Frontier Springs Q3 FY26 Result: PAT Up 64%, On-track FY26 Guidance

Revenue CAGR of 35% for FY25-27 with strong margins. After a strong Q3 FY26 Frontier Spring available at reasonable valuations based on FY27 forward valuations

Feb 17, 2026

1. Supplying springs and forgings for Indian Railways

The company primarily produces Hot Coiled Compression Springs and forging items, catering especially to the needs of Wagon, Locomotives, and Carriage sectors. Registered with RDSO since 1990, Frontier Springs is a trusted supplier to the Indian Railways
Indian Railways – Our Primary Customer

2. FY21–25: PAT CAGR 45% & Revenue CAGR 31%

3. FY25: PAT up 167% & Revenue up 71% YoY

4. Q3 FY26: PAT up 64% & Revenue up 40% YoY

PAT down 9% & Revenue down 2% QoQ

Sustained demand across all business verticals.
The Company continues to operate with a healthy order book
On the profitability front, margins witnessed a marginal compression during the quarter, primarily due to the increase in steel prices, which constitute a key raw material for our products.
Despite this cost pressure, overall operational performance remained stable.

5. 9M FY26: PAT up 94% & Revenue up 48% YoY

6. Business Metrics: Strong Return Ratios

7. Outlook: 35%+ Revenue CAGR for FY25-27

7.1 FY26 Guidance — Frontier Springs

Order-book provides visibility to FY26 target of ₹375 Cr

The Company continues to operate with a healthy order book
Remains firmly on track to achieve its stated gross revenue guidance of approximately 375 crores for FY26.
Frontier Springs remains confident of achieving 500 crores in gross revenues in FY27 and sustaining its growth trajectory.

7.2 9M FY26 Performance vs FY26 Guidance

Revenue: On-track to deliver FY26 guidance.
- Maintained FY27 guidance
Margins ahead of plan: 9M EBITDA margin of 26%+ is well above guidance Q1 guidance of 21-22%.

FY26 Targets → Possibility of beating guidance if Q4 is same as Q3

8. Valuation Analysis – Frontier Springs

8.1 Valuation Snapshot — Frontier Springs

Current Market Price ₹4395.25; Market cap ₹1,731 Cr

Frontier Springs at 29× FY26 P/E is near full value and at 22× FY27 P/E is reasonable
Frontier Springs generated ₹11.93 Cr free-cash flow in H1 FY26 and is available at a free-cash flow yield of 0.7% (not annualized) — highlighting the ability of the company to generate free cash-flow
Frontier Spring offers strong earnings growth but limited scope for re-rating from a FY26 perspective.
- The opportunity emerges from FY27 and beyond as long as the momentum is maintained

8.2 Opportunity at Current Valuation

Strong Demand: Outlook for next 5-10 years is strong

Don’t see that demand is going down for next 5-10 years, and it will keep on increasing every year. So, almost 6,000 to 7,000 coaches are being manufactured. So, they require at least next 15,000 coaches to replace ICF coaches. And then again, they need more coaches. So, the demand is going to be there for next 10 years or so. So, there is no problem in that. Demand, is no problem.

At current valuations, the margin of safety for fresh entry appears limited.

The opportunity may still appeal to investors who have strong conviction in the industry’s 10-year structural tailwinds.
For those who seek the reassurance of management guidance
- Existing investors can continue to ride the ongoing momentum
- New investors may consider reassessing the opportunity around FY26-end, when clearer visibility into FY27 and FY28 earnings should emerge.

8.3 Risk at Current Valuation

Valuations Already Reflect FY26: At ~29× FY26E and ~22× FY27E P/E, the stock is discounting management’s guidance, leaving limited room for re-rating unless earnings momentum continues into FY28.
Reliance on Indian Railways: Management confirmed Railways will remain the primary customer for the next 5 years. High customer concentration is an inherent risk.
Limited immediate traction in non-railway segments: Management acknowledged limited margin and demand visibility in:
- Automotive air springs
- Bus/truck applications
This constrains diversification.
Product Range not broad enough to take Frontier to 1,000 Cr revenue
- Execution around introduction of new products and acceptance by market needs to be watched for growth beyond FY27

Going to INR 500 crores to INR 1,000 crores, we will definitely require a big jump. So, we have to increase our product line to go up to that level. But going to INR 1,000 crores, bigger jump, we need more product into our kitty.