IPO

Hy-Tech Engineers, promoted by Hemant Tukaram Mondkar, a technocrat, is an engineering company engaged in the design, manufacture and supply of hydraulic fittings catering to diverse industrial applications, with over four decades of operational experience in the hydraulics industry. Its product portfolio comprises standard hydraulic fittings viz. DIN-metric fittings, JIC flared and flareless fittings, O-Ring Face Seal (ORFS) fittings and conversion fittings, as well as fittings customized to customer specifications.

Product portfolio of the company as of March 31, 2026, consists of more than 11,000 stock keeping units (SKUs) of hydraulic fittings. It also have the capability to develop application-specific fittings tailored to customer specifications and applicable industry standards, with 880 new SKUs in FY2026, 1,676 in FY2025, and 2,206 in FY2024.

The company caters to diverse application needs across industries such as construction machinery, automotive, farming machinery, injection moulding machines and hydraulic systems. In addition, it has obtained certification which enables it to cater to sectors such as railways and defence, thereby expanding its addressable market. Of FY26 sales from operations, the contribution from construction machinery was 22.94%, farming 22.83%, automotive 9.05%, injection moulding machines 3.98%, hydraulic systems 5.09%, parking systems 0.29%, IPE & Railways 1.45% and others 34.37%.

Its direct sales to OEMs and other industrial users allow it to customize solutions and build enduring relationships;its distributors also enable access to smaller and mid-sized industrial customers across domestic and overseas markets. It served 170 direct customers in FY2026, as compared to 152 direct customers in FY 2025, and 144 in FY2024, while the number of distributors and distribution partners has grown from 5 in FY2024 to 7 in FY 2026. This dual-channel approach provides access to diverse customer segments and reduces dependence on any single sales channel or industry vertical.

Supported by a product portfolio of over 11000 SKUs, its operations span both domestic and international markets. During the last three fiscals, it have exported hydraulic fittings to eleven countries including the USA, Belgium, Poland, Russia, Brazil, Italy, Saudi Arabia, Hungary, UAE, Thailand and Germany. It also has engaged with a non-exclusive distribution partner in Europe who is not directly involved in customer acquisition but primarily provides post-sale services, local coordination and logistics support.

In the domestic market, its network covered four states in India between FY2024 and FY 2026, enabling it to serve a broad customer base across industries. In FY26 revenue from operations, sales from domestic accounted for about 70.63% (71.70% in FY25) and balance 29.37% (28.30% in FY25) from overseas. Further, the overseas sales is also spread across various countries with USA accounting 21.42%, Belgium 6.14%, Poland 1.22%, Russia 0.13%, Brazil 0.34%, Italy 0.08% and UAE 0.02%. Of the FY26 revenue from operation the sales through direct sales to customers was 88.42% [Domestic 62.60%; Overseas 25.82%] and sales through distributors was 11.58% [Domestic 8.03%; overseas 3.54%].

Currently, the company has six operational manufacturing facilities in India, out of which four are located in the state of Maharashtra and the other two in the state of Madhya Pradesh. Amongst these, one unit at Nashik, Maharashtra is dedicated solely for forging, while the remaining five Manufacturing Facilities are focused on manufacturing of hydraulic fittings.The forged products manufactured at Nashik Unit are largely utilized for captive consumption and support its backward integration objectives. As of March 31, 2026, it has a total installed capacity of forging capacity of 3,120.00 tpa at its Nashik unit and a manufacturing capacity of 483.00 lakhs pieces per annum of hydraulic fittings across all its other facilities.

As part of broader strategy to expand its product portfolio, the company is evaluating opportunities to diversify into valve segment through both organic initiatives and inorganic avenues. Valves represent a logical extension of its current offerings, catering to similar end-use industries such as construction equipment, agriculture, industrial machinery, and hydraulic systems. Hydraulic valves support the hydraulic systems by starting, stopping, and directing the flow of hydraulic fluids and are made of spools or poppets.

Hy-Tech USA Inc., a promoter group member is engaged in a line of business similar to the company. Hy-Tech USA Inc, acts as an exclusive distributor for sale of all hydraulic fittings and related equipment manufactured by the company, including OEMs, in North America, Canada and Brazil. Hy-Tech USA Inc. sources customers including OEMs, for company's products. Additionally, it purchases certain products of the company for local distribution in order to maintain supply chain efficiency. In FY26 and FY25 direct sales to Hy-Tech USA Inc., accounted for 3.54% and 3.04% of revenue from operations, respectively.

The issue and objects of the issue

The offer comprises fresh issue by the company as well as offer for sale by the selling shareholders. The fresh issue comprises issue of new equity shares of Rs 5 each aggregating to Rs 60 crore and the offer for sale comprise sale of 14289450 equity shares of Rs 5 each. The entire offer for sale is by promoters.

Of the net proceeds from fresh issue the company will utilize Rs 16 crore towards repayment of certain outstanding borrowings availed by the company, Rs 29.966 crore towards funding capital expenditure requirement of the company for expansion at Kavathe Unit, Shirwal Unit and Pithampur Unit I. The balance is towards general corporate purposes.Post-expansion, the estimated installed capacity at Shirwal, Pithampur Unit-I and Kavathe is expected to increase by 45.00%, 83.08% and 41.25 % respectively, subject to timely commissioning.

Total borrowing as end of Jun 30, 2026 stood at Rs 40.776 crore.

Strength

Integrated operations and product development capabilities. Nashik unit of the company offers it with backward integration capabilities that provide it competitive advantages including reduced reliance on external suppliers, cost efficiency, lead time reduction, and enhanced quality control.

Diversified customer base with wide market reach.

Established global presence with access to growing international markets.

Decentralised cell-based manufacturing model followed by the company enables it to maintain accountability, and customer focus. Under this structure, it operations are organized into smaller, self-contained cells, with certain cells aligned to specific customer requirements or product categories.

Weakness

Top 1/10 customers contributed to 9.34%/45.32% and 7.82%/42.02% of its revenue from operations in the FY 2026 and FY2025, respectively.

Significantly over 50% of revenue comes from construction equipment, farming and automotive sector any slowdown in end used industries may hit the performance of the company.

Significant portion of its domestic revenues are derived from the western (52.28% in FY26) and central zones (19.75% in FY26) and any adverse developments in this market could adversely affect business.

Extend credit to certain of its related parties i.e., Hy-Tech Fluid Power Private Limited, Hy-Tech USA Inc. Receivables from related parties as end of March 2026 stood at 1.32% of revenue from operations in FY26.

Operate in a competitive and fragmented industry(Indian hydraulic fittings industry is largely dominated by SMEs and presence of only a few large players) with low barriers to entry.

Apart from Satish Prabhakar Kulkarni, a member of Board of Directors of the company none of other directors have any prior experience of directorship in listed companies.

There has been certain delay in payment of statutory dues by the company in the past.

Post the filing of the Draft Red Herring Prospectus, a claim has been made against the company by Fedex Securities, a SEBI registered merchant banker.

Reported fall in PAT (down 35.59% to Rs 11.596 crore) in FY24.

Valuation

Consolidated re-stated revenue for the fiscal ending March 2026 stood higher by 17% to Rs 189.40 crore. With OPM contract by modest 20 bps to 22%, the growth of OP was 16% to Rs 41.69 crore. Finally, net profit was higher by 15% to Rs 22.59 crore.

On expanded equity, the EPS for FY2026 was Rs 2.4. On upper price band, the PE works out to 22.1 times of its FY26 EPS. The P/BV stood at 2.8 times and EV/Sales stood 2.7 times.

Repayment of Rs 16 crore from net proceeds will bring the borrowings down by about 39.24%, resulting in lower interest outgo. The EPS for FY26 works out to Rs 2.6 if 39.24% of its interest cost is removed, keeping all other items, including tax rate, same. The reworked PE stands at 20.4 times.

In comparison, Yuken India, Aeroflex Industries and Dynamatic Technologies quotes at a PE of 90.3 times, 119.8 times and 156.9 times.

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