Pitti Engineering has received a positive order from the Commissioner of Income Tax (Appeals) -12, Hyderabad, marking a significant victory in its ongoing tax dispute. The ruling, dated August 19, 2025, overturns a previous tax demand of ₹923.08 lakhs (approximately ₹9.23 crore) imposed by the Assessing Officer for the Assessment Year 2017-18.

Background of the Tax Dispute

The tax controversy originated from an order issued on December 29, 2019, under section 143(3) by the Assessing Officer. This order sought to include certain unsecured loans received by Pitti Engineering as taxable income. In response, the company filed an appeal before the Commissioner of Income Tax (Appeals) on January 21, 2020, challenging the assessment.

Favorable Ruling Details

The recent order, downloaded from the Income Tax portal on August 20, 2025, rules in favor of Pitti Engineering. Key points of the ruling include:

• The Commissioner of Income Tax (Appeals) has deleted the additions made by the Assessing Officer.
• The disputed demand of ₹923.08 lakhs, which had been disclosed in the company's financial statements since FY2019-20, is now effectively nullified.

Impact on Financial Reporting

Pitti Engineering had been reporting the disputed amount in its Standalone and Consolidated Financial Statements since the fiscal year 2019-20. The favorable ruling is likely to have a positive impact on the company's financial position, potentially allowing for the reversal of any provisions made for this tax liability.

Market Implications

The resolution of this tax dispute removes a significant contingent liability from Pitti Engineering's books. This development may be viewed positively by investors and could potentially influence the company's market valuation.

Compliance and Disclosure

In compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Pitti Engineering promptly informed the stock exchanges about this material development. The disclosure was made in accordance with the SEBI circular dated November 11, 2024, demonstrating the company's commitment to transparent communication with its stakeholders.

As the markets digest this information, investors and analysts will likely be keen to understand the full financial implications of this favorable tax ruling on Pitti Engineering's future performance and financial health.

Pitti Engineering , India's leading manufacturer of electrical steel laminations and machined components, has reported robust financial results for the first quarter and announced a significant capacity expansion plan.

Q1 Financial Highlights

The company's consolidated performance for Q1 showed notable growth:

• Revenue from operations increased by 17% year-on-year to ₹456.56 crore
• EBITDA grew by 30% to ₹75.40 crore
• Net profit rose by 17% to ₹22.90 crore
• EBITDA margin improved to 16.5% from 14.8% in the previous year's Q1

Operational Performance

Pitti Engineering demonstrated strong operational metrics:

• Sheet metal capacity utilization stood at 70%
• Machining hours capacity utilization reached 82%
• Casting capacity utilization improved to 69%

The company reported growth across various product segments:

• Stator frames – core drop registered a 28.0% growth
• Shafts – machined components increased by 19.8%
• Stator frame or rotor shaft integrated assemblies – laminations grew by 15.8%

Capacity Expansion Plan

In response to increasing business demand and growth opportunities, Pitti Engineering's Board of Directors has approved a ₹150 crore capex plan for enhancing manufacturing capacities. The expansion will be implemented across the company and its wholly-owned subsidiaries, Pitti Industries Private Limited and Dakshin Foundry Private Limited.

Key aspects of the capacity expansion include:

The expansion will be funded through a mix of internal accruals and debt, and is expected to be completed in a phased manner over 18 months.

Management Commentary

Akshay S Pitti, Managing Director & CEO, commented on the results: "We delivered a strong start with revenue growing 17% year-on-year to ₹457 crore for Q1, EBITDA increasing by 30% to ₹75 crore, and PAT rising 17% to ₹23 crore. Demand from end-user industries remains strong, supported by healthy order enquiries and bookings."

He further added, "Our backward integration capabilities and diversified product portfolio, which caters to multiple industries, position us well to tap into the expanding domestic market. On the international front, our exports business continues to grow steadily, contributing 31% to revenues in Q1."

Future Outlook

Pitti Engineering's performance and expansion plans indicate a positive outlook for the company. With its integrated manufacturing approach, focus on value addition, and strategic capacity enhancements, the company appears well-positioned to capitalize on the growing demand for laminations and machined components in both domestic and international markets.

The company's ability to secure technical approvals and supply sample products for new lines, along with its success in obtaining a second platform for alternators in data centers, further underscores its potential for sustained growth in the coming quarters.