# 1. Financial Performance ## A. Key Figures * Revenue: ₹1,122 Cr 9M FY'26 (+6.2%) · ₹391 Cr Q3 FY'26 (+10.4%) * **PAT:** **₹218 Cr** 9M FY'26 (+8% adj.) · **₹79 Cr** Q3 FY'26 (+3%) * **EBITDA:** **₹337 Cr** 9M FY'26 (+8%) · **₹120 Cr** Q3 FY'26 (+7%) * **Gross Profit:** **₹663 Cr** 9M FY'26 (+5%) · **₹230 Cr** Q3 FY'26 (+2%) * **Cash Flow from Operations:** **₹315 Cr** 9M FY'26 ## B. Revenue Growth * **Resilient Top-Line Performance:** Revenue growth sustained despite macro headwinds including soft steel prices and weak global demand, underscoring operational resilience. * **Strategic Execution:** Growth supported by advanced engineering capabilities and operating scale, with strong fundamentals evident in consistent delivery. ## C. Profit Margins * **Margin Expansion Achieved:** EBITDA margin reached a new high of **8% in Q3**, driven by operating leverage and favorable product mix. * **Gross Margin Resilience:** Margins improved YoY despite **3% lower realizations**, as raw material cost declines outpaced price erosion and mix optimization boosted profitability. * **Value-Added Product Shift:** Higher sales of forged products and new product introductions contributed to better realization rates and cost efficiency. ## D. Balance Sheet * **Strong Liquidity Position:** Liquid assets exceed **₹400 Cr**, enabling self-funded growth and reinforcing financial flexibility. * **Stable Working Capital:** Disciplined management maintained stable working capital levels, supporting cash conversion efficiency. ## E. Cash Flow * **Robust Operating Cash Flow:** Strong cash generation of ₹315 Cr in 9M reflects reduced working capital intensity and an expanding margin profile. --- # 2. Volume & Product Mix ## A. Key Figures * Q3 Volume Growth: 13.8% YoY (broad-based strength) * **9M Volume Growth:** **6%** YoY * **Industrial Segment Volume Growth:** **2%** YoY ## B. Segment Volumes * **Broad-Based Demand:** Strong YoY volume growth across commercial vehicles, farm equipment, and passenger vehicles underpins overall outperformance despite modest industrial segment expansion. * **Growth Trajectory:** Q3 growth significantly above 9M average, indicating accelerating momentum in core end-markets. ## C. Realization Trends * **Mix Pressure on Realizations:** Sequential dip of ~5% driven by shift toward **forged products**, which now represent **2%** of sales mix versus prior 5%. --- # 3. Segment & Revenue Mix ## A. Key Figures * **CV Segment Revenue Mix:** **37%** of operating revenue (9M FY26) * **Farm Equipment Revenue Mix:** **33%** of operating revenue (9M FY26) * **Domestic CV & Farm Revenue Mix:** **55%–57%** of total revenue * **Industrials Revenue Mix:** **14%** of operating revenue (9M FY26) * **Off-highway Revenue Mix:** **11%** of operating revenue (9M FY26) * **PV Segment Revenue Mix:** **5%** of operating revenue (9M FY26) * **CV Exports:** **10%–12%** de-growth (Europe & U.S.) * **PV Revenue Growth:** **~37% YoY** (domestic & export) ## B. CV & Farm Revenue * **Core Growth Engine:** Domestic CV and farm equipment remain the dominant revenue drivers, contributing over half of total revenue with strong double-digit value growth and volume momentum. * **CV Demand Recovery Signs:** CV segment maintained leadership in revenue mix, supported by GST benefits, infrastructure push, and sustained freight activity; global cycle may be bottoming out after prolonged weakness. * **Farm Resilience with Near-Term Caution:** Farm equipment showed robust demand on favorable monsoons and rural cash flows, though recent decision-making has slowed due to OEM cost-cutting, particularly in North America. ## C. Industrial Contribution * **Stable & Diversified Demand:** Industrials delivered consistent performance, driven by power, renewables, railways, and digital infrastructure, with positive outlook from India’s energy and rail modernization trends. * **Export Margin Improvement:** Industrial export margins expanded due to stronger demand for heavy forged components, despite lower realizations than crankshafts, signaling value-add potential. * **Strategic Mix Shift:** Management expects meaningful increase in contribution from industrials, EVs, and export-linked segments, enhancing revenue diversification and profitability. ## D. Off-highway Performance * **Segment Under Pressure:** Off-highway faced de-growth domestically and internationally due to project delays and weak infrastructure execution, with challenging market conditions persisting in the U.S. and Europe. * **Margin Stability with Upside Potential:** Realizations held firm despite lower input costs; future improvement expected as higher value-add applications scale. ## E. PV Segment Growth * **High-Growth Emerging Segment:** PV revenue grew nearly 37% YoY, with strong momentum in both domestic and export markets, now approaching mid-single-digit revenue share. * **Export Ramp-Up Begins:** PV exports currently minimal (1%) but poised for growth, with shipments commencing only in December, indicating early-stage expansion. --- # 4. Capacity & Utilization ## A. Key Figures * **Machining Capacity:** **68,000 MT** (Q3 FY'26) · to reach **82,000 MT** by FY'27 * **Forging Capacity:** To expand to **150,000 tons** by FY'27 · **180,000 tons** expected by FY'28 * **Machining Expansion:** **+10,000 tons** by FY'29 via two 5,000-ton lines * **Solar Project Savings:** **₹25–30 Cr** annually upon commissioning ## B. Forging Expansion * **Strategic Capacity Buildout:** Forging and machining capacity being scaled in phases, with major press additions (10,000-ton and 4,000-ton) driving future volume growth in industrial and CV segments. * **Funding & Financial Discipline:** Expansion fully funded through internal cash flows, reflecting strong working capital management and business model resilience. * **Export Program Ramp-Up:** Production ramp already underway for U.S. genset and EV export programs, with EV shipments commencing in December and PV exports requiring inventory build by September. * **Power Cost Optimization:** Solar project commissioning in Q3 next year to deliver **significant annual cost savings**, though winter seasonality in North India will delay peak production until mid-February. ## C. Machining Capacity * **Targeted High-Value Expansion:** New machining lines to support large crankshafts and diversify into wind energy components, enabling growth in high-margin, low-capex product segments. ## D. Plant Ramp-up Timeline * **Phased Utilization Ahead:** New plant capacity to come online partially in FY'28, with meaningful volume contribution expected only in FY'29. --- # 5. Order Book & Growth Pipeline ## A. Key Figures * **Incremental Order Wins:** **₹800 Cr** peak annual business (FY '27 start) · **₹620 Cr** additional orders (18–20 month ramp-up) * **Order Book Mix:** **44% industrial**, **27% commercial vehicles**, **24% passenger vehicles**, **4% farm equipment** * **Export Share:** **~25%** of finished goods sales ## B. INR800 Crore Wins * **Near-Term Execution Clarity:** Majority (80–85%) of the ₹800 Cr incremental business expected to be executed by **FY '28**, with capacity plans aligned for rapid ramp-up. * **Diversified Sector Exposure:** Order wins span industrial, CV, PV, and farm segments, reducing concentration risk and supporting balanced growth. * **Phased Revenue Recognition:** High horsepower and heavy component projects will contribute meaningfully from **FY '28 onward**, extending revenue visibility into FY '29. ## C. Export-linked Orders * **Export Diversification Accelerating:** Nearly **two-thirds of upcoming business** tied to export markets, underpinned by structural demand in U.S. industrial gensets, EVs, and PV sectors. * **Global Share Shift Opportunity:** India positioned to gain U.S. market share from China and Brazil (current 50% combined hold), particularly in industrial supply chains seeking de-risking. * **Early Export Stabilization:** Export-linked revenues flat YoY but show **modest sequential improvement**, with new duty regime prompting initial U.S. market inquiries. ## D. Heavy Component Bookings * **Strategic Capacity Buildout:** ₹180 Cr in signed heavy engineering orders, with marketing ramp-up expected post **June–July equipment installation**. * **Long-Term Revenue Backlog:** High horsepower segment bookings secured, with revenue contribution back-ended to **FY '28 and beyond**, reflecting project complexity and lead times. --- # 6. Risks & Pricing Exposure ## A. Key Figures * **Steel Cost Pass-Through:** **85%** of business with **1-month domestic lag** and **1-quarter export lag** * **Alloy Steel Price Impact:** Expected increase of **₹3–₹4 per kg**, pending OEM negotiations * **Scrap Cost Exposure:** Direct impact on **EBITDA**; not passed through to customers ## B. Steel Cost Lags * **Pricing Asymmetry:** Majority of business has steel cost pass-through, but lags create margin timing mismatches, especially for exports. * **OEM-Led Pricing:** Alloy steel prices set with delay and subject to retrospective adjustments driven by key customers like **Tata Motors**, insulating from daily volatility. * **Inventory Drag:** Minmax inventory policies for European OEMs and prior destocking are delaying revenue realization from recent market improvements. ## C. Scrap Price Impact * **EBITDA Sensitivity:** Rising scrap prices expected to boost realizations in new contracts, reversing prior-year tailwinds from falling scrap. * **Upward Price Momentum:** Recent increases in steel, TMT, and scrap point to likely **higher alloy steel price settlements** in upcoming cycles. ## D. Export Tariff Uncertainty * **Demand Visibility Improved:** Tariff clarity has enhanced full-year export planning, despite earlier weakness in end markets. --- # 7. Guidance & Outlook ## A. Key Figures * **Capex (9M FY26):** **₹300 Cr** incurred · **Capex Guidance:** **₹400–500 Cr** for FY26 · **₹400 Cr** (ex-solar) / **₹480 Cr** (incl. solar) for FY27 * **B. S. Revenue Exposure:** **7–8%** of total business, expected to reach **15–16%** in coming years * **Solar Project Annual Benefit:** **₹25–30 Cr** starting Q3/Q4 next year * **Volvo 2026 Demand Outlook:** **~10% increase** projected for heavy-duty truck market ## B. FY27 Export Ramp * **Export Recovery Path:** Sequential improvement in Q3 signals momentum toward a strong FY26 close, with export ramp expected to begin in **Q2 of FY27**, supported by stabilizing OEM demand in CV and farm equipment. * **Geographic Expansion:** U.S. revenue set for meaningful expansion driven by upcoming CV, PV, and industrial program ramps, reflecting strategic diversification. * **Market Stability:** European and U.S. farm equipment markets seen as broadly stable in 2026, while domestic demand remains resilient, laying foundation for international recovery. * **Solar Contribution Timeline:** Captive solar project on track to deliver partial benefits in FY28 and full impact thereafter, though specific power contribution % remains undisclosed. ## C. Margin Range View * **Medium-Term Margin Guidance:** EBITDA margins expected to sustain within a **29–31%** range, with a **28–32%** band accounting for mix, input costs, and capacity changes—upside from better export mix and lower scrap prices. ## D. Capex Plan * **Strategic Capex Execution:** Heavy component capex on track; ~75% of FY26 spend already deployed, targeting high-growth capability buildout. * **Solar Investment Impact:** 80-acre captive solar plant under long-term lease to drive cost savings and ESG alignment, with **₹25–30 Cr** annual benefit expected from next fiscal’s second half.