Gala Precision Engineering Ltd: ₹70 Crore Order Book, But Working Capital Days Longer Than a Hindi Serial
1. At a Glance
CMP ₹797, Market Cap ₹1,013 Cr. Gala Precision is the new kid from the IPO batch of 2024, churning out disc springs, fasteners, and other technical components. Q1 FY26 revenue grew 19% YoY to ₹63 Cr, PAT was ₹6.5 Cr, and the order book sits at ~₹70 Cr. The company dreams of ₹425–450 Cr revenue capacity by FY27–28, but working capital days are stretching like Ekta Kapoor storylines.
2. Introduction
Once upon a time in 2009, Gala Precision Engineering was born, armed with springs, bolts, and the ambition to fasten itself into the global supply chain. Fast forward to 2025, it has 750+ SKUs, 175 global customers across 25 countries, and a brand-new Chennai plant to woo OEMs in renewables and industrials.
But here’s the masala:
Profit growth over 5 years = 85% CAGR.
Q1 FY26 margins = squeezed thanks to forex revaluation losses of ₹2 Cr.
Debt is almost nil, but debtor days ballooned to 109.
So, Gala is like that overachieving student: topping exams (profit CAGR) but always late in submitting assignments (working capital).
Question for you: would you back a company that’s debt-light but customer-credit-heavy?
3. Business Model – WTF Do They Even Do?
Gala makes technical springs and high-tensile fasteners. Think of it as supplying the invisible backbone of machines — the tiny parts that don’t get Instagram reels but keep turbines, cars, and equipment running.
Key products:
Disc & Strip Springs (DSS)
Coil & Spiral Springs (CSS)
High-Tensile Fasteners like studs, hex bolts, gallock wedge locks.
End-markets:
Renewable energy (wind, hydro) – ~37% order book.
Industrials (off-highway, electrical) – ~35%.
Mobility (auto & Tier-1 suppliers) – ~28%.
Their stickiness comes from validation cycles. Once an OEM approves Gala, they don’t easily switch vendors (unless you screw up, pun intended). That’s why Gala proudly flaunts “customer stickiness.”
4. Financials Overview
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue (₹ Cr)
63.1
53.2
75.3
+18.6%
-16.3%
EBITDA (₹ Cr)
9.6
10.9
12.8
-11.9%
-24.8%
PAT (₹ Cr)
6.6
6.3
10.0
+3.9%
-34.5%
EPS (₹)
5.1
6.2
7.9
-17.5%
-34.9%
Annualised EPS: ~₹21 → CMP P/E recalculated ~37.1 (screener is right this time).
Commentary: Revenue grew YoY, but QoQ drop is visible. Margins hit by forex and higher operating costs. Basically, Euro gave them gains, forex revaluation took it away.
Disclaimer: Educational purposes only, not investment advice.
6. What’s Cooking – News, Triggers, Drama
Chennai Plant: Phase-1 capex (~₹48–50 Cr) completed, production started July ’25. Target: ₹120 Cr topline by FY27–28.
Wada Expansion: More machines being added, capacity ₹270 Cr+.
US Tariffs: Import duty on fasteners & disc springs hiked from 5.5% → 25%. Gala says customers will absorb costs, but who knows what “Trump card” may come.
Seat Retractor Springs: Testing with Tier-1 OEM ongoing. Market size ~₹20 Cr domestic, 5–7x globally. If approved, Gala will have bragging rights vs. German peer Kern-Lieber.
