Gala Precision (GALAPREC) Q2 FY27 Profit Rises 26% as Order Book Crosses ₹100 Crore
The precision components maker saw revenue jump 31% YoY, but a higher tax rate kept net profit growth in check.
Gala Precision Engineering reported a 31.3% rise in Q2 FY27 revenue to ₹93.74 crore, with profit up 26.1% to ₹10.58 crore. A record order book signals strong demand, though profitability was tempered by increased tax and depreciation costs.
For a precision components maker, growth hinges on winning new orders and ramping up new facilities. Gala Precision Engineering delivered on both fronts in the September quarter, posting its strongest revenue jump in five quarters. The top-line surge of 31% year-on-year was powered by a milestone: quarterly order booking crossed ₹100 crore for the first time, rising 44% from a year ago.
The company reported revenue of ₹93.74 crore and a net profit of ₹10.58 crore for Q2 FY27. Profit grew 26% from last year, though it trailed revenue growth. Sequentially, both sales and profit rebounded sharply from a softer Q1.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 93.74YoY +31% | 75.38 | 71.41 |
| Profit (₹ Cr) | 10.58YoY +26% | 8.19 | 8.39 |
| Net Profit Margin | 11.3%YoY -3.4% | 10.9% | 11.7% |
Why Profit Lagged Behind Sales
While operating leverage improved, with EBITDA margin up 135 basis points YoY to 16.76%, net profit margin slipped 40 basis points. The gap was driven by a near-doubling of the tax outlay, as noted by Pokharna Research. The effective tax rate rose to 18.7% from 12.2% a year earlier.
Higher depreciation, up 45% year-on-year due to new capital expenditure, and a 30% rise in employee costs for overseas market development also weighed. Management told AlphaStreet the employee cost increase was for hiring in Europe and the US.
The Demand Engine Is Running
The record order book provides clear visibility. Management said growth stems from three equal pillars: organic expansion, new components for existing customers, and entirely new clients. The renewable energy sector, led by wind, contributed 42% of first-half revenue.
Product approvals in railway safety and offshore wind represent a pipeline with an estimated ₹100 crore annual potential. The new Chennai fastener plant, now running near its Phase-1 capacity, is a key growth driver and contributed significantly to the quarter's sales jump.
Guidance and the Path Ahead
Management reaffirmed its full-year sales growth target of 25% and an EBITDA margin goal of 17-19%. The next phase of capacity expansion in Chennai is on track for Q4 FY27. With overall utilization around 85%, the company is investing to debottleneck operations and meet sustained demand.
Key Points
- Quarterly order booking grew 44% year-on-year, surpassing ₹100 crore for the first time.
- Net profit margin contracted slightly due to a higher effective tax rate and increased depreciation.
- Growth is broad-based, led by the renewable energy sector and ramp-up of the new Chennai plant.
- Management maintains its FY27 guidance of 25% revenue growth and 17-19% EBITDA margin.
Hexa Perspective
The quarter confirms Gala Precision is in a strong demand cycle, with order conversion driving a sharp sequential recovery. The margin story is mixed: operating efficiency is improving, but net profitability is being recalibrated by a normalized tax burden and the cost of new capacity.
The investment case now hinges on execution. The company must successfully ramp its Phase-2 expansion and convert its ₹100 crore development pipeline into firm orders, all while managing the cost inflation from its global hiring push. The guidance suggests confidence, but the margin walk from 16.8% to the target band will be closely watched.
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