Nature of the Disclosure

This is a transcript of the Q4 and FY26 Earnings Conference Call for Analysts and Investors, submitted as a regulatory disclosure pursuant to Regulation 30 read with Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Financial Performance Highlights

Full Year FY26 (Ended March 31, 2026):

  • Value Added Revenue (VAR): Grew 12.3% year-over-year (YoY) to ₹49,180 million.
  • Revenue from Operations: Grew 10.5% YoY to ₹54,040 million.
  • EBITDA: Grew 13.5% YoY to ₹9,255 million.
  • EBITDA Margin: Achieved a record 18.8% of VAR, expanding by 21 basis points over the prior year.
  • Profit After Tax (PAT): Grew 9.3% YoY to ₹6,044 million, with a PAT margin of 12.3%.
  • Return on Capital Employed (ROCE): Improved significantly to 94% from 57% in FY25.
  • Fixed Assets Turnover: Improved to 9.6 times from 8.4 times in FY25.
  • Cash Conversion Cycle: Remained strong at negative 23 days.
  • Capital Expenditure: Invested ₹1,150 million during the year.
  • Cash Flow: Generated cash flow equivalent to 58% of EBITDA.

Q4 FY26:

  • Value Added Revenue (VAR): Grew 17.5% YoY to ₹14,058 million.
  • Revenue from Operations: Grew 17.1% YoY to ₹15,524 million.
  • EBITDA: Grew 17.6% YoY to ₹2,573 million.
  • EBITDA Margin: Remained stable at 18.3% of VAR.
  • Profit After Tax (PAT): Grew 18.8% YoY to ₹1,668 million, with a PAT margin of 11.9%.

Segment-wise Performance (FY26)

  • Clean Air and Powertrain Solutions: Revenue of ₹24,296 million, growing 5.5% YoY.
  • Advanced Ride Technologies: Revenue of ₹24,885 million, growing a strong 19.7% YoY.

Strategic and Operational Updates

Order Book:

  • As of March 31, 2026, the lifetime order book stands at ₹124,000 million.
  • This provides 100% visibility of the company's internal revenue target for FY28.
  • Export order book is strengthening and is expected to grow.

New Business Wins & Technology:

  • Advanced Ride Technologies: Received a "Zero Defect Supplier Award" from Toyota. The patented DCx DaVinci advanced mechanical suspension system was adopted by a leading Indian OEM for a next-generation flagship SUV platform. The scope is being expanded with multiple new applications across other OEMs.
  • Clean Air & Powertrain: Won a significant Clean Air program and achieved strategic entry into the bearings systems business with a leading Japanese passenger vehicle OEM. Earlier in Q2, secured a breakthrough win with a leading Japanese PV OEM in India for a Clean Air product. In Q3, booked a strategic program with a leading European commercial vehicle OEM for a tailored aftertreatment solution. Completed a proof-of-concept with a leading European truck OEM for a Euro 7 compliant solution.

Capacity Expansion:

  • Announced capex of approximately ₹1,400 million for two new greenfield plants:
  • A Clean Air facility in North India (announced Q3 FY26).
  • An Advanced Ride Technologies plant in West India (announced Q4 FY26).
  • These investments are to support future demand from new order wins.

Balance Sheet & Capital Structure:

  • The company is debt-free with a net debt-to-equity ratio of negative 0.4.
  • The strong balance sheet provides ample financial flexibility.

Exports Strategy:

  • Current exports represent 5-6% of sales.
  • The export order book is between 14-20% of the total, driven by technology equalization, supply chain diversification (China+1), and improving labour cost arbitrage.
  • Exports are expected to ramp up significantly, with critical mass expected around the 2028 timeframe.

Localization & Margins:

  • Localization is at ~90% and is a key strategy for sustaining margins.
  • Margin expansion is attributed to the P3 operating model (People, Performance, Pride), which drives operational efficiencies, cost discipline, and commercial recoveries.

Outlook:

  • The company enters FY27 with strong visibility from its robust order book and a resilient financial foundation.
  • It is focused on sustaining profitable growth and creating long-term value.

Management Participants

  • Mr. Arvind Chandrasekharan – Whole-Time Director and Chief Executive Officer
  • Mr. Mahender Chhabra – Chief Financial Officer
  • Mr. Himanshu Sharma – Head, Investor Relations