Gala Precision Engineering: Shares Skyrocket 180% Over IPO Price in 4 Months

On December 27, Gala Precision Engineering share price hit a new high of ₹1,480.80, up 9% in intraday trading on the BSE. Over the last 3 days, the stock has gained 35%, and it has surged 180% from its IPO price of ₹529 since its debut on September 9, 2024.

About Gala Precision Engineering

GPEL is a leading manufacturer of special fastening solutions (SFS) and precision springs. Its product range includes high-tensile fasteners, nuts, bolts, wedge lock washers, and various types of springs such as disc, strip, coil, and spiral springs. With over 750 stock-keeping units (SKUs), the company caters to original equipment manufacturers (OEMs), Tier 1 suppliers, and channel partners in renewable energy, automotive, railways, infrastructure, and general engineering sectors.

Strong Customer Base

GPEL’s customers include top companies like Vestas Wind Technology India, L&T Electrical & Automation, Schneider Electric, and Brembo Brake India. The company ensures high-quality products that meet stringent specifications, along with reliable supply chains. It also collaborates with German and Indian institutions for new product development.

Production Capacity and Revenue Contribution

• Disc and Strip Springs (DSS): Installed capacity of 225.5 million units, with 85% utilisation, contributing 59.5% to FY24 revenue.
• Coil and Spiral Springs (CSS): Installed capacity of 20.9 million units, with 78% utilisation, contributing 20% to FY24 revenue.

Growth Drivers

1. Automotive and Railways: Increased use of coil springs in vehicle suspensions and investments in metro and high-speed rail systems have fueled demand for precision components.
2. Renewable Energy: The growing focus on wind, solar, and hydro energy is driving demand for fasteners used in turbines and infrastructure projects.
3. Infrastructure Modernization: Governments worldwide are replacing old infrastructure, boosting the need for advanced fastening solutions.

Financial Performance

In H1FY25, GPEL reported:

• Profit After Tax: ₹11.7 crore, up 17% YoY.
• Revenue: ₹104.4 crore, up 9.1% YoY.
• EBITDA Margin: Improved by 84 basis points to 19.4%.

From FY22 to FY24, the company achieved an 18% compound annual growth rate (CAGR) in revenue and a 57% CAGR in profit before tax, reflecting strong financial health and operational efficiency.

Future Prospects

Strategic investments in new facilities in Maharashtra and Tamil Nadu have boosted GPEL’s production capacity and export capabilities. The company’s focus on in-house design and technological advancements provides a competitive edge. With plans to expand its product range and market reach, GPEL is well-positioned to capitalise on growth opportunities in domestic and international markets.

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