Company Disclosure

Management Commentary

Mr. Sudhir Rai, Chairman & Managing Director, commented that Kross Limited maintained strong momentum into Q1 FY27, building on robust recovery in H2 FY26. The company achieved its best-ever Q1 performance with Revenue from Operations of ₹184.3 crore, registering 32% YoY growth. This reflects continued strength in Commercial Vehicle segment supported by favorable macroeconomic conditions and GST rationalization benefits.

Positive momentum from Q4 FY26 continued into the first 45 days of Q1, though demand marginally contracted in later part of May and June due to monsoon season. Demand outlook across all OEMs remains very promising.

Segmental Highlights:

  • M&HCV Segment: Key OEMs Tata Motors and Ashok Leyland reported strong volume growth in Q4 FY26 and April 2026. Demand remained strong in April and May with encouraging volume indications for Q3 and Q4 FY27 despite typical monsoon slowdowns.
  • Trailer Segment: Recorded noticeable volume growth driven by addition of new fabricators and deeper market penetration. Successful launch of Tipping Jacks received very encouraging initial feedback.
  • Tractor & Agri Segment: Delivered healthy growth with ~40% YoY observed in Q1. April 2026 industry data remained encouraging.
  • Exports: Confident of increasing export share over coming years with secured orders from a European Tier-1 player.

Financial Highlights – Q1 FY27

Income Statement Performance (₹ in Crores):

| Particulars | Q1 FY27 | Q4 FY26 | Q1 FY26 | Y-o-Y% |

| Revenue from Operations | 184.3 | 225.4 | 139.4 | 32.3 |

| Cost of Goods Sold | 101.8 | 123.0 | 75.3 | 35.2 |

| Gross Profit | 82.6 | 102.5 | 64.1 | 28.9 |

| Gross Profit Margin | 44.8% | 45.5% | 46.0% | |

| Employee Cost | 10.3 | 11.4 | 9.0 | 14.2 |

| Other Expenses | 49.7 | 57.5 | 38.9 | 27.9 |

| EBITDA | 22.6 | 33.6 | 16.2 | 39.5 |

| EBITDA Margin | 12.2% | 14.9% | 11.6% | 63 bps |

| Other Income | 0.4 | 0.8 | 2.1 | -81.2 |

| Depreciation & Amortization | 3.0 | 2.5 | 2.1 | 46.7 |

| Finance Cost | 2.1 | 1.9 | 2.3 | -9.6 |

| Profit before Tax | 17.8 | 30.1 | 13.9 | 28.5 |

| Tax | 4.5 | 7.6 | 3.2 | 42.4 |

| Profit After Tax | 13.3 | 22.5 | 10.7 | 24.4 |

| Profit After Tax Margin | 7.2% | 10.0% | 7.7% | |

| EPS (Rs.) | 2.06 | 3.48 | 1.66 | 24.4 |

Note: Profit growth was moderate compared to EBITDA growth primarily due to higher depreciation expenses from strategic capital investments.

Business Segment Performance

  • Revenue contribution: 41% from Trailer Axles & Suspension business, 59% from Component business
  • Export sales contributed ~4.5% to Q1 FY27 revenue
  • Targeting full-year export target of 8%

Strategic Initiatives and Capacity Expansion

Axle Beam Extrusion Plant:

  • Commissioned India's first Axle Beam Extrusion Plant using pioneering single-piece extrusion process
  • Commercial production to commence in August 2026
  • Investment: ₹25 Crores
  • Axle volumes increased 34% YoY
  • Capacity increased to 7,500 units/month
  • Expected benefits: Lower material cost (no welding), lighter weight, superior technical performance leading to improved tyre life
  • EBITDA margins expected to improve significantly above 50% utilization
  • Strong export opportunity in Europe & US markets

Tipping Jacks:

  • Precision hydraulic tipping jacks for dumpers & tip trailers launched
  • Facility commissioned with positive initial customer feedback
  • 220 kits produced in Q1 FY27
  • Installed capacity of 800 kits/month
  • Adopting measured ramp-up approach prioritizing product validation and customer satisfaction
  • Expected margins: ~15% on these safety-critical products

Seamless Tube Plant:

  • Construction shed completed, foundation work nearing completion
  • Piercing mill received; sizing and straightening mills on high seas
  • Will manufacture seamless tubes in diameter range of 115–220 mm
  • Investment: ~₹167 Crores
  • Proposed capacity addition: 1,20,000 tons
  • Significant captive requirement for trailer axles and parts manufacturing
  • Will strengthen backward integration, reduce dependence on external suppliers, and lower production costs
  • Surplus capacity to serve demand from high-growth sectors including Oil & Gas

Other Capacity Enhancements:

  • Forging capacity significantly enhanced with commissioning of multiple high-tonnage presses
  • Additional 1000-tonne press ordered
  • High-pressure moulding line (Foundry) on track for completion by September 2026, which will double casting capacity
  • Axle Shaft production by Robotic Forging facility progressing; operational by September 2026
  • Technology upgradation underway in Axle Shaft production

Key Strategies Going Forward

  • Utilizing diverse product portfolio, strong domestic customer base, and backward-integrated facilities to expand into international markets
  • Targeting ~8% of revenue from exports in next two years
  • Targeting 15% of total revenue from agriculture segment in next two years
  • Receiving strong international inquiries and strengthening OEM relationships
  • Secured purchase orders from Sweden-based company and leading European Tier-1 player
  • Focus on continuous cost optimization, backward integration, and higher capacity utilization to improve profitability
  • 100% IPO proceeds deployed; deleveraging balance sheet to fund future capex through internal accruals

Company Overview

  • Over 3 decades of experience in automotive component manufacturing
  • Design, process engineering, forging, casting, and machining capabilities
  • Diversified portfolio of high performance and safety critical components for M&HCV & farm equipment segments
  • One of prominent manufacturers of trailer axles & suspension assemblies in India
  • Served 200+ customers in last 3 fiscals
  • Marquee customers include Tata Motors, Ashok Leyland, VST Coreb, TAFE

Recent Awards & Recognition

  • Super 8 Supplier by Ashok Leyland in FY25 Supplier Samrat Annual Regional Summit
  • Customer Excellence Award from VST Coreb
  • Silver award in Best Performance in Business Alignment by Ashok Leyland in 2023
  • Best supplier of the year award by York, a Tata Enterprise
  • Best supplier award for "Overall Performance" by TAFE
  • Best supplier award for "Consistent Delivery Performance" by TAFE
  • Supplier Excellence Award by VST Coreb (2025-26)

ESG Initiatives

  • Installed 60 KWP Solar Panel in Units V rooftop
  • Entered 3 MW Power Purchase Agreement, installation work to begin soon
  • Blood Donation Camp organized
  • Road Safety Awareness Campaign organized
  • The NEEV – 5KM Run on International Girl Child Day
  • BALA painting in 10 Anganwadis
  • Donation of CNC machine worth ₹10 Lakh to Kashi Sahu College
  • Contribution of ₹5 Lakh toward animal welfare initiatives
  • Donated ₹30 Lakh for Ujjwal Kadam to promote higher education