed in their plant, are taken over by Kranti. So, the operations have been started. Capex — so that — there we’ll be doing the component for that single customer only. So, we will be there as good as subcontractors or vendors for them. And your point was towards the margins. I will definitely — it will be in a more or less in the same range, what we are doing over there, that is within 16% to 18% EBITDA what we are targeting.
Himanshu Sharma
And ROC as it is currently or is there any capital investment over there?
Sachin Vora
Yeah, currently the capital investment in that plant is only the installation, commissioning and preliminary expenses which are required for license. So, ROC will not be calculated on plant basis. It will be on the balance sheet side which will be the full plant, we will be working out of that. So, our capital investment there is only working capital and marginal capex related to preliminary expenses and installation and commissioning of machineries.
Operator
Thank you, sir. [Operator Instructions] The next question is from the line of Majid Ahmed from PinPoint X Capital. Please go ahead, sir.
Majid Ahmed
Am I audible, sir?
Sumit Subhash Vora
Yeah, yeah.
Majid Ahmed
Sir, I just want to understand, we are having defense of INR15 crores and any plans to get into any aerospace or any precision engineering, that segment are we planning?
Sumit Subhash Vora
Yeah. We are working on those projects as well. But as of now, nothing — we have come out of something. In fact, we have also completed audit for HAL, their vendor registration audit. So, we are in process of that but currently, as of now, nothing is concluded. So hence, we are not commenting. So, if you see, defense also, we started working around 14, 15 months back. So somewhere we have started. So, these are some long-term processes which we are working upon, but currently, we should not comment anything on this, because since we do not have any final outcome of it. We are working on that area.
Majid Ahmed
So, going forward, how are you looking to deleverage the balance sheet? Mainly, we are having around INR46 crores of debt and our cash flow is also not linear. So how are you going to manage your cash flows, working capital and reduce debt? Like, what is the strategy?
Sachin Vora
Yeah. So, leveraging the balance sheet is a tricky part in our business since our business itself is a heavy capex-driven business. But what we are targeting is, we will be balancing out our debt and equity structure. So, maybe by — we are targeting that at least by 2030 or something onwards we should be a virtual or, what we call, net debt free company. So, working on towards that with our new business opportunities’ increased capitalization, we are hopeful that in the coming maybe six to eight quarters, the ratios then will be improving drastically what we are currently in the balance sheet side. In the balance sheet side, the ratios will be improving drastically in the next maybe six to eight quarters.
Majid Ahmed
Got it. Sir. So, before the improvement in the coming six to eight quarters, are we looking for additional fundraise or any borrowings, are we looking, sir, for expansion?
Sachin Vora
Borrowing, right now, it is not there. Only the working capital funds, maybe a marginal working capital funds, we may add it with our existing financers, bankers only. This is what we may require. Yeah, definitely capex, we are right now in a better situation where we have a good amount of capex installed with the machines of that Jaipur plant coming into our pocket. That is the reason we went in that model where we have become capex-led. We have added 45 machines which are directly taken on lease from them to make it same — with the idea to leverage and reduce down our capital cost with that way only. So, no, right now, we are not planning anything. But maybe in six months, it depends on how the board decides and thinks how we move forward. But no, in the next two. three quarters, at least, no any fundraising plan is there.
Majid Ahmed
Sir, also I want to also understand, especially in your defense part, so how are you looking to scale up and what is our — the right to win to exponentially scale this business in two to three years? Like, how are we positioning ourselves as a company?
Sachin Vora
So, we are in the way of scaling up. Say, if you see last, for 2025 to 2026, we are right now growing at a rate of around 20%. We expect that in the next at least two years, the same ratio will be continuing. So that is [Indecipherable] up by the addition of new business also, new products also as well as setting up a new plant and addition to the capacity also. So at least next two years, we have that visibility that at the same rate, what we have grown from 2025 to 2026, we will be growing to in 26 — to ’27 and ’28. That is what we are targeting and we are pretty much confident we will be on that track, maybe plus or minus margin.
Majid Ahmed
Sir, finally, I just want to understand, as of your presentation, you have mentioned, of the segmented revenue, majority are coming from tractor business. Do you see any kind of cyclicality or anything, sir? How do you see this in terms of margin pressure, anything, tractors…
Sumit Subhash Vora
No. See, the tractor industry is a growing industry and this will remain as a growing industry for the next two years. And if you have gone through the other, I do not know — this industry will be growing in domestic as well as export market for the next two to three years with the need of basic — since food is one of the basic necessity. Secondly, farming automation is one thing which currently India lags far behind than — as compared to any European and U.S. farm sector. So, this is one area where we feel that, this is again, where this industry is going to grow at least at two digits for next year and around 8% to 9% again next to next year. That is what the prediction says.
Secondly, even if we are in a tractor industry, if you see the split of our tractor industry, we are into multiple customers and multiple product zones. So, we are into a lower HP tractors and higher HP and also in medium HP. So, these combinations help us to diversify our product range within that one segment as well. And then with agriculture now, we have also started concentrating on agri implements like harvesters and balers, which are the part of agri implements, which is growing market further again. So, these are industries which are always going to grow for next tow to three years without any variation.
Majid Ahmed
Got it, sir. All the very best, thank you.
Operator
Thank you, sir. [Operator Instructions] I believe there are no more questions, sir. I hand over the floor to the management for the closing remarks.
Sachin Vora
Yeah. Thank you. I would like to extend my sincere gratitude to our Board of Directors for their guidance, our employees for their dedication, our customers for their trust, and our shareholders for their unwavering support. We remain committed to consistent execution and transparent communication. Thank you very much all of you for joining this call.
Sumit Subhash Vora
Thank you very much. Thank you.
Operator
[Operator Closing Remarks]