Hi-Tech Gears Q1 FY27 PAT Declines 20% YoY

Consolidated Financial Performance (Q1 FY27)

Operational Income: ₹2,377 Million, up 10.3% YoY (from ₹2,155 Mn in Q1 FY26) and up 4.0% QoQ (from ₹2,286 Mn in Q4 FY26).
Operational EBITDA: ₹263 Million, marginally up 0.4% YoY (from ₹262 Mn) and up 4.4% QoQ (from ₹252 Mn).
EBITDA Margin: 11.06%, down 110 basis points YoY (from 12.16%) and up 4 basis points QoQ (from 11.02%).
Profit Before Tax (PBT): ₹64 Million, down 39.0% YoY (from ₹105 Mn) and down 36.0% QoQ (from ₹100 Mn).
PBT Margin: 2.69%.
Profit After Tax (PAT): ₹48 Million, down 20.0% YoY (from ₹60 Mn) and down 40.7% QoQ (from ₹81 Mn).
PAT Margin: 2.02%, down 71 basis points YoY (from 2.73%) and down 146 basis points QoQ (from 3.48%).
Diluted EPS: ₹2.53, down 20.7% YoY (from ₹3.19) and down 41.3% QoQ (from ₹4.31).
Other Comprehensive Income: Loss of ₹43 Million (compared to a gain of ₹80 Mn in Q1 FY26).
Total Comprehensive Income: ₹5 Million, down 96.4% YoY (from ₹140 Mn).

Standalone Financial Performance (Q1 FY27)

Operational Income: ₹1,700 Million, up 6.9% YoY.
Operational EBITDA: ₹183 Million, down 7.1% YoY.
EBITDA Margin: 10.76%, down 162 basis points YoY (from 12.38%).
Profit Before Tax (PBT): ₹85 Million, down 34.1% YoY (from ₹129 Mn).
PBT Margin: 5.00%.
Profit After Tax (PAT): ₹62 Million, down 34.0% YoY (from ₹94 Mn).
PAT Margin: 3.65%, down 211 basis points YoY (from 5.76%).
Diluted EPS: ₹3.32, down 33.5% YoY (from ₹4.99).

Operational Highlights & Business Update

India Business: Consolidation and Efficiency Improvements

The standalone India operations are in a consolidation phase focused on improving operational efficiency through machine throughput and labor productivity initiatives.
Q1 FY27 is the second consecutive quarter of this transformation journey. Revenues stabilized and were marginally higher sequentially and YoY, but the bottom line remained under pressure due to cost absorption from the transformation program and inflationary pressures.
Machine Refurbishment Program: A structured program to refurbish critical machines is underway to improve long-term manufacturing efficiency.
All critical machines in the forge shop have been refurbished.
A significant number of high-value machines in the machine shop were refurbished by June 2026; completion is expected around Q2 FY27.
Select critical machines are planned for a complete overhaul in Q1 and Q2 FY27.
New machines are being added as balancing capacities to cater to higher demand from existing customers in EV and premium segments.
Cost absorption from this refurbishment activity is pressuring current profitability, with throughput improvement expected as machines return to full operation.
Cost Inflation: Conversion costs increased due to inflationary pressures.
Prices of PNG, LPG, industrial diesel, and cutting tool consumables rose, driven by crude and derivatives inflation.
Gas shortages caused intermittent production disruptions, leading to frequent changeovers and additional working hours (all customer commitments were met).
A government-mandated minimum wage revision increased manpower costs.
Employee costs increased as the organization strengthened its workforce in critical areas.
Labor Productivity: Focus on changing the labor mix in favor of permanent labor to ensure higher availability and lower attrition. Active training and multi-skilling programs are in execution.
Demand: Domestic demand for premium motorcycles and scooters (EV and ICE) remained healthy. Export demand to North America started seeing improvement.

North America Business

Revenues increased both sequentially and Year-on-Year.
Market demand is stabilizing as geopolitical uncertainty is factored in and customer ordering patterns return to normal.
New Business: Won additional business with two existing customers in Q2 FY26. Samples are being made for PPAP approval. Multiple other RFQs are being responded to with existing and new customers.

New Business Wins

FY23-25: Won new business with an annualized value of ~₹803 Mn (₹309 Mn from existing customers, ₹494 Mn from new customers). This included an entry into Indian Passenger Car customers.
FY25-26: Won new business with an annualized value of ~₹1,172 Mn (₹860 Mn from current customers, ₹312 Mn from a new customer). This included the inclusion of a new customer and a new platform.
The average ramp-up time to achieve peak revenues is ~2-3 years post Start of Production (SOP). All new programs are being launched with limited balancing capex.
The focus is on premium and new segments, including higher CC bikes (>350 CC) like Royal Enfield and Harley Davidson X-440, and entry into the Indian Passenger Car SUV segment with Mahindra & Mahindra.
The company has won EV business from Hero Moto Corp and Dana, which is currently in production, and has active quotes across customers in the EV space.

Historical Financial Performance

Consolidated (FY24-FY26, Q1 FY27)

Revenue from Operations: FY24: ₹11,069 Mn; FY25: ₹9,270 Mn; FY26: ₹9,084 Mn; Q1 FY27: ₹2,377 Mn.
EBITDA Margin: FY24: 13.55%; FY25: 14.66%; FY26: 11.13%; Q1 FY27: 11.06%.
PAT Margin: FY24: 10.23% (includes one-time income); FY25: 4.30%; FY26: 2.30%; Q1 FY27: 2.02%.
Diluted EPS (INR): FY24: 60.73; FY25: 21.46; FY26: 11.15; Q1 FY27: 2.53.

Standalone (FY24-FY26, Q1 FY27)

Revenue from Operations: FY24: ₹7,800 Mn; FY25: ₹6,576 Mn; FY26: ₹6,668 Mn; Q1 FY27: ₹1,700 Mn.
EBITDA Margin: FY24: 13.5%; FY25: 14.6%; FY26: 11.1%; Q1 FY27: 10.76%.
PAT Margin: FY24: 6.2%; FY25: 7.1%; FY26: 4.9%; Q1 FY27: 3.65%.
Diluted EPS (INR): FY24: 26.19; FY25: 25.19; FY26: 17.57; Q1 FY27: 3.32.

Balance Sheet Snapshot (as of FY26 End)

Consolidated

Total Assets: ₹8,393 Mn.
Non-Current Assets: ₹4,572 Mn (Property, plant and equipment: ₹2,985 Mn; Right of Use Assets: ₹586 Mn; Goodwill: ₹383 Mn).
Current Assets: ₹3,821 Mn (Inventories: ₹1,408 Mn; Trade Receivables: ₹1,732 Mn).
Total Equity: ₹5,226 Mn (Equity Share Capital: ₹188 Mn; Other Equity: ₹5,038 Mn).
Non-Current Liabilities: ₹1,266 Mn (Lease Liability: ₹1,095 Mn).
Current Liabilities: ₹1,901 Mn (Borrowings: ₹534 Mn; Trade Payables: ₹1,011 Mn).

Standalone

Total Assets: ₹6,912 Mn.
Non-Current Assets: ₹4,040 Mn (Property, plant and equipment: ₹1,715 Mn; Investments: ₹1,552 Mn).
Current Assets: ₹2,872 Mn (Inventories: ₹1,003 Mn; Trade Receivables: ₹1,358 Mn).
Total Equity: ₹4,962 Mn (Equity Share Capital: ₹188 Mn; Other Equity: ₹4,774 Mn).
Non-Current Liabilities: ₹604 Mn.
Current Liabilities: ₹1,416 Mn (Borrowings: ₹451 Mn; Trade Payables: ₹739 Mn).

Share Price & Market Data (as of June 30, 2026)

Face Value: ₹10.00
CMP: ₹655.00
52 Week High/Low: ₹894.80 / ₹532.05
Market Cap (INR Mn): ₹12,309.56
Shares Outstanding (Mn): 18.79
Avg. Volume ('000): 1.47
Shareholding Pattern: Promoters: 56.12%; Public: 43.88%

Other Information

The company has 5 manufacturing plants (3 in India, 1 in Canada, 1 in USA).
Its product portfolio includes precision gears, shafts, transmission components, and engine components for Two-Wheelers, Passenger Vehicles, Commercial Vehicles, and Agri and Off-Highway Vehicles.
The presentation includes standard forward-looking statements and disclaimers.