### **Overview** Kalyani Forge Limited (NSE: KALYANIFRG, BSE: 513509) is a leading Indian manufacturer of high-performance forged and machined components, established in **1978/1979** and founded by **Dr. Neelkanth Kalyani**. Headquartered in **Pune, Maharashtra**, the company operates five integrated manufacturing plants within a 1-km radius in Koregaon Bhima and Sanaswadi. With over **1,000 employees** and nearly **50 years of industry experience**, Kalyani Forge is recognized for its technological leadership, innovation, and deep OEM relationships across automotive and industrial sectors. --- ### **Core Business & Product Portfolio** Kalyani Forge specializes in three primary product groups: 1. **Engine Components**: - Signature product: **Connecting rods** (~70% of total sales), including India’s first **fracture-split connecting rod** developed in-house (2004). - Other products: Crankshafts, camshafts, rocker arms. - Developed **BS-VI/Euro-6 compliant connecting rods**; supplies for **EV platforms (xEV)**. 2. **Driveline Components**: - Includes **tulips, yoke shafts, tripods, outer/inner races, double yokes**. - Second-largest product segment; key for CVs and passenger vehicles. - Warm and cold forged parts with value-added processes like **spline rolling, induction hardening, and broaching**. 3. **Axle Components**: - Includes **wheel hubs, steering knuckles, stub axles, and double yokes**. - Fastest-growing segment; strategic focus area. - Enabled by new **4,000-ton forging press** (commissioned FY25), expanding forging weight capacity from 10kg to 25kg. Additional offerings include components for **industrial, agro, turbocharger, marine, and railway** applications. The company serves **five key segments**: Passenger Cars, Trucks/Commercial Vehicles, Industrial, Agro, and Turbochargers. --- ### **Market Position & Diversification Strategy** - **Approximately 40–50 active customers**, including global Tier-1s and OEMs. - Business mix: ~60% automotive (trucks and passenger vehicles), ~40% non-automotive (industrial, agro, turbo). - **Diversified model** acts as a hedge against market cyclicality. - Leverages **automotive-grade precision and certifications** (IATF 16949:2016, ISO 9001:2015) to compete in industrial and agro segments. - Gaining traction in **marine** (ABS, Bureau Veritas-certified forgings) and evaluating **railway** and **defense** opportunities. The company has exited non-core, low-margin businesses and refocused on high-value, core segments. It is strategically positioned to benefit from **“China plus one”** sourcing trends, with growing interest from **S&P 500 companies**. --- ### **Technological Leadership & Innovation** - Pioneer in India in: - **Fracture-split connecting rod technology** (2004, under Mrs. Rohini Kalyani’s leadership). - **India’s first warm forging facility**. - **BS-VI/Euro-6 compliant connecting rods** (2015). - Established **Precision Autocomp Division (PAD)** in 2003 to supply **fully machined, ready-to-assemble** components. - **Kalyani Studio** (founded 2016): In-house technology arm driving **digital transformation** (Digital Shopfloor Project), automation, and R&D. - Strong **in-house R&D** with design, prototyping, testing, and validation capabilities. **Advanced Processes Adopted**: - Spline rolling, induction hardening, water-based lubrication, bell forging with negative tracks. - Full automation planned for connecting rod lines. - SMED (Single Minute Exchange of Dies) R&D to improve flexibility. --- ### **Growth & Strategic Initiatives** #### **1. Growth Pillars** Kalyani Forge’s strategy is built on three pillars: - **Strong Execution** (lean manufacturing, digitization, cost control) - **Business Development** (long-term OEM programs, market share expansion) - **Capital Expenditure Discipline** (linked to business wins, ROCE-driven) #### **2. Revenue Growth & Order Wins** - Secured **record order book** of **₹384 crores in H1 FY25** (~₹63 crores peak annual revenue). - Additional new business worth **₹115 crores** in FY25; another **₹5–10 crores** in recent wins. - Most programs have **5–10 year lifecycles**, with ramp-up in 1–2 years. - Reacquired major business previously lost to competitors; recaptured market share. #### **3. Expansion & Capacity** - Invested **₹24.4 crores in FY25 CapEx**, with **₹25 crores planned for FY26**. - Major projects: - **4,000-ton forging press** (for heavy CV and industrial forgings) commissioned in FY25. - **Machining expansion** (Phase 1 completed; Phase 2 underway for driveline/axle). - Modernization of **1,600-ton press** and utilities systems. - Utilizes **<25%** of its **large land bank** in Sanaswadi — room for future growth or monetization. #### **4. Export Strategy** - Target: **50% of revenue from exports** (medium to long-term). - Exports reached **21% of sales in Q1 FY26**, up 25% QoQ. - Key markets: **Europe, US, Japan, Thailand**. - Strategy shifted to **high-volume, high-value export programs** over niche, low-volume. #### **5. EV & Future-Readiness** - Actively involved in **xEV development programs** with Indian OEMs. - Growing focus on **driveline and axle components for electric vehicles**. - Portfolio designed to be **EV-agnostic**; ICE components remain resilient in trucks, industrial, and agro segments (supported by flex fuel, hydrogen). - Aims to be the **“Last Man Standing” in ICE components** while building EV capabilities. --- ### **Financial & Operational Highlights** - **Machined connecting rod business**: ₹80+ crores revenue in FY24 (~35% of total sales), highly profitable. - **Industrial segment revenue**: Grew from ₹23 crore to ₹60 crore in FY24 due to new programs in gen sets. - **Agro segment**: Temporary decline (₹35 crore → ₹18 crore), but strategic refocus underway. - Despite Q3 revenue dip to ₹59 crore (post-festive inventory correction), maintained **EBITDA at 11.5% (₹6.83 cr)** and **PAT up YoY to ₹1.82 cr**. - Focus on **margin expansion** via: - Improved product mix - Cost reduction (supplier consolidation, procurement efficiency) - Higher value addition (in-house machining, sub-assembly potential) --- ### **Sustainability & Operational Excellence** - **Rooftop solar project** commissioned at Sanaswadi site — covers ~40% of power needs, reducing costs and carbon footprint. - **Utilities modernization initiative** to improve OEE and energy efficiency. - **Lean manufacturing principles** applied: 50% shop floor space freed by redesigning machining lines. - **Digital Shopfloor Project** — digitizes machine, quality, and inspection data for real-time decision-making.