Detailed Summary

Financial Performance Highlights

Q2 FY27 Performance:

  • Revenue: ₹10,915 million (32% YoY growth) - highest ever quarterly revenue
  • EBITDA: ₹2,112 million (48% YoY growth)
  • PAT: ₹1,086 million (52% YoY growth)
  • EBITDA margin: 19.4%
  • PAT margin: 10%
  • Gross margin: 43% (180 basis points expansion)

H1 FY27 Performance:

  • Revenue: ₹21,127 million (33% YoY growth)
  • EBITDA: ₹4,073 million (48% YoY growth)
  • PAT: ₹1,960 million (46% YoY growth)
  • Normalized PAT (excluding Q1 litigation settlement): ₹2,087 million

Cost Structure and Pressures

  • Employee costs: ₹1,469 million (25% increase, includes ₹167 million provision for Karnataka minimum wage revision)
  • Other expenses: ₹1,114 million (41% increase due to higher scale and freight costs)
  • Depreciation: ₹602 million (20% increase)
  • Finance cost: ₹146 million (from ₹81 million last year)
  • Cost pressures from West Asia conflict impacting cutting tools, freight, and logistics
  • Minimum wage revision in Karnataka adding to cost pressures

Business Segment Performance

Auto ICE Business:

  • Quarterly sales: ₹6,697 million (18% YoY growth)
  • Growth across passenger vehicles, two-wheeler motorcycles, and scooters
  • Auto-Tech Agnostic and xEV business: ₹1,363 million (best-ever quarter)
  • Non-automotive segment contributed 20.9% of total sales

ADS Business (Aerospace, Defense, Semiconductor):

  • Q2 revenue: ₹1,643 million
  • H1 revenue: ₹3,097 million
  • Cumulative unexecuted lifetime order backlog: ₹58.7 billion (executable over next 5 years)
  • Non-ADS business order book: ₹22.4 billion (peak annual revenues)

Capacity Expansion and Capex

  • FY27 Capex projection increased to ₹8,000 million
  • Approximately 50% (₹400 crores) allocated to ADS business
  • Defense dedicated facility expected to begin operations towards end of Q3 FY27
  • Sansera-Nichidai JV commercial production expected towards end of H2 FY27
  • New 120,000 sq ft facility being set up near existing facility

Order Book Development

  • ADS backlog increased from ₹44.4 billion in June to ₹58.7 billion in September
  • Non-ADS order book increased from ₹18.5 billion to ₹22.4 billion
  • Large multi-year semiconductor order included in ADS backlog
  • Order book includes new customers in aerospace business
  • Progress on adding second semiconductor customer expected in Q3

Working Capital and Balance Sheet

  • Operating cash flow H1: ₹2,073 million
  • Working capital: ₹8,544 million (from ₹7,359 million in March)
  • Working capital represents 19.6% of annualized Q2 revenue
  • Net debt: ₹2,612 million (from ₹604 million in March)
  • Leverage: 0.3x of annualized H1 EBITDA

Strategic Initiatives and Outlook

  • Auto ICE now accounts for about 65% of sales
  • Targeting 35-40% of overall revenue from ADS by end of decade
  • Exploring new sectors including medical equipment manufacturing and humanoid components
  • Defense business being given strategic push with separate facility
  • Sheet metal division contemplated under defense vertical
  • Renewed vision statement expected by year-end
  • Full year revenue guidance: ₹4,250-4,300 crores

Management Participants

  • B.R. Preetham - Joint Managing Director and Group Chief Executive Officer
  • Vikas Goel - Chief Financial Officer
  • Hari Krishnan - Chief Executive Officer, ADS Division
  • Rahul Kale - Chief Executive Officer, Automotive
  • Praveen Chauhan - Head Corporate Strategy