Revenue from Operations: Stood at ₹1,405 crores, representing a growth of 54.9% year-on-year (YoY) compared to ₹908 crores in Q2 FY26. Sequentially, revenue was higher by 15.5% compared to ₹1,217 crores in Q1 FY27.
EBITDA (ex-other income): Stood at ₹256 crores compared to ₹123 crores in Q2 FY26 and ₹218 crores in Q1 FY27.
EBITDA Margin: Improved to 18.23% for the quarter compared to 13.5% in Q2 FY26 and 17.96% in Q1 FY27. The improvement is attributed to operating leverage from improved capacity utilization, a better product mix, and operating efficiencies.
Profit Before Tax (PBT): Stood at ₹95 crores compared to a loss of ₹(10) crores in Q2 FY26 and a profit of ₹65 crores in Q1 FY27.
Profit After Tax (PAT): Stood at ₹71 crores, higher by 47% on a quarter-on-quarter (QoQ) basis.
Debt Reduction: Net debt was reduced by ₹126 crores during H1 FY27. The company maintains its guidance of a reduction in total debt by ₹500 crores for the full FY27.
Finance Cost: The company is paying an interest cost of ~8%. A reduction of ₹500 crores in debt is expected to reduce annual finance cost by ~₹40 crores.
Operational and Business Updates
New Order Wins (Q2 FY27): The company secured new orders worth ₹673 crores across Commercial Vehicles (CV), Light Vehicles (LV), Electric Vehicles (EV), and Farm Equipment segments. These orders have a program life of approximately 4 years.
Geographic Split: 48% from the domestic market, 52% from the export market.
Segment-wise Split: ₹304 crores from Commercial Vehicles, ₹272 crores from Light Vehicles, ₹90 crores from Farm Equipment, and ₹7 crores from Electrical Vehicles.
Casting Business: Orders worth ₹447 crores were from the casting side of the business, of which ₹272 crores is for the North American export market for light vehicle applications.
Capacity Utilization: The company is focusing on improving utilization of recently expanded capacities. Capacity utilization in new lines like aluminum forgings (3,000-ton capacity) and cold forgings is above 50%.
Railway Wheels JV: The first batch of 300 wheels is ready and under inspection by Indian Railways as of the call date (30 Oct 2026). Commercial production is expected to begin in December 2026, with a target of supplying 20,000-25,000 wheels in FY27. At optimum utilization, the JV is expected to achieve an EBITDA margin of 18-20%. An approval for a ₹56 crore investment for the second phase (machining capability) was mentioned, with the total project cost remaining intact.
Capex Guidance: FY27 capex guidance is revised upwards to ~₹550 crores for the entire group (from ₹350 crores guided in Q1), focused on value-add capacity and machining capabilities. An additional ~₹160 crores is planned for the second half. For the JV, an investment of ₹15-20 crores is pending for H2 FY27, with the remainder (~₹35 crores) planned for FY28.
ROCE Guidance: The company expects to achieve an ROCE of 12-15% by the end of FY27 and aspires to reach 20% ROCE in FY28.
Market Outlook and Management Commentary
Domestic Economy: Noted as demonstrating strong growth momentum, with healthy GST collections (~₹6.15 lakh crores in Q2) and strong Industrial activity (IIP growth of 7.4% in July and 8% in August). The automotive sector witnessed strong demand with CV and PV sales growing by 28.7% and 30.7% respectively during Q2 FY27.
Global Environment: Acknowledged as challenging due to geopolitical tensions, potential new tariffs, supply chain dynamics, currency movements, rising input costs, and a sharp rise in shipping costs.
Business Outlook: Management remains positive, citing a healthy order pipeline and a diversified product portfolio. The focus is on high utilization of existing capacity, improved product mix, and operational discipline to support growth and profitability. The passenger vehicle segment is highlighted as a key growth lever.
Margin Outlook: Management aspires to cross previous peak margins (20-22%) but did not provide a specific timeline, noting that margins are expected to expand by 30-50 basis points each quarter. Consolidated margins are slightly muted due to the inclusion of the lower-margin casting business.
Q&A Session Key Points
Input Costs & Pass-through: A net negative impact of ₹6-7 crores was incurred in Q2 due to raw material price increases. Domestic steel price hikes are fully passable to customers. In export markets, pass-through varies by contract and region.
Shipping Costs: Significantly increased YoY, with a net negative impact of ₹8-9 crores for the company in Q2 after partial pass-through to customers. Costs have settled but remain elevated.
Subsidiary Performance: Improved performance was attributed to the casting and oil & gas businesses. Margins at the subsidiary level are clarified to be around 16-17%, similar to the standalone business.
Export Growth: The strong growth in North America is attributed to a V-curve recovery in demand and new order wins for new product launches, not vendor replacement. The growth is considered sustainable.
New Ventures: Progress is ongoing in new ventures involving non-ferrous components (aluminum, titanium, Inconel, Niobium) for aerospace, robotics, and semiconductors. Discussions are reportedly directly with OEMs for aerospace engine and frame components.
Working Capital: Net working capital increased by ~₹140 crores in H1 due to volume growth and shipping delays causing a build-up in inventory that had not yet converted to debtors. The company is working to improve working capital days.
