Financial Performance Highlights

Full Year FY26 (Ended March 31, 2026):

  • Total Revenue: ₹238 crores (flat YoY after phasing out ₹40 crores of non-fit business)
  • EBITDA: ₹31.58 crores at 13.3% margin (up from 11.1% in FY25)
  • Profit Before Tax (PBT): ₹14.37 crores
  • Profit After Tax (PAT): ₹9.32 crores (highest in 14 years)
  • Earnings Per Share (EPS): ₹25.6
  • Capital Expenditure: ₹23.44 crores (excluding ₹10 crores tooling reclassification)

Q4 FY26 (January-March 2026):

  • Total Income: ₹59.24 crores
  • EBITDA: ₹9 crores at 15.2% margin (second consecutive quarter at >15%)
  • Profit Before Tax (PBT): ₹6.13 crores
  • Profit After Tax (PAT): ₹5.88 crores
  • Earnings Per Share (EPS): ₹16.17
  • Interest Cost: ₹0.24 crores (lower due to capitalization of term loan interest)

Operational and Strategic Updates

Margin Improvement Drivers:

  • Exit from low-margin businesses (₹40 crores phased out in FY26)
  • Vriddhi Council projects on cost optimization
  • Plant engineering initiatives improving layouts and efficiencies
  • Improved material and power cost discipline
  • Operational stabilization through machine reconditioning

Business Mix Optimization:

  • Phase 4 (Resource Reallocation) underway with capex aligned to core customers
  • OEM revenues reached ₹37.3 crores (highest in several quarters)
  • Product mix: Engine (60%), Driveline (20%), Axle (10%)
  • Sales growth in passenger cars, trucks, and agro-segments

New Order Wins:

  • EV high-volume axle business worth ₹20 crores annual revenue
  • OEM wheel hub orders from customers like SKF and Schaeffler
  • Additional business allocation from top customers for core engine business

Capital Expenditure and Funding

FY27 Capex Plan: ₹30 crores allocated as:

  • 60% for new growth areas (driveline and axle)
  • ₹5 crores for existing business
  • ₹10 crores for ramp-up business
  • ₹10 crores for new business
  • ₹5 crores for future business

Balance Sheet Position:

  • Property, Plant & Equipment: ₹86.5 crores (vs. ₹60.5 crores last year)
  • Capital Work in Progress: ₹10.3 crores
  • Debt-to-Equity Ratio: 1.11 (targeting 1.0-1.2 range)
  • Fixed Asset Turnover improving toward industry benchmark of 1.5-2

Key Ratios and Targets

  • Return on Capital Employed (ROCE): Improved from 14% in Q1 to 18% in Q4
  • Cash Conversion Cycle: Peaked at 176 days in Q2, now improving sequentially
  • Target CCC: 120-130 days
  • EBITDA Margin Target: 20% by end-FY27 or early-FY28
  • Fixed Asset Turnover Potential: ₹300 crores turnover possible with current asset base

Other Income Details

Q4 other income of ~₹2 crores includes:

  • Government incentives for exports
  • Sale of old/obsolete assets

Governance Initiatives

  • Clean Audit Roadmap in Phase 2 with external consultant engagement
  • Working on SAP data cleanup and control strengthening

Conference Call Participants

Management:

  • Mr. Viraj G. Kalyani, Managing Director (DIN: 02268846)
  • Mr. Anup Sancheti, Company Secretary & Compliance Officer (Moderator)

Analysts/Investors:

  • Mr. Saket Kapoor
  • Mr. Ankur Agrawal
  • Mr. Vansh

Forward-Looking Statements

Management emphasized focus on:

  • Profitable growth in FY27
  • Cash conversion cycle reduction
  • ROCE improvement
  • Sustaining 15%+ EBITDA margins
  • Equity funding preparations based on investor feedback