Financial Performance Summary

Q1 FY27 Financial Results (YoY Comparison):

  • Sales: ₹769.9 crores (up 18.62% from ₹649.07 crores in Q1 FY26)
  • EBITDA: ₹104.06 crores (up from ₹87.36 crores)
  • EBITDA Margin: 13.5% (vs. 13.46% in Q1 FY26)
  • PAT: ₹65.19 crores (up 16.31% from ₹56.05 crores)
  • LED Lighting Share: 63% of total automotive lighting revenue
  • Quarterly Capex: ₹41.15 crores

Operational and Business Updates

Industry Context: Indian 2-wheeler industry delivered record Q1 with 7.25 million units (highest ever for a first quarter), supported by GST rationalization, retail financing, and strong rural demand. Export and electric vehicle segments grew even faster.

Customer Performance:

  • TVS: Excellent quarter with iQube crossing 1 million cumulative sales; second Norton Manx model launched for UK export
  • Honda: Business grew in line with volumes; several new models in pipeline
  • Hero: Fast-growing customer with strong business growth led by Vida EV platform; will supply all Vida lamps for Hero's new Andhra Pradesh plant from Hosur facility starting next quarter

Electric Vehicle Segment Development:

EV accounted for over 9% of 2-wheeler volume in Q1 (up from ~6% a year ago)

New EV lighting supplies commenced for:

  • Ather's new model Konarc (sole supplier for this model)
  • River's new RX02 model
  • Royal Enfield's EV Flying Flea model

Capacity Expansion:

Customers announced significant capacity enhancements:

  • TVS expanding 2-wheeler capacity from 6.8M to 8.3M units by year-end
  • Hero tripling Vida capacity from 15,000 to 45,000 units per month
  • Company expanding Hosur footprint at both Kelamangalam and Thally Road plants

4-Wheeler Business Update:

Revenue contribution remains at ~2.5% (similar to last year)

Scaling delayed by approximately 2 quarters; meaningful contribution now expected from FY28 onwards

Supplies to Mahindra & Mahindra scaling up as planned

Development programs with Force Motors and other leading OEMs progressing

Mercedes prototyping ongoing with samples submitted for testing and evaluation (1.5-2 year validation timeline expected)

Technology Development:

Hands-off detection system: POC developed and presented to customers

Light Control Module (LCM): Working with 2-3 customers for upcoming launches

EMC/EMI lab: Supporting faster testing and validation, reducing development time

Ambient lighting: Working with optical fiber technology for better uniformity

Focus lighting and projection lighting: Presented to customers, awaiting feedback

Management Guidance

Full Year FY27 Guidance:

  • Revenue Growth: 15-20%
  • EBITDA Margin: ~14% (Q1 impacted by employee cost increases and raw material cost pressure)
  • Capex: Approximately ₹100 crores (similar to ₹110 crores last year)

Long-term Outlook:

LED penetration expected to reach ~70% in next 24-30 months (from current 63%)

By 2030, new models expected to be 90-95% LED

4-wheeler business viewed with 10-year lens despite current delays

Q&A Session Highlights

Margin Pressure: Q1 cost increases (employee costs and raw materials) expected to be passed through with a lag of couple of quarters. Full-year margin guidance maintained at 14%.

4-Wheeler Challenges: Conversion cycle with customers taking longer than expected due to processes and initial checklists. No specific procedural delays identified.

Yamaha Performance: Export models affected by seasonal cycles; domestic models performed well. Company remains bullish on Yamaha business recovery in coming quarters.

Employee Costs: Minimum wage hike in Haryana (35% increase) impacted Q1 costs, with similar run rate expected for next 3 quarters. Other states implementing similar revisions.

Competitive Position: Wallet share with top 4 customers remains stable. Company participating in over 100 models across customers.

Capital Allocation: ₹280 crores cash with no debt. Evaluating both organic and inorganic opportunities, including potential electronics segment expansion. Capex being funded through internal accruals.

Raw Material Pressure: 20% input content facing cost increases across industry. Company expects to pass through costs with lag as historically done.