Tirupati Forge Limited (TFL) is a fully integrated manufacturer and exporter of carbon steel forged flanges and high-precision machined components. With over **15 years** of operational history, the company has evolved from a regional automotive supplier into a diversified global player. Operating from a **5-acre** state-of-the-art facility in **Hadamtala, Gujarat**, TFL is currently executing a massive strategic pivot toward high-margin sectors including **Defense, Aerospace, and Renewable Energy**. --- ### **Strategic Pivot: The Defense & Aerospace Frontier** TFL is undergoing a fundamental transformation, shifting its focus from traditional automotive forging to high-value defense manufacturing to capitalize on India’s **INR 6.8 lakh crore** defense budget and the **75%** domestic procurement mandate. * **155mm Artillery Shell Project:** The company is establishing a fully automated, robotic production line for **155mm M107 HE empty shell bodies**. * **CAPEX & Capacity:** A committed investment of **Rs. 67 Crore** will create an installed capacity of **150,000 units per annum**. * **Timeline:** Commissioning is slated for **March 2026 (Q4 FY26)**, with commercial production beginning in **Q1 FY27**. * **Financial Impact:** The defense segment targets an **EBITDA margin of >25%**, significantly higher than the current corporate average of **~14.3%**. TFL expects an **Asset Turnover Ratio of ~4x** for this unit. * **Ramp-up Target:** The company aims for **50%** capacity utilization in Q1 FY27, scaling to **100%** by the end of that fiscal year. --- ### **Manufacturing Infrastructure & Technical Capabilities** TFL operates a technology-upgraded unit with a total installed capacity of **15,000 TPA**. It is one of only three firms in India utilizing the advanced **630 Ton Lasco Press Line**. | Facility | Capacity / Specification | Key Technical Details | |:---|:---|:---| | **Forging** | **15,000 TPA** | MPM Hammers (**2.5T & 4T**); Job weights **0.5kg – 125kg** | | **Hydraulic Extrusion** | **10,000 TPA** | **630 Ton Lasco Press**; Job weights **15kg – 150kg** | | **Ring Rolling** | **15,000 TPA** | Size range: **150mm – 800mm OD** | | **Heat Treatment** | **1,000 kg/hr** | Annealing, Quenching, Hardening & Tempering | | **Machining** | **15mm – 1000mm OD** | CNC and fully automatic VMC machines | | **Drilling** | **800mm OD** | Fully automatic multi-spindle machines | | **Paint Shop** | **60 TPD** | Fully automatic dipping and drying line | --- ### **Product Portfolio & Market Diversification** The company’s portfolio is engineered to international standards (**ASTM, DIN, ANSI**) using Carbon and Stainless Steel. * **Steel Flanges:** Slip-On, Weld-Neck, Blind, and Threaded types. Sizes **0.5" to 24"**; Pressure ratings **150 to 2500 LBS**. * **Hammer Unions:** Fully assembled units (Male, Female, Nut) for heavy-duty industrial use. Sizes **1" to 6"**; Ratings **Fig 100 to Fig 1502**. * **Forged Fittings:** Elbows, Tees, and Couplings. Ratings up to **9000 LBS** for socket welds. * **Automotive & Industrial:** Crankshafts, connecting rods, and gears for the domestic and export markets. * **Market Reach:** Approximately **55%** of revenue is derived from exports to the **USA, Canada, Malaysia, Europe, and Africa**. TFL is targeting an additional **12 containers per month** in exports to generate **Rs. 36 Crore** in incremental annual revenue. --- ### **Operational Efficiency & Sustainability Initiatives** To combat rising energy costs and improve margins, TFL has integrated captive renewable energy into its industrial operations. * **Solar Power Integration:** A **4.8 MW solar power plant** (utilizing N-TopCon Bifacial technology) was commissioned in **May 2025**. * **Cost Savings:** The plant is expected to generate **0.85 crore units** annually, reducing power costs from **Rs. 10.50 to Rs. 3.50 per unit**. * **Financial Benefit:** This results in annual savings of **Rs. 5 Crore** at full utilization, insulating the company from grid tariff volatility. --- ### **Capital Structure & Expansion Funding** TFL has aggressively raised capital to fund its **Rs. 86.40 Crore** expansion plan and land acquisitions in the **Hadamtala Industrial Area**. **Recent Capital Raising Activities:** * **Preferential Allotment (Jan 2025):** Raised funds via **1.46 Crore shares** at **Rs. 32** per share. * **Convertible Warrants:** Issuance of **1.176 Crore warrants** at **Rs. 32** to fund Defense and Solar projects. * **Historical Allotment (Feb 2024):** **56.80 lakh shares** at **Rs. 12.50** to raise **Rs. 7.10 crore**. * **Authorized Capital:** Increased from **Rs. 20 Crore** to **Rs. 26.50 Crore** to facilitate ongoing growth. **Financial Health Indicators:** * **Net Debt:** Reduced to **Rs. 6.57 Crore** (from Rs. 9.08 Crore in FY23) due to improved cash balances. * **Liquidity:** Trade receivables stood at **Rs. 16.07 crore** (March 2024), with **98%** aged less than 6 months. * **Dividend Policy:** Targets a payout of **5-10% of Standalone PAT**, contingent on CAPEX requirements and market conditions. --- ### **Risk Profile & Mitigation Framework** Investors should note specific regulatory and market-based risks currently managed by the company. * **Regulatory Compliance:** In **August 2025**, the **NSE** issued a warning regarding a **2-month delay** in the lock-in of **1.10 crore warrants**, a violation of **SEBI (ICDR) Regulations**. The company is under mandate to enhance due diligence. * **Market Shifts:** The transition to **Electric Vehicles (EVs)** poses a threat to traditional automotive components, necessitating the current pivot to Defense and Renewables. * **Financial Risks:** * **Currency Risk:** Managed by forecasting **USD/EURO** cash flows. * **Commodity Risk:** TFL uses **price adjustment mechanisms** in sales contracts to pass through fluctuations in steel prices (Rounds and Billets). * **Credit Risk:** Managed via the **Expected Credit Loss (ECL)** model under **Ind AS 109**. * **Geopolitical Exposure:** While **50% of export demand** is linked to the US, the company faces **50% U.S. export duties** on certain lines, which it is mitigating by shifting the product mix toward higher-value machined parts.