Financial Performance Highlights

Q1 FY27 (Quarter Ended June 30, 2026) Results:

  • PAT: ₹4.48 crore, up 218% YoY from ₹1.41 crore in Q1 FY26
  • EPS: ₹12.31
  • ROCE: 22%, up from 18% in Q4 FY26 and 14% in previous year
  • EBITDA: ₹10.89 crore (all-time high)
  • EBITDA Margin: 16.2%, up 640 basis points YoY from 9.3%
  • PBT Margin: 9.2%, up 600 basis points YoY
  • PAT Margin: 6.7%, up 450 basis points YoY
  • Total Revenue: ₹67.07 crore, up 3.9% YoY from ₹64.53 crore and up 13.2% QoQ from ₹59.24 crore
  • Debt to EBITDA Ratio: Improved to 2.51 from 3.53
  • Cash Conversion Cycle: 148 days, improved from 168 days in previous quarter

Operational Performance

Product Group Performance (YoY Growth):

  • Engine Products: ₹40 crore, up 38% YoY (60% of total revenue)
  • Axle Products: 22% YoY growth
  • Driveline Products: 11% YoY growth

Market Segment Performance (YoY Growth):

  • Passenger Cars: 35% growth
  • Trucks: 48% growth (fastest growing segment)
  • Industrial Segment: 67% growth
  • Agro Business: Down 31% due to consolidation of legacy businesses
  • Export Sales Mix: Revived to 16% in Q1 FY27 from 11% in Q4 FY26

Business Mix Optimization:

  • OEM Revenues: ₹40.7 crore in Q1 FY27, 31% YoY growth and 9% QoQ growth
  • Fourth consecutive quarter of OEM revenue growth
  • ₹40 crore of non-fit business phased out in FY26
  • Phase four of business mix optimization underway with capex budgets aligned to core customers

Strategic Initiatives

Vriddhi Council Cost Savings:

  • ₹19.1 crore savings realized to date against ₹50 crore annual target
  • ₹4.2 crore quarterly savings (annualized basis)
  • Focus areas: material costs, power costs, manpower costs, price increases, VAVE, productivity improvements
  • Savings help increase EBITDA and absorb cost inflation

Business Development:

  • New business revenue (launched in last 3 years): 22% of total revenue (₹13 crore)
  • Wheel hub samples in validation phase with ₹20 crore annual revenue potential
  • New wheel hub line installation in progress using existing CNC machines from phased-out businesses
  • Machining capacity expansion from 1.8 lakh pieces/month to 3 lakh pieces/month targeted by end-FY27

Capacity Utilization

  • Forging Capacity: 20,000 tonnes installed capacity at 50-60% utilization
  • Machining Capacity: 1.8 lakh pieces/month at 90-95% utilization

Capital Expenditure (Capex)

  • FY27 Capex Plan: ₹30 crore
  • Funding: 75% debt, 25% internal accruals
  • Focus Areas: 60% allocated to driveline and axle growth areas
  • Capex Goals: Capacity increase and OEE (Overall Equipment Efficiency) improvement
  • Fixed Asset Turnover: Currently 2.6, targeting 2.0 long-term

Management Commentary & Outlook

EBITDA Margin Target:

  • Targeting 20% EBITDA margin over coming quarters
  • Current margin of 16.2% sustainable with further expansion expected

Revenue Growth:

  • Aiming for 20% sales CAGR over next five years
  • Focus on scaling up from current ₹67 crore quarterly revenue level

Market Position:

  • Only forging company offering engine, driveline, and axle components to OEMs
  • Combination of hot and warm forging technologies built over decades
  • Competitive advantages: complex forgings, complete forged and machined parts, deep engineering expertise, multi-decade customer relationships

EV Strategy:

  • Business portfolio "well hedged for fuel-agnostic future"
  • Engine products primarily in heavy commercial and industrial vehicles with long lifecycle
  • Driveline and axle products are EV-agnostic and grow with all vehicle platforms

Debt and Capital Structure

  • Deleveraging trend continues with improved debt-to-EBITDA ratio
  • Plans to raise equity in future with promoter participation
  • Equity proceeds may be used for debt repayment

Raw Material Cost Management

  • Pass-through mechanism with all customers for raw material price changes
  • Received pricing increases from customers for recent raw material rate increases
  • Managing indirect material cost increases (15-30%) through consumption control and customer negotiations

Conference Call Participants

  • Management Representative: Mr. Viraj G. Kalyani, Managing Director (DIN: 02268846)
  • Moderator: Mr. Yash Patil, Investor Relations Manager
  • Analysts/Investors: Mr. Ajit Sethi, Mr. Vanesh, Mr. Saket Kapoor, Mr. Govindraj, Mr. Aniruddha, Mr. Rahul Singh