Key Financial Figures

  • Q1 FY27 Net Sales: ₹427 crores (vs. ₹369 crores YoY, +16% growth)
  • Q1 FY27 EBITDA: ₹82 crores (18% margin)
  • Q1 FY27 PBT: Growth of 30% YoY (excluding one-time items)
  • Land Sale Profit: ₹64 crores gross, ₹58 crores net profit (not included in operational EBITDA)
  • Sales per ton: ₹202,000 (vs. ₹193,000 previously)
  • Volume Q1 FY27: 20,200 tons

Geographic Revenue Mix

  • Domestic: 63.5% (vs. 61% YoY)
  • Exports: 36.5% (vs. 39% YoY)
  • Regional breakdown: USA 18%, South America 4%, Europe 14%, Others 1%

Segment Revenue Mix

  • Commercial Vehicles: 71%
  • Passenger Vehicles: 14%
  • Agri and Off-highway: 14%
  • Others: 1%
  • Machining vs Forging: 67% machining, 33% directly forged
  • Heavy holdings: 42% of sales (vs. 43% previous year-end)

Operational Updates

  • Capacity Utilization: Targeting 90,000+ tons in FY27 (Q2 onwards: 23,000-25,000 tons/quarter)
  • Capex Plan: ₹150 crores for FY27 (₹30-50 crores replacement/debottlenecking, remainder growth)
  • New Equipment: 16,500-ton press expected by Q4 FY27; 4,000-ton press recently operational
  • Automation Investment: ₹7.5-10 crores to date, expected to reach ₹30-50 crores by FY27-end
  • Machining Investment: ₹1,100 crores total (₹625 crores in last 5 years, ₹1,000 crores in last 10 years)

Debt and Capital Structure

  • Gross Debt: Maintained at ₹750-800 crores level
  • Debt Repayment: ₹170 crores planned for FY27, with similar drawdown for investments
  • Land Sale Proceeds: ₹60 crores realized, used for working capital reduction and capex
  • QIP Consideration: Board resolution passed, to be considered for appropriate opportunities

Management Guidance

  • FY27 Revenue Target: ₹1,800-1,900 crores (18% growth over FY26's ₹1,600 crores)
  • Volume Target: 90,000+ tons in FY27, targeting 100,000-110,000 tons in subsequent years
  • Margin Target: Aiming for 20%+ EBITDA (current 18%), targeting 2-3% improvement
  • Machining Mix: Expected to remain at 65-68% range

Market Commentary

  • Domestic Demand: Strong CV, tractor, and passenger car markets
  • Export Markets: Strong traction in USA (Class 8 trucks), South America growing
  • New Business: Hyperscaler-related business generating demand; Abhinava Rizel customer at SOP stage
  • EV Business: Supplying components for electric vehicles across platforms (excluding two-wheelers)

Cost and Operational Challenges

  • Power & Fuel Costs: Elevated in Q1 due to West Asian conflict and Tamil Nadu power policy
  • Labor Costs: Increased due to April increments and additional hiring
  • Other Expenses: Increased 35% YoY due to higher export freight costs (Strait of Hormuz impact)
  • Labor Availability: April-May hampered by labor shortage, resolved by June with new hires

Strategic Initiatives

  • Working Capital Management: Using AI tools to optimize inventory and reduce WIP
  • Productivity Improvement: Focus on debottlenecking and operational efficiency
  • Market Expansion: Exploring non-auto industrial applications and metalworking opportunities
  • Capacity Expansion: Targeting ₹400 crores growth capex for future expansion