Lalbaba Engineering IPO

Strengths · 7

• 01Revenue from operations rose from Rs 343.30 crore in FY2023 to Rs 599.50 crore in FY2024 and Rs 771.61 crore in FY2025.
• 02Profit after tax rose from Rs 14.26 crore in FY2023 to Rs 42.44 crore in FY2025.
• 03EBITDA margin improved from 9.81% in FY2023 to 11.98% in FY2024 and 12.63% in FY2025.
• 04Return on equity was 25.19% and return on capital employed was 21.01% in FY2025.
• 05Per CRISIL, the company is India's largest maker of cold-finished tubes by installed capacity among key players, with 85,000 MTPA at Haldia.
• 06Rail systems made 45.19% and tubular solutions 41.38% of FY2025 revenue, so the company is not tied to one product line.
• 07Net worth grew from Rs 78.37 crore on 31 March 2023 to Rs 181.63 crore on 31 March 2025.

Risks · 10

• 01The railway sector gave 62.96% of FY2025 revenue and Indian Railways and associated entities gave 23.18%, so a cut in rail spending would hit the company directly.
• 02The top 10 customers gave 41.92% of FY2025 revenue, up from 37.06% in FY2024.
• 03Cash from operations was Rs 13.67 crore in FY2025 against a profit after tax of Rs 42.44 crore, and the cash conversion cycle lengthened from 57 days in FY2023 to 82 days in FY2025.
• 04Total borrowing was Rs 264.72 crore on 31 March 2025 against a net worth of Rs 181.63 crore, and net debt to equity was 1.41x.
• 05All three plants are in West Bengal, so a disruption in the state would affect the whole business.
• 06The largest supplier gave 31.29% of raw material purchases in FY2025 and the top 10 suppliers gave 69.83%. There are no long-term supply agreements.
• 07Rs 370.00 crore of the Rs 1,000.00 crore offer is an offer for sale, and that money goes to the promoters and a promoter group HUF, not to the company.
• 08General corporate purposes is not yet fixed and can be up to 25% of the gross proceeds.
• 09Employee attrition outside labour was 35.73% in FY2025 and 49.32% in FY2024.
• 10The company discloses instances of past incorrect or delayed regulatory filings and discrepancies in past corporate records.

Lalbaba Engineering Limited is an engineering solutions company based in West Bengal. It develops and makes high-performance steel tubes without weld joints, precision forgings and integrated rail systems. Its registered office and Haldia plant are at Kashberia, Bardhanyaghata Debhog, Haldia, and the corporate office is in Kolkata. The company was incorporated in 2006 and changed its name to Lalbaba Engineering Limited in 2025.

As of 31 August 2025, the company ranks as India's largest manufacturer of cold-finished tubes and the second-largest overall for cold-finished steel tubes, by installed capacity among key players, according to the CRISIL report commissioned by the company. Its products serve railways, automotive, energy and industrial infrastructure.

The customers are wagon builders, rail system integrators, automotive Tier 1 manufacturers and public sector undertakings. Tubular solutions made 41.38% of revenue from operations in FY2025 and rail systems made 45.19%. The railway sector as a whole gave 62.96% of revenue in FY2025, against 32.77% in FY2023. Indian Railways and its associated entities gave 23.18% of revenue in FY2025.

The company runs three manufacturing facilities: Haldia, Ghusuri in Howrah, and Uluberia. All of them are in West Bengal. The Haldia plant has an installed cold-finished tube capacity of 85,000 MTPA. The company plans to add 150,000 MTPA there, which would take capacity to 235,000 MTPA.

As at 31 March 2025, the company had 1,366 employees, of whom 613 were employees other than skilled and unskilled labour and 753 were skilled and unskilled labour. The company also has associates and joint ventures, including Indodeutsche Precision Tubes Private Limited and DTL Lalbaba Rail Engg LLP.

The industry

The CRISIL report says India's cold-finished steel tube market was about 3.0 million MT in Fiscal 2025 and is expected to reach 4.1-4.6 million MT by Fiscal 2030. Cold-finished tubes are about 20-25% of India's steel tube market. The forging industry was about 1.71 million MT in Fiscal 2025 and is projected to grow at 12-15% over the next seven years. The National Rail Plan 2030 envisages capital expenditure of USD 107 billion between 2026 and 2031, and rolling stock demand is expected to rise to about 520,000 in Fiscal 2030.

Customer concentration: Top 10 customers gave 41.92% of FY2025 revenue (37.06% in FY2024 and 37.03% in FY2023). The largest raw material supplier gave 31.29% of purchases in FY2025.