LGB Forge reported a net loss of ₹0.51 crore for Q4 FY26, marking the third consecutive quarter of losses according to latest reports. The company's sales revenue increased by 7.59% quarter-on-quarter to ₹25.66 crore in Q4 FY26, up from ₹23.85 crore in Q3 FY26, though this represents a 7.23% year-on-year growth from ₹23.93 crore in Q4 FY25. The operating profit before depreciation, interest, tax, and other income (PBDIT excluding OI) stood at just ₹0.67 crore, representing a margin of 2.61% - a dramatic deterioration from the 6.04% achieved in Q3 FY26. This margin compression, coupled with elevated interest costs of ₹0.70 crore and depreciation of ₹0.87 crore, pushed the company into its third consecutive quarterly loss.
For the full financial year ended March 2026, LGB Forge reported a net loss of ₹2.22 crore, significantly higher than the net loss of ₹1.22 crore recorded in FY25, as reported by Business Standard. Despite the annual loss, the company demonstrated strong revenue growth with sales rising 9.73% to ₹103.19 crore in FY26 compared to ₹94.04 crore in the previous year. The profit before tax (PBT) improved to ₹1.53 crore in FY26 from ₹3.37 crore in FY25, indicating better cost management despite the overall loss position.
The company's profit before depreciation and tax (PBDT) declined to ₹0.41 crore in Q4 FY26 from ₹0.45 crore in Q4 FY25, representing a 9% decrease. For the full year, PBDT improved to ₹1.96 crore in FY26 from ₹0.46 crore in FY25, showing significant recovery in profitability metrics. The net profit loss for the year increased by 82% to ₹2.22 crore in FY26 from ₹1.22 crore in the previous year, despite the strong revenue growth and improved PBDT performance. The return on equity (ROE) stands at a meagre 3.14% on average, with the latest ROE at -7.92%, indicating value destruction for shareholders. Return on capital employed (ROCE) paints an equally grim picture at -2.69% on average and 0.48% in the latest period, suggesting the company is failing to generate adequate returns on the capital deployed in its business.
The stock has been under severe pressure, trading at ₹7.21 on May 15, down 2.30% from the previous close, reflecting investor concerns about the deteriorating financial performance. The stock has declined 30.67% over the past year, underperforming the sector by a staggering 62.07 percentage points. This massive underperformance reflects fundamental operational issues rather than sector headwinds. The company trades at an expensive valuation of 9.43x price-to-book value despite posting consistent losses and delivering the weakest ROE amongst its peer group. The complete absence of institutional investors—zero holdings by FIIs, mutual funds, and insurance companies speaks volumes about professional investors' assessment of the company's prospects. With institutional holdings at a negligible 0.01% (other DIIs), LGB Forge has failed to attract quality institutional capital, indicating limited confidence in the company's ability to execute a meaningful turnaround.
The company's balance sheet reveals mounting stress with shareholder funds declining to ₹18.29 crore in FY25 from ₹20.17 crore in FY24, primarily due to accumulated losses eroding reserves. Long-term debt stood at ₹10.24 crore, while total current liabilities decreased to ₹25.75 crore from ₹44.73 crore, partly due to a reduction in trade payables from ₹21.73 crore to ₹9.23 crore. This deleveraging on the payables side, while improving working capital, may indicate strained supplier relationships or reduced business activity. The net debt to equity ratio of 1.37 indicates elevated leverage for a company struggling with profitability. With an average EBIT to interest coverage of just -0.91x, LGB Forge is unable to service its debt obligations from operating profits, raising concerns about financial sustainability.
