1. At a Glance – The “Sharpened Blade or Hidden Crack?” Story
This company is like that quiet guy in class who scores 90%… but owes money to half the tuition center.
On one side, you’ve got a 25% ROCE, 20%+ margins, solid industrial demand, exports to 32+ countries, and backing from Shapoorji Pallonji. Sounds like a dream industrial compounder, right?
But then… BAM.
94.4% promoter pledge.
Not 20%. Not 50%. A jaw-dropping 94% of promoter holding pledged
That’s not “confidence with leverage” — that’s “bhai collateral khatam ho gaya kya?”
Add to that:
- Profit growth: -12% (TTM)
- Quarterly PAT decline: -24.9% YoY
- Stock down ~30% in 1 year
So what do we have here?
A high-quality engineering business… sitting inside a slightly risky capital structure.
It’s like owning a Ferrari… but the bank technically owns the engine.
Now the real question is —
Is this a temporary funding issue… or a structural risk waiting to explode?
2. Introduction – From Legacy to Demerger Drama
This isn’t some random SME IPO trying to sell dreams.
This business traces its roots back to Forbes engineering legacy (since 1767) — yes, older than most Indian companies and probably older than your CA’s patience.
The modern avatar, however, is fresh:
- Incorporated: 2022
- Demerger from Forbes & Company: March 2024 operational
Classic Indian corporate move:
Step 1: Build business
Step 2: Separate business
Step 3: Unlock value
Step 4: Confuse investors
Now, after demerger, Forbes Precision is a pure-play precision tools company.
But here’s where things get spicy:
- Revenue barely grew: ₹228 Cr → ₹233 Cr (FY24 to FY25)
- EBITDA stagnant
- Profit slightly declining
So post-demerger “value unlocking”… is still waiting for the “value” part.
Let me ask you:
Did they unlock value… or just unlock a new ticker symbol?
3. Business Model – WTF Do They Even Do?
Okay, let’s simplify.
This company sells tools that make other companies’ tools.
Think:
- Threading tools (nuts, bolts, screws)
- Drilling tools
- Milling cutters
- Deburring tools
Basically, if India is “manufacturing”, these guys are supplying the sharp things that make manufacturing possible.
Their key brands:
- TOTEM (main hero)
- BBBB (yes, that’s actually the name)
- Forbes Kendo
Customer industries:
- Aerospace
- Defense
- Auto components
- Oil & gas
- Infrastructure
Translation:
If something spins, cuts, or drills… they are somewhere in the supply chain.
Plus:
- 1500+ distributors
- Exports to 30+ countries
- Strong OEM presence
This is not a “hope story.”
This is a boring, predictable, industrial backbone business.
And boring businesses often make the best money.
But…
If
