Intimation of proposed capacity expansion
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Samrat Forgings Ltd has announced a proposed capacity expansion at its Unit 1 forging facility in Ghollu Majra, Mohali, Punjab. The company plans to add 12,000 Metric Ton per annum of forging capacity, an approximately 80% increase over its existing capacity of 15,000 MT per annum. The expansion will require an investment of approximately Rs. 45 Crore, to be completed within 4 to 6 months, and will be funded through internal accruals and bank loans. Current capacity utilization stands at around 75%, indicating the company is approaching its production limits. The rationale cited is rising demand from both domestic and international customers.
Positive signal for shareholders as the expansion reflects strong demand visibility and growth ambitions. However, the Rs. 45 Crore outlay (partly debt-funded) may weigh on near-term margins through interest and depreciation costs before the new capacity starts contributing to revenue.