Can Lohia Corp IPO deliver long-term growth for high risk investors?

Synopsis

Lohia Corp plans an offer for sale to raise funds. The company's revenue grew significantly while its net profit surged. Its order book expanded substantially after strong financial performance. The business is cyclical, depending on agriculture and construction sectors. Investors with higher risk appetite may consider this long-term opportunity.

ET Intelligence Group: Lohia Corp, a machinery manufacturer for technical textiles, plans to raise ₹1,102 crore through an offer for sale. The promoter group's stake will fall to 75.2% after the IPO from 95.6%. Over 40% of the revenue comes from overseas. Imported raw materials accounted for about 16% of raw material costs in FY26 and any increase in import duties, tariffs, logistics disruptions or geopolitical issues could affect costs and production timelines. However, given strong financial performance, investors with a higher risk appetite may consider the IPO for the long term.

Agencies

Supply Snags Healthy financials make a long-term case, though duties and supply disruptions could weigh on co with 40% export revenue

Business

Incorporated in 2023, Kanpur-based Lohia Corp offers a wide range of machines, including tape extrusion lines, circular looms, coating and lamination lines, printing and conversion machines, multifilament yarn machines, twister winders, and related spare parts. These machines are used in the production of polypropylene and high-density polyethylene woven fabric and sacks among other products. It operates six manufacturing facilitie -four in India and one each in the USA and Italy. The company's business is cyclical as it depends on agriculture, textile and construction sectors, which are influenced by factors such as crop prices, weather conditions, fertilizer costs, real estate activity and overall economic conditions. According to the Frost & Sullivan report, the company is a market leader in the domestic woven raffia machines market, with a market share of 40.7% by value, in FY25.

Read more: Can Indo-MIM IPO deliver long-term growth for high risk investors?

Financials

On a year-on-year basis, revenue from operations grew 24.7% to ₹1,717 crore and net profit surged 64.2% to ₹193.5 crore. Around 88% of the revenue comes from woven raffia machines. Operating margin before depreciation and amortisation (EBITDA margin) expanded to 19.5% in FY26 from 16.5% a year ago. Cash flow from operations grew 130.1% to ₹325.2 crore in FY26 over FY25. The company's order book grew to ₹1,358.5 crore as of 31 March 2026 from ₹828.5 crore as on 31 March 2025. Net debt to equity contracted to 0.2 times in FY26 from 0.5 times in FY25.

Valuation
Considering the post-IPO equity and net profit for FY26, the company demands a price-earnings (P/E) multiple of 23. It does not have a direct comparable publicly listed peer. Some of the other engineering/capital goods machinery manufacturers serving industrial customers are Jyoti CNC Automation and LMW, whose price-earnings (P/E) multiple works out to be between 53-131.

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