GEE Limited targets earnings recovery through capacity expansion and specialised welding products

Investment View and Recommendation

ICICI Securities initiated coverage on GEE Limited on October 15, 2026, with a BUY recommendation. The broker sees GEE entering a capacity-led growth phase after operational stabilisation following promoter-management restructuring in FY26.

GEE manufactures welding consumables, including electrodes, MIG/TIG wires, submerged arc welding (SAW) wires and fluxes, along with specialised consumables. Its manufacturing facilities are located in Maharashtra and West Bengal.

Capacity Expansion and Operating Leverage

The central investment thesis is operating leverage from higher utilisation and expanded capacity. Installed capacity was approximately 59,075 MTPA in FY26, when utilisation improved to 57% from 48% in FY25.

ICICI Securities estimates that utilisation will rise to 60% in FY27E and 74% in FY28E, while capacity expands to 71,339 MTPA in FY27E. Management estimates that this capacity can support around Rs 850 crore of revenue at mature utilisation.

Planned cumulative capex of Rs 30 crore to Rs 40 crore over the next three to four years, including Rs 5 crore to Rs 10 crore in FY27, is intended to support:

• MIG wire expansion;
• SAW wire and flux production;
• Flux-cored wire capacity; and
• Relocation of the Thane facility.

Shift Towards Specialised Consumables

GEE is shifting its product mix towards higher-value specialised consumables. Niche products currently account for around 27% to 30% of revenue, while commodity products form the balance.

The company is expanding into SAW wires and flux, flux-cored wires, stainless-steel wires, nickel and exotic alloys, maintenance welding products and other specialised applications.

Management plans to commence approximately 250 MT per month of flux-cored wire capacity by Q3 FY27 and scale it to 1,000 MT per month by FY28. Management expects the 1,000 MT per month capacity to generate more than Rs 150 crore of revenue. It has set a revenue aspiration of Rs 1,000 crore by FY29 to FY30.

Financial Performance and Estimates

GEE reported revenue of Rs 369 crore, EBITDA of Rs 33 crore and PAT of Rs 13 crore in FY26, compared with revenue of Rs 334 crore, EBITDA of around Rs 1 crore and a PAT loss of Rs 9 crore in FY25.

ICICI Securities forecasts revenue of Rs 493 crore in FY27E and Rs 614 crore in FY28E, implying a FY26 to FY28E CAGR of around 29%. EBITDA is estimated to increase from Rs 33 crore in FY26 to Rs 45 crore in FY27E and Rs 61 crore in FY28E, with EBITDA margin improving from 9.0% to 10.0%. PAT is projected at Rs 24 crore in FY27E and Rs 36 crore in FY28E, representing an estimated CAGR of around 66% from FY26.

Strategic Growth Opportunities

The broker identifies nuclear, defence and shipbuilding as strategic growth avenues for GEE.

• GEE has received NPCIL approval. Management expects nuclear applications to contribute at least 10% of revenue over time, although the current contribution is negligible.
• The company supplied welding consumables for INS Dunagiri, INS Agray and INS Sanshodhak.
• Management expects shipbuilding to contribute around 3% to 5% of revenue as flux-cored wire consumption rises.
• Existing relationships with BHEL and Larsen & Toubro could provide demand from power and infrastructure project execution.

Valuation and Key Risks

ICICI Securities values GEE at 25 times FY28E EPS and sets a target price of Rs 170.

Key risks include:

• Sharp increases in steel, ferroalloy and other raw-material costs that cannot be passed through;
• Competition and pricing pressure from domestic and international manufacturers;
• Dependence on order conversion and the capex cycle; and
• Supply-chain disruption, geopolitical uncertainty and regulatory or environmental changes that could affect raw-material availability, costs and operations.