Financial Performance Summary

Q1 FY27 Consolidated Results:

  • Revenue: ₹10,213 million (highest-ever quarterly revenue), representing 33% year-on-year growth
  • EBITDA: ₹1,961 million, showing 48% year-on-year growth
  • EBITDA Margin: 19.2% (expanding by approximately 200 basis points from 17.2% in Q1 FY26)
  • PAT: ₹874 million, up 39% year-on-year
  • PAT Margin: 8.6%
  • Other Income: ₹134 million, up approximately 15% year-on-year

Exceptional Items:

  • Provision of ₹126 million for U.S. import duty tariff incurred in previous year (amounts remain recoverable)
  • Exceptional charge of ₹169 million towards settlement of litigation matter in U.S. District Court (disclosed in 2021 prospectus, settled without admission of liability)
  • Adjusted PAT excluding exceptional item (post-tax impact of ₹127 million): ₹1,000 million
  • Adjusted EBITDA margin excluding exceptional items: 20.4%

Segmental Performance

Non-Auto Segment:

  • Revenue: ₹1,998 million (highest-ever quarterly sales)
  • Year-on-year growth: 129.9%
  • Contribution to overall sales: 20.8%

ADS Business (within Non-Auto):

  • Revenue: ₹1,454 million (includes product sales, scrap sales, and tooling income)
  • Year-on-year growth: More than three times

Auto Tech-Agnostic and xEV Business:

  • Revenue: ₹1,316 million (highest-ever quarterly sales)
  • Year-on-year growth: 22.2%

Auto ICE Segment:

  • Revenue: ₹6,275 million
  • Year-on-year growth: 20.8%
  • Record quarterly performance across passenger vehicles, commercial vehicles, and scooters

Order Book Position

ADS Business Order Backlog:

  • Cumulative unexecuted lifetime order book for five years: ₹44.4 billion as of quarter end
  • Current order backlog (including Q2 orders): Approximately ₹57.5 billion
  • New semiconductor equipment manufacturer order: Approximately ₹1,250 crores over five years
  • Expected annual business from this customer: Approximately $75 million
  • Orders executable over next five years (by FY2031)

Non-ADS Business Order Book:

  • Peak annual revenue of new business (excluding ADS): ₹18.5 billion as of June 2026

Capacity Expansion and Capex Plans

ADS Division Expansions:

  • Recently inaugurated surface treatment facility next to ADS plant (awaiting NADCAP validation)
  • Relocating defense business to dedicated facility for focused infrastructure
  • Building new 80,000 square foot hangar for aero and SEM business (lines installation and validation in coming quarters)
  • Planning build-to-suit facility adding 100,000 square foot manufacturing space

Auto Division Expansions:

  • Pantnagar (Plant 6): Additional forging and machining capabilities for crankshafts (two-wheeler and passenger vehicle OEMs) and connecting rods (passenger vehicle OEMs)
  • Manesar (Plant 4): Additional forging and machining capabilities
  • Bangalore (Plant 2): Augmenting machining capacity with focus on Auto Tech-Agnostic and xEV components
  • Sansera-Nichidai joint venture enhancing cold and warm forged precision components

Capacity Timeline:

  • Projects to come on stream beginning Q3 FY27 onwards
  • Completion within one year from August 2026
  • Existing ADS facility with extended hangar expected to generate revenue of ₹1,400-1,500 crores
  • Defense facility expected capacity: ₹500 crores revenue over five years
  • New facility (110,000 sq ft) expected capacity: ₹1,500 crores revenue
  • Total ADS capacity target by FY31: ₹3,500 crores revenue

Defense Business Update

  • Precision machined components for ISRO, HAL, and exports to Israel
  • Pursuing large order wins in defense space for European customers
  • Planning entry into sheet metal capabilities for defense and aerospace applications
  • New dedicated defense facility being established

Growth Guidance and Outlook

FY27 Guidance:

  • High-teens top-line growth
  • Focus on improving margin profile
  • Expected growth breakdown: Non-ADS business mid-teens growth, ADS business 75-80% growth
  • Possible overall revenue growth between high-teens to 20%

Long-term Targets:

  • Revenue target of ₹8,000-9,000 crores by FY2031
  • Margin target: Working towards 20-20-20 targets
  • Focus on sustaining current margin levels while growing

Market Trends and Business Environment

Industry Trends:

  • Domestic auto OEM customers experiencing hyper-growth and high vehicle volumes
  • Supply chain consolidation favoring better capitalized, more capable suppliers
  • Export markets showing traction returning to normal growth trajectory
  • Strong demand visibility in two-wheeler and passenger vehicle segments for next 1.5 quarters
  • Stress on supply chain due to capacity constraints

Margin Drivers:

  • Operating leverage from revenue scaling
  • Disciplined cost absorption
  • Favorable product mix offsetting inflationary pressures
  • Higher international revenue contribution (approximately 40% in Q1)
  • Currency advantages

Material Cost and Pricing

  • Material cost increase primarily in aluminum and some consumables
  • Limited steel inflation
  • Engaging with customers for pass-through of material inflation (not yet materialized)
  • Higher labor costs impacting Northern plants
  • Customer engagements ongoing for compensation of higher costs

Financial Discipline

  • Capex program phased with customer validations, order visibility, and expected utilization
  • Focus on meeting internal return thresholds
  • Strong balance sheet with low leverage levels
  • Funding growth-led capex through internal accruals
  • Monitoring working capital closely (receivables and inventory)
  • No immediate need for additional fundraise
  • Open to inorganic opportunities in non-auto segments

Specific Project Updates

Blisk Program:

  • Prestigious order announced in previous earnings call
  • Significant progress in preparation for machining
  • First samples expected for customer in one month from August 2026

U.S. Facility:

  • Connecting rod manufacturing facility planning continues
  • Increased sourcing from India facilities as stop-gap arrangement due to tariff confusion

Risk Factors

  • Geopolitical environment challenges
  • Cost inflation pressures
  • Supply chain constraints
  • Customer validation timelines for new facilities
  • Semiconductor industry dependency on AI demand cycle
  • Aerospace industry risks (though considered lower)