Karamtara Engineering IPO

Strengths · 8

• 01Profit has more than doubled in two years, from Rs 102.65 crore in FY2024 to Rs 139.33 crore in FY2025 and Rs 228.75 crore in FY2026.
• 02Sales are large and growing fast, from Rs 2,427.12 crore in FY2024 to Rs 3,165.36 crore in FY2025 and Rs 4,316.36 crore in FY2026.
• 03EBITDA nearly doubled over the same period, from Rs 262.93 crore to Rs 498.11 crore.
• 04Backward integration is a real advantage. Its in-house galvanizing capacity of 258,000 tonnes a year is described as the largest in India's solar energy sector, and it also runs its own rolling mill furnaces.
• 05It sells a full range to the same customers, covering solar structures, fasteners and transmission hardware, which makes it easier to win repeat orders.
• 06Exports reach more than 50 countries across six continents, so it is not tied to Indian demand alone.
• 07It has a long record of about 30 years and has supplied more than 0.5 million tonnes of transmission towers globally.
• 08RoCE was 23.30% and Rs 600 crore of the issue money will repay borrowings and acceptances, which should cut interest cost.

Risks · 9

• 01The issue is priced high on earnings. At the upper band of Rs 254 the P/E is about 35.72 times on an EPS of Rs 7.11, while RoNW is only 18.15%.
• 02Borrowing has almost doubled in one year, from Rs 556.28 crore in FY2025 to Rs 1,030.13 crore in FY2026, against a net worth of Rs 1,219.40 crore.
• 03The PAT margin is not stated in the data available to us, so the profitability per rupee of sales cannot be checked from here.
• 04The number of solar customers actually fell in the latest year, from 73 in FY2025 to 65 in FY2026, even though sales grew.
• 05Demand depends heavily on government policy for solar and transmission. Changes in subsidies, local content rules or import duties can change order flow quickly.
• 06Steel and zinc are the main raw materials, and both are volatile. On fixed price export orders a sharp rise directly cuts margin.
• 07Exporting to more than 50 countries brings currency risk and exposure to anti-dumping and trade barrier action, which the solar equipment trade sees often.
• 08The wind tubular tower business is new and not yet proven, so the money and management time going into it may take a while to earn.
• 09This is a fresh issue combined with an offer for sale, and promoter holding falls from 94.79% to 83.64%.

Karamtara Engineering Limited was started in 1996. It manufactures products used in renewable energy and in power transmission lines, and positions itself as a one stop shop for these needs.

Its main products are solar mounting structures, both fixed tilt structures and tracker components, fasteners such as bolts and nuts for the solar, wind, transmission, automobile and telecom industries, and hardware fittings for overhead transmission lines. It also makes lattice towers for transmission lines with capability up to 1,200 kV, and had supplied more than 0.5 million tonnes of towers globally as on 30 September 2024. It is now entering the wind energy sector by setting up a plant for tubular towers used in wind turbines.

The company has put a lot into backward integration. It runs its own galvanizing facilities, which it says are the largest in India's solar energy sector at 258,000 tonnes a year, along with rolling mill furnaces. Doing this in house helps it control cost and delivery time rather than depending on outside job workers. As on 31 March 2026 it exported to more than 50 countries across North America, Europe, Asia, Africa, Australia and Latin America. It served 48 solar customers in FY2024, 73 in FY2025 and 65 in FY2026.

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