GMM Pfaudler: Record sales of ₹3,524 crore, and 1.5% kept as profit

Small cap Process equipment 18 September 2026 · 48 min read · Part 1: 3 min · By Pranami Hayaran

What the company does

GMM Pfaudler makes the steel tanks that drug and chemical factories cook acids in, lined with glass so the acid cannot eat the steel. It also makes the mixers, seals, filters and dryers that go around a tank, and builds whole plants, such as one that cleans acid for reuse. A tank comes back every 7 to 9 years for a new lining, so about 30% of revenue is services and spares. In FY26 it sold a record ₹3,524 crore and kept ₹52 crore after tax. It runs 20 plants on 4 continents with about 2,000 staff from Karamsad, a town in Gujarat, and earns 72% of its revenue outside India. The Patel family started it in 1962 and owns 25.18%. The shares trade on the NSE as GMMPFAUDLR and on the BSE.

Summary

A Gujarat maker of acid-proof tanks that now earns mostly abroad. It makes steel tanks lined with glass, which keeps acid off the steel, for drug and chemical plants, and the rating agency Crisil says it makes 50% of the glass-lined equipment sold in India and in the Americas. It runs 20 plants on 4 continents with about 2,000 staff, and 72% of its revenue is earned outside India.
Sales are at a record, but the overseas plants now earn little. FY26 revenue was a record ₹3,524 crore, up 10%, yet profit after tax was only ₹52 crore, a margin of 1.5%. Since FY24, operating profit abroad fell ₹121.5 crore while India's rose ₹0.7 crore.
Orders are at a record, helped by defence and nuclear work. The order book, work won but not yet delivered, is at a record ₹2,289 crore. New industries such as defence and nuclear power won 42% of last year's orders, led by a ₹330 crore acid recovery plant for a European ammunition maker.
The business makes cash, but it owes more than its debt figure shows. In FY26 it brought in ₹389 crore of cash after tax, helped by bigger deposits from customers. The overseas staff pensions have a ₹335 crore gap between what was promised and what is set aside, and the company leaves it out of its ₹147 crore net debt figure.
One-off costs keep coming back, and past targets were missed. One-off charges added up to ₹165 crore in 3 of the last 4 years. The company promised ₹3,700 crore of revenue and ₹630 crore of EBITDA by FY25, EBITDA being profit before interest, tax and depreciation, and it ended up with ₹3,199 crore and ₹361 crore.
The fix has a new team and no numbers to hold it to. The Group CFO resigned on 15 September 2026, after the India business lost its CEO and its CFO. Management says it will aim for EBITDA of at least 15% of sales, against 11.4% in FY26, but the new plan it has promised has still not been given.

Why this company, why now

The share price and the profit have gone opposite ways.

The share fell to ₹738 on 11 June 2026, 3 weeks after the FY26 results. From there it climbed steeply through the summer. The At a glance card above has today's price.

GMM Pfaudler's share climbed steeply after its June 2026 low

GMM Pfaudler's closing share price on NSE, September 2025 to September 2026. It fell to ₹738 in June, 3 weeks after the FY26 results, and climbed from there.

₹ per share, closing price

11 June 2026: ₹738, 3 weeks after the FY26 results

NSE end-of-day prices · 15 September 2025 to 17 September 2026

The profits have not followed. Revenue is at a record, and profit after tax is less than a third of what it was 2 years ago (Revenue and profit, year by year).

Revenue is at a record. Profit is less than a third of two years ago.

What the market believes. The market is buying a turnaround. The order book is at a record ₹2,289 crore. The company has closed a plant in Scotland and one in Hyderabad, cut nearly a third of the wage bill at its German plant, and says a 15% EBITDA margin is the minimum it will aim for, well above what it earns today. EBITDA is operating profit before interest, tax and depreciation. The buyers over the last 2 years were Indian mutual funds; the sellers were foreign funds and retail holders (Shareholding). ChrysCapital, with 8.25% and a board seat, has held since 2023. The dissent on record is small: a vote against the Group CEO's pay from 1 in 9 public institutions.

Where the filings differ. One-off charges amounting to ₹165 crore keep coming back, in 3 of the last 4 years. Every target set since 2022 has been missed. The overseas plants, 72% of sales, earned ₹4.40 on every ₹100 of sales last year. A ₹335 crore pension gap sits outside the net debt figure. And in 20 months the company has lost both its finance chiefs, its India head and its head of the overseas business; the latest, the Group CFO, resigned on 15 September 2026. The questions are whether the turnaround is real, and what it costs to buy.

Six brokers publish on the company. Their notes are listed under Sources, and none of their ratings, targets or estimates is used here.

History

In 1884 Caspar Pfaudler, a German brewmaster in Rochester, New York, found the fix for acid eating beer vats: melt a layer of glass onto the inside of the steel. The company he started still sells these tanks, which the industry calls glass-lined reactors.

1962. Gujarat Machinery Manufacturers starts in Karamsad.
1987. Pfaudler of the US takes 40% of it.
2015. Tarak Patel, son of chairman Ashok Patel, becomes managing director.
2020. The roles flip. The Indian company buys 54% of the whole Pfaudler group from the German private equity fund DBAG for about USD 27 million, with the group's own debt attached. Revenue goes from ₹591 crore in FY20 to ₹2,541 crore in FY22.
2021 to 2022. It buys De Dietrich's small glass-lining plant in Hyderabad, "about three years" before February 2025, and the Vatva plant of the bankrupt HDO Technologies, once Hindustan Dorr-Oliver, at an insolvency auction for ₹58 crore. This is the heavy engineering business.
September 2022. It buys the other 46% of Pfaudler for ₹344 crore from 2 promoter-group companies, paying partly in cash and partly in new shares. The same month it holds an Investor Day and promises ₹3,700 crore of revenue and ₹630 crore of EBITDA by FY25.
December 2022 and August 2023. DBAG sells out of the Indian company, some at about ₹1,700, the rest when ChrysCapital buys 9.9%.

The last 2 years, from the plant closures of FY25 to the exits of 2026, are under Recent developments.

How the business works

How a GMM Pfaudler tank is made, sold and comes back

A reactor starts with the customer. A drug or chemical company's plant engineer decides what will be cooked, at what temperature and in what acid, and writes the specification. GMM Pfaudler designs the vessel to that specification, builds it in one of its plants, lines it, tests it to the pressure-vessel codes the customer's country requires, and delivers it. For a whole plant, such as an acid recovery system, it also engineers the process and installs the equipment, over years rather than months.

The customer pays in stages. Large systems come with a deposit on signing, 30% in the case of the defence order, and at March 2026 the company was holding ₹427 crore of customer money for equipment not yet delivered.

Then the vessel comes back. A reactor lasts 7 to 9 years, then needs a new glass lining, a new stirrer, new seals. That is why about 30% of GMM Pfaudler's revenue is services and spares, and why customers rarely switch.

Power sits in 2 places. In a normal year it sits with the maker: Crisil says GMM Pfaudler makes 50% of the glass-lined equipment sold in India and in the Americas, 40% of it in Europe and 20% in China, and its annual report says its equipment is "trusted by over 90% of the world's top chemical companies". In a downturn it moves to the customer: when chemical companies stopped spending in 2024, discounts went up (Pricing power). In nuclear work the rules are set by a third party: Nuclear Power Corporation of India (NPCIL) decides who may supply what, and the N stamp certificate decides who may make the parts a reactor's safety depends on. GMM Pfaudler does not have one.

How the money is earned. Equipment is sold per order. A customer orders a reactor, pays a deposit, and the order sits in the backlog until it is built and shipped, which for the new orders is mostly 10 to 12 months. Systems are sold per project and take years: the defence plant takes 4 years to deliver. Services and spares are sold when a vessel comes back for relining, on a cycle of 7 to 9 years, and are the steadiest third of revenue.

So the arithmetic is: orders won this year and last, less what has been delivered, equals the backlog; the backlog turns into revenue at the pace of the plants. In FY26 the company won ₹3,714 crore of orders, 20% more than the year before, so it booked ₹1.05 of orders for every ₹1 it billed.

There is no revenue per unit. The company does not disclose how many vessels it makes, and a reactor for a Hyderabad peptide plant and a 4-year acid plant for an ammunition maker are not the same unit.

Who pays: the customer, directly, in every division. The only government money in the business is NPCIL and the contractors it picks.

Products and segments

From the June 2026 quarter the company reports 4 divisions.

Four divisions, one quarter: what each one sold and won

Glass-lined equipment is the core, and the main business of the first division, Corrosion Resistant Technologies. The plants are in Karamsad in Gujarat, Rochester in the US, Waghäusel in Germany, Italy, Brazil and China. In FY26 Karamsad, which now does all of India's glass-lined work, was full while the plants abroad were not (Operations and capacity).

Edlon is the other business in that division: a small company in Pennsylvania that lines tanks and pipes with the plastic best known as Teflon, for factories where even a speck of metal would ruin the product, mostly makers of computer chips. "We work with Micron, we work with Intel," Tarak Patel said in May 2026. Its sales are about USD 25 million a year, a number management has quoted since May 2024, so the growth has stalled. Profit has fallen every year since FY24. It still matters more than its size, because the rest of the group earns so little: Edlon's profit was equal to 48% of the group's in FY25 and 37% in FY26, on about 6% of the revenue.

A US unit a sixteenth the size earns over a third of the profit

Mixers, seals, filters and dryers are the second division, built mostly from small acquisitions: Mixel in France, MixPro in Canada, SEMCO in Brazil, Mavag in Switzerland. Together the mixing business is about USD 65 million a year.

Heavy engineering is the Vatva plant near Ahmedabad. It makes very large alloy reactors, columns and pressure vessels for nuclear, power and refinery projects. It did about ₹300 crore of revenue in FY26 and can do ₹600 to 700 crore.

Process systems sells a whole plant rather than a piece of it, for example a system to recover acid from waste. The biggest order in the company's history came here, from a weapons maker.

By type of sale, FY26 revenue was ₹2,036 crore of equipment, ₹437 crore of systems and ₹1,036 crore of services and spares. By division, only 1 quarter is public, in the chart above.

Which one earns the margin. The company does not report profit by division. What it does report says the money is in India and in Edlon: India is 28% of revenue and made half the operating profit; Edlon is about 6% of revenue and over a third of the profit.

India against overseas, over the years. The company reports 2 geographic segments. Overseas operating profit went from ₹233 crore in FY24 to ₹112 crore in FY26; India's went from ₹112.5 crore to ₹113.2 crore. Every rupee of the fall in operating profit since FY24 came from abroad. India's margin barely moved, from 12.6% to 11.6%; overseas went from 9.1% to 4.4%.

The one-off costs listed under Margins and quality of earnings explain part of the gap: the German severance falls on overseas, the Indian labour-code provision on India. Leave them out and India makes about ₹12.90 on every ₹100, overseas about ₹6.40. The overseas plants also carry the cost of the Pfaudler deal: their depreciation on plant and intangibles was ₹85.8 crore, 4 times India's ₹21.4 crore.

Which one management is pushing, and where the money went. Management talks about defence and nuclear first, the heavy engineering plant, which it says can double or triple "from this very site", Poland, where the cheap steel fabrication now sits, and a margin floor (Growth drivers and guidance). The FY26 money went to Brazil (SEMCO), Poland and German severance.

Customers

The mix has changed. Before the Pfaudler deal, about 80% of orders came from chemical and pharma companies. Now it is about 55%, with the rest from defence, nuclear, oil and gas, mining, water and semiconductors.

Named customers. Micron and Intel at Edlon. Nuclear Power Corporation of India in heavy engineering. A European weapons maker the company is "not permitted to disclose the name of". In chemicals, the annual report's "over 90% of the world's top chemical companies", none named.

Concentration. The segment note has no major-customer line, which the segment-reporting standard requires whenever a single customer is a tenth or more of revenue, so no customer is that large. Crisil says the company has been "servicing around 70% of its top customers for more than 20 years". The one order that can be sized is the defence contract: it was ₹355 crore of the ₹1,004 crore won in the June 2025 quarter, a third of a quarter's intake from 1 buyer.

Why they buy here, and for how long. A customer that has a Pfaudler reactor comes back for its relining for the life of the plant: the services and spares business (How the business works). Chemicals have been weak for 2 years, in India and more so in Europe. Tarak Patel, May 2026: "Europe Chemicals is definitely slow. You know BASF, Bayer, you hear of people shutting down facilities." In the June 2026 quarter India's drug makers were ordering again: 2 large peptide plant orders came from Hyderabad, the molecule behind the new weight-loss drugs, the US sent pharma orders, and even China "has also come back with good orders". Indian chemicals are still flat.

Bad debts. Of ₹502 crore of gross receivables at March 2026, ₹23.2 crore carried a "significant increase in credit risk" and ₹4.3 crore were credit-impaired; the allowance for doubtful debts and liquidated damages was ₹36.7 crore. Terms are 30 to 60 days. Sales to related parties were 7.82% of the standalone company's sales, mostly to its own overseas units.

Complaints. 505 customer complaints in FY26, against 398 the year before, with 5 open at year end. In the 2024 downturn, Tarak Patel said, "four or five other customers who were buying from our competitors" came back after trying cheaper equipment; in August 2026 he said "the big Hyderabad players are expanding".

The defence order

An ammunition maker buys from a maker of chemical tanks because of acid. The powder in an artillery shell is made by soaking cotton in strong acid. Afterwards the acid is dirty, but it can be cleaned and used again. GMM Pfaudler is building the plant that does this cleaning. On 19 June 2025 the company told the exchanges that its German unit, Pfaudler Normag Systems, had won a contract to "design, engineer and supply complete end-to-end acid recovery equipment & systems" for "a leading European manufacturer of light and medium weapons, ammunition, and tools for the defence and civilian sectors". It is worth EUR 33.2 million, about ₹330 crore, takes 4 years to deliver, and came with 30% paid on signing. The scope is the whole plant, not a vessel. By February 2026 the company said its systems orders were being driven by European defence spending.

What it earns is not disclosed; the company does not report profit by division. What it does to the numbers: it was ₹363 crore of the systems division's intake in the June 2025 quarter, against ₹80 crore a year later, and it is why the record June 2026 intake is only ₹3 crore above the year before.

The nuclear work

GMM Pfaudler now supplies NPCIL with heat exchangers, which pass heat from one stream of water to another, and pressure vessels. Bajpeyee said the heat exchangers go into both of a plant's water loops: the primary loop, which runs through the reactor, and the secondary loop, which turns that heat into steam. NPCIL is splitting its orders, and GMM Pfaudler will supply both NPCIL and the contractors NPCIL picks to design and build each station: "a continuous opportunity over the next 5 years", Dhananjay Bajpeyee, who runs heavy engineering, said in November 2025.

The limit is the nuclear stamp. In February 2026 Tarak Patel said the orders are for "ancillary equipment", the supporting kit around the reactor, and "these are not nuclear stamped vessels". Bajpeyee and Patel could both be right: each water loop has plenty of equipment that does not need the stamp. Most likely the heat exchangers serve both loops but are not parts the reactor's safety rests on. The company has not said so, but "ancillary" points that way. The qualification to bid came with the HDO purchase, whose approvals Bajpeyee said were being passed on to GMM; Tarak Patel said the company has been "working quite hard to get our names registered". That is not the same as being registered.

The orders are small and unfiled. The largest is worth about ₹130 crore, or roughly USD 15 million. The company has given no total for its nuclear orders and has only spoken about them on earnings calls: since April 2023 it has made hundreds of filings, and only one reports an order win, the European defence contract. The word nuclear does not appear once in the FY24 or FY25 annual reports, and 9 times in FY26. Still, the opportunity is huge, on the policy numbers under Industry size and structure, and the SHANTI Act means a supplier whose equipment fails can no longer be sued by the plant's operator.

Contract length is getting shorter. Gregory Gelhaus, the Group CEO, said in August 2026 that nearly 30% of the June 2025 quarter's intake was multi-year projects, while the current book is mostly projects of 10 to 12 months. That is good for FY27 revenue. It also means the backlog needs topping up faster.

Bans and refusals. No tender ban appears in the documents read. The one export-licence refusal, in FY23, is under Regulation and policy.

The pipeline. In November 2025 Patel said the company was chasing a similar acid plant in Eastern Europe, worth "about 10 million", spoke of "another very large contract" under discussion, and of US projects where the customer had already signed for the design work. None of those has been announced as won yet.

Costs and inputs

₹100 of sales leaves ₹11 of EBITDA and ₹1.50 of profit

Of every ₹100 of FY26 sales, ₹40 went on materials, ₹28.60 on staff, ₹3.40 on contract labour, ₹17 on other expenses, leaving ₹11.40 of EBITDA. Then ₹4.50 of depreciation, ₹3.50 of finance cost, and a tax bill that took 49% of what was left.

The inputs. The materials are steel, alloys for the heavy vessels, and the glass that is melted onto the steel. Energy matters because lining is done in a furnace: asked about the March 2026 quarter, Tarak Patel pointed to higher costs from gas and metal prices. Power and fuel cost ₹87 crore and freight ₹66 crore. Whether those costs pass through to the price depends on the cycle (Pricing power).

The suppliers. The standalone company bought from 711 trading houses in FY26; 17.74% of its purchases came through trading houses and the top 10 of those supplied 50.85% of that. Purchases from related parties were 1.84%. Its foreign exchange outgo, imports included, was ₹69.7 crore against earnings of ₹181.3 crore. Suppliers are paid in 58 days. The one supply chain the company talks about is its own: the Polish plant now makes the steel parts that Germany, France and Switzerland used to make, is already running full, and needs 2 more sheds.

Fixed against variable. Materials move with sales. Staff do not: half of the about 2,000 employees are abroad, where wages are high, and a reactor built at Waghäusel costs far more than the same reactor built in India. That is why the company is moving work to Poland and India, and why letting go of 35 German workers saves as much as ₹45 crore a year. Among other expenses, legal and professional fees were ₹96 crore. In India the shop floor is contract labour: 1,960 of the 2,141 workers were not permanent at March 2026, against 633 employees of the company's own, which keeps that cost variable.

Operating leverage. Revenue rose 10% in FY26 and EBITDA 11%, from ₹361 crore to ₹403 crore: barely more than sales, because the plants abroad were running at 50% to 70% and discounts had not come back.

Interest eats 30% of EBITDA. Finance cost was ₹123 crore against EBITDA of ₹403 crore. Only ₹74 crore of that is interest on loans. The rest is the ₹11 crore loss on restating loans between group companies, a ₹13 crore fair value loss and ₹10 crore on leases.

Pricing power

In the glass-lined business the price holds when plants are full and gives way when they are not. When the chemical slowdown hit in 2024, discounts in India went up "by about 10% to 15%". They have only partly come back. Management said in August 2026 that "with the market improving, pricing is also improve", but the June quarter EBITDA margin was still 10.1% and the CFO blamed "continued pricing pressure".

The company will not name its competitors. Analysts on its calls have pointed to a "number three player from Hyderabad" that had "become aggressive with pricing". For nuclear and defence work the price is set in a tender, and the company says only that heavy engineering is "slightly different in terms of the processes, margins profile".

What protects the price is the installed base: a plant with Pfaudler reactors comes back to Pfaudler for relining. What limits it is a customer who can wait, as the chemical companies did for 2 years.

The business rides the capital spending of drug and chemical companies. When they stopped spending, the backlog fell from ₹2,247 crore in December 2022 to ₹1,625 crore a year later, FY25 revenue fell 7%, and the glass-lined business "has now gone through a really tough time over the last two years", Tarak Patel said in August 2026. The backlog has climbed since June 2025, with 1 small dip, and the June 2026 quarter was the first that looked different in India.

The order book shrank for two years. It is now at a record.

The 8-quarter chart under Operating metrics shows no clear season. The March 2026 quarter was the largest by revenue and the weakest by margin, for reasons management gave as a large heavy engineering order shipped in the quarter that weighed on margins and gas and metal prices, not the calendar.

Operations and capacity

Karamsad, Gujarat. All of India's glass-lined work since Hyderabad closed. Full, on 3 shifts, with a 5 to 6 month backlog in November 2025.
Vatva, near Ahmedabad. Heavy engineering, 11.9 acres and 7 manufacturing bays, about ₹300 crore of revenue in FY26, capacity for ₹600 to 700 crore without more spending.
Hyderabad. Bought in 2020, closed in early 2025, land sold for ₹58.9 crore in February 2026.
Waghäusel, Germany. Kept, with 35 people let go, nearly 30% of the German wage bill.
Leven, Scotland. Stopped making glass-lined equipment in FY25.
Poland. Steel fabrication for Europe, 51% owned, already full. Permits applied for "building number three and four", which would triple the site.
Rochester (US), Italy, Brazil, China. Glass-lined plants; the overseas plants ran at 50% to 70% in 2025. Switzerland was restructured after losing money in FY25, China had costs taken out.
Edlon, Pennsylvania. Two sites since it opened a second in Coatesville in FY24.

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