National Fittings Limited is currently undergoing a fundamental strategic pivot. Following decades of operation under its founding promoters, the company has entered a new era of leadership and geographic focus. * **Change in Promoter Control (2025-2026):** **Himgiri Castings Private Limited** (the Acquirer) acquired a **34.04%** stake (**3,092,093 shares**) from the erstwhile promoter, **Mr. A.V. Palaniswamy**, at **₹130** per share. Following this, a mandatory **Open Offer** was launched in September 2025 to acquire an additional **26%** of the voting capital at **₹135** per share, representing a total consideration of **₹31.88 crore**. * **New Leadership:** The incoming promoters bring over **40 years** of specialized experience in pipe fittings casting. **Mr. Jayaram Govindarajan** assumed the role of **Managing Director** on July 24, 2024, for a five-year term. * **Geographic Relocation:** In a major administrative shift, shareholders approved moving the **Registered Office** from Tamil Nadu to **Halol, Gujarat** in February 2026. This aligns with the company’s new expansion into the Western Indian industrial corridor. --- ### **Manufacturing Footprint & Asset Optimization** The company has executed a "Counter-Cyclical" strategy, aggressively consolidating its manufacturing base to eliminate redundancies and unlock capital for modernization. | Division | Location | Status & Recent Strategic Actions | | :--- | :--- | :--- | | **Vedasandur Foundry** | Dindigul, TN | **Active.** Now serves as the consolidated hub for all foundry operations. | | **Kaniyur Finishing** | Coimbatore, TN | **Active.** Primary facility for finishing and assembly. | | **Mudhela Unit** | Vadodara, GJ | **New Expansion.** Approved in Jan 2026 for Iron Cast Fittings and assembly. | | **Thekkalur Unit** | Tirupur, TN | **Sold (April 2024)** to Sandfits Foundries for **₹28.00 crore**. | | **Dindigul Foundry** | Dindigul, TN | **Shutdown (June 2024).** Land and buildings sold in Jan 2025 for **₹13.50 crore**. | **Strategic Rationale:** The total divestment proceeds of **₹41.50 crore** are being redeployed into upgrading testing facilities to international standards and funding the Gujarat expansion. Management maintains that these disposals will not disrupt revenue, as production has been absorbed by the Vedasandur hub and supplemented by strategic third-party agreements. --- ### **Product Portfolio & Market Positioning** National Fittings operates in a single business segment—**Manufacturing of Pipe Fittings**—but maintains a diversified product mix catering to both industrial and non-industrial applications: * **Core Products:** SG Iron Grooved Couplings & Fittings, Screwed Pipe Fittings, and Stainless Steel Threaded Fittings. * **Expansion Categories:** The company is aggressively introducing a new line of **Valves** (including Ball Valves) and **Innovative Pumps**, utilizing newly acquired designs, drawings, and toolings. * **Competitive Moat:** To counter severe competition from **Chinese manufacturers**, the company has pivoted toward **large-size fittings**, a niche where competitors are less active and margins are higher. * **Domestic Strategy:** Leveraging the **"Make in India"** initiative to gain preference with infrastructure project consultants and domestic distributors. --- ### **Supply Chain & Operational Integration** To ensure production continuity following the sale of older units, the company has secured its supply chain through long-term strategic partnerships: * **Banil Casting Agreement:** Approved in February 2026, National Fittings provides specialized equipment to Banil Casting to exclusively produce iron castings. Production is set to increase by **160 MT** starting April 2026, targeting a total of **400 MT per month**. * **Avisa Private Limited:** A lease agreement was signed in January 2026 for **7.75 lakh square feet** of land to support expanding operations. * **Energy & Sustainability:** The company is modernizing its infrastructure by replacing aging furnaces with **power-saving units** and increasing the procurement of **renewable energy**. --- ### **Financial Performance & Capital Structure** The fiscal year **2024-25** marked a period of exceptional profitability, largely driven by asset monetization and improved export realizations. **Financial Summary (Values in Rs. Lacs)** | Parameter | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Total Income** | **8,109.95** | **7,801.56** | **8,748.82** | | **Profit Before Tax (PBT)** | **2,623.56** | **802.45** | **656.67** | | **Net Profit (PAT)** | **2,330.34** | **584.19** | **439.03** | | **Earnings Per Share (EPS)** | **₹25.66** | **₹6.43** | - | | **Net Worth** | **8,097.58** | **5,934.82** | **5,494.72** | | **Return on Equity (ROE)** | **28.78%** | **8.6%** | - | * **Profitability Drivers:** PBT grew by **284%** in FY25, primarily due to the **₹41.50 crore** realized from asset sales (recorded as exceptional items). Underlying export realizations improved by **5-7%** due to a shift toward higher-value, larger-sized products. * **Debt Profile:** Net Debt was reduced to **₹1,541 lacs** (from **₹2,123 lacs**). Working capital limits are secured through **Bank of India** via hypothecation of stocks and machinery. * **Shareholder Returns:** The Board recommended a dividend of **₹1.00 per share** (10% of face value) for FY25, following a **₹1.50** dividend in FY23. --- ### **Risk Profile & Mitigation** Investors should monitor several key risk factors associated with the company’s export-heavy model and regulatory history: * **Foreign Exchange Exposure:** With foreign exchange inflows of **₹55.44 crore** (FY24), the company has significant **USD** exposure. Currently, the company **does not hedge** using derivatives, relying instead on natural hedges and domestic market growth. * **Geopolitical Logistics:** Conflicts in the Middle East impact shipping timelines. The company mitigates this by maintaining **higher buffer stocks** in its distribution channels. * **Labor Dynamics:** The company faces a shortage of skilled labor and relies on **expat-dependent** unskilled labor. It is responding by increasing **mechanization** and sub-contracting. * **Regulatory Compliance:** The company has a history of technical non-compliance with **SEBI (LODR)** regulations, resulting in penalties totaling over **₹5.3 lakh** since 2018. Recent issues in 2025 included delays in **Regulation 30** filings and committee constitutions. * **Labour Codes:** Management has assessed the **New Labour Codes (2020)** and expects no significant financial impact, as existing policies are largely aligned with the draft codes.