# 1. Financial Performance ## A. Key Figures * **Revenue:** **₹211 Cr** Q1 FY'26 (+1%) * EBITDA: ₹35 Cr Q1 FY'26 (0% change) · 16.5% EBITDA margin * **PAT:** **₹22 Cr** Q1 FY'26 (+8%) ## B. Revenue Growth * **Resilience Amid Headwinds:** Steady top-line performance maintained despite macroeconomic pressures, subdued auto demand, and weak exports, with growth constrained over the past three quarters by external market turmoil. ## C. Profitability Trends * **Bottom-Line Outperformance:** Net profit rose 8% on strong joint venture contributions and **favorable product mix**, outpacing flat revenue and EBITDA trends. ## D. Margin Performance * **Margin Stability with Upside Guidance:** EBITDA margins held firm at 5% amid scale efficiencies, with management signaling **improvement by year-end** driven by cost control and value-added production. --- # 2. Order Book & Demand ## A. Key Figures * **New Orders Secured:** **INR 580 Cr** (Qtr) ## B. OEM Order Flow * **Strong Pipeline Conversion:** Robust order inflow across geographies and product lines, with focus shifting to efficient execution to drive sustained revenue growth. * **Near-Term Revenue Visibility:** Sufficient backlog in hand—supported by resumption of delayed OEM programs—enabling improved top-line momentum from Q3 onward. * **Growth Diversification:** Active pursuit of new OEMs domestically and internationally; M&M programs ramping from Q3 with **significant growth expected within 12 months**. * **Favorable Segment Tailwinds:** PV and 2-wheeler demand to benefit from festival seasonality, declining inventories, and stabilized OEM production schedules. ## C. New Product Launches * **Strategic Expansion:** Engaged with new domestic OEMs to broaden EV component portfolio and enhance export footprint. --- # 3. Segment Performance ## A. Key Figures * **Forging Division Revenue:** **₹75 Cr** Q1 FY'26 (flat) · **₹325 Cr** expected by year-end * **Gasket Division Sales:** **₹135 Cr** Q1 FY'26 (+2%) · **EBITDA: ₹22 Cr** (+5%) * **Marelli Talbros EBITDA Growth:** **+30%** YoY · **Talbros Marugo EBITDA Growth:** **+26%** YoY * **Marelli Chassis Revenue:** **₹73 Cr** (+6%) · **EBITDA: ₹13 Cr** (+30%) ## B. Forging Division * **EV Segment Resilience:** Strong underlying demand supported by product availability and charging infrastructure, though growth moderated by phased subsidy reductions affecting affordability. * **Volume Pressures in 2W/3W:** Light vehicle segments saw minor volume decline due to OEM inventory corrections and softness in entry-level fuel-efficient bikes. * **Near-Term Export Headwinds:** Q1 revenue flat amid weak European demand, exacerbated by a temporary press breakdown and disrupted BMW schedules; both issues now resolved. * **Recovery in Motion:** Top-line improvement expected from Q2 onward, driven by normalized BMW production, new part number additions, and seasonal CV demand. ## C. Gasket Division * **Steady Growth Trajectory:** Sales and EBITDA expanded year-on-year, reflecting pricing discipline and operational efficiency. * **Strategic Expansion at M&M:** Sealing solutions for heat shields gaining traction; M&M poised to become a **double-digit revenue contributor** within two years. ## D. Joint Venture Results * **JVs Deliver Strong Margins:** Despite forging segment delays, joint ventures posted robust EBITDA growth on value-added, technology-led product mix. * **Marelli Supply On Track:** Capex progressing as planned; commercial supply expected from Q3 with **35–40% growth target reaffirmed**. --- # 4. Capacity & Capex ## A. Key Figures * **Capex Investment:** **₹50 Cr** enabling **₹950 Cr** total capacity (₹350 Cr forging + ₹600 Cr gasket) * **Press Orders:** **~₹10 Cr** for 1,600-tonne press; 4,000-tonne press planned by year-end ## B. Press Capacity Expansion * **Strategic Capacity Build:** New 4,000-ton heavy-duty press targets **larger, higher-value parts** for existing and new OEMs, meeting evolving customer demand. * **OEM Supply Timeline:** Maruti and Stellantis supply from the new facility on track to commence in **Q3**, aligned with project schedule. ## C. Capex Execution * **Execution on Track:** All capex progressing as planned, with no delays; investments actively being deployed. ## D. Utilization Rates * **Sustainable Utilization:** Target operating rate of **85% of peak capacity** remains standard, factoring in product mix and press configuration variability. --- # 5. Export & Geography Mix ## A. Key Figures * **Export Revenue Mix:** **28%** of total revenue (Q) · **Target: 35%** * **UK Export Share:** **56%** of export revenue * **Europe (ex-UK) Export Share:** **27%** of export revenue * **B. S. Export Share:** **13%** of export revenue (**3%** of total revenue) * **U.S. Export Value:** **₹35–38 Cr** (negligible contribution) ## B. European Exposure * **Strategic Geographic Focus:** Export growth concentrated in Europe, with new business expected within 1–2 months and the Stellantis project launching in Q3. * **Natural Hedge:** Diversified export footprint mitigates regional tariff and demand risks, including U.S.-India trade dynamics. * **Indirect Expansion:** Russia-linked business progressing off-book, with commencement expected in Q3. * **No New Regions Beyond Europe:** Management is prioritizing European expansion and not pursuing other geographies currently. ## C. UK & US Contribution * **UK Dominates Exports:** Over half of export revenue comes from the UK, anchored by key customers like JLR and JCB. * **Minimal U.S. Impact:** U.S. exposure is negligible both in absolute value and as a share of total revenue. ## D. New Market Entry * **Resilient Revenue Model:** Balanced mix across OEM, aftermarket, and exports enhances stability amid regional demand fluctuations. * **Offsetting European Slowdown:** Proactive pursuit of new geographies and customer segments to counter softness in European forging demand. --- # 6. Risks & Auto Sector Volatility ## A. Key Figures * **Lost Orders:** **₹2–3 Cr** due to press breakdowns ## B. OEM Project Delays * **Short-Term Sector Slowdown:** Management views auto demand weakness as **cyclical and temporary**, driven by **order delays—not cancellations**, with recovery expected from **Q3 onward**. * **Project Execution Headwinds:** **BMW schedule delays**, **new product launch slippages**, and **OEM EV program postponements** (e.g., Maruti, UK-based client) have disrupted near-term momentum, though tooling and payments are secured. * **Extended Timelines:** Some projects delayed by **nearly a year**, with potential for **additional 3–4 month slippage**, prompting intensified focus on **new customer acquisition** to offset gaps. * **Proactive Mitigation:** Despite **timeline derailments**, company is managing risk through **accelerated business development** and **customer diversification**. ## C. Equipment Breakdowns * **Operational Disruption Contained:** Forging segment impacted by **multiple press failures** (2–3 week downtimes), resulting in lost orders; all equipment now **fully restored**. ## D. Export Execution Risks * **Export Risk Profile Stable:** International operations carry **inherent execution risks**, but these are not materially affecting performance, and confidence in **margin expansion remains intact**. --- # 7. Guidance & Outlook ## A. Key Figures * **FY26 Growth Guidance:** **~15%** (double-digit) · **Not projecting 20%** * **FY27 Revenue Targets:** **₹500 Cr** forging · **₹700 Cr** heat shields ## B. FY26 Growth Target * **Confident Outlook:** Management maintains **double-digit growth** for FY26 at ~15%, signaling resilience despite Q1 headwinds and global macro challenges. ## C. FY27 Revenue Projections * **Timeline Pushback:** FY27 targets remain intact but face a **potential 6–12 month delay** due to market uncertainty and investor caution. * **Strong Pipeline Support:** Forging and heat shield order books underpin FY27 ambitions, with new order announcements expected in the coming months. ## D. Quarterly Recovery Path * **Sequential Improvement Expected:** Outlook turns cautiously optimistic with **Q2 seen stronger than Q1** and **Q3 projected to be very bullish**, driven by delayed OEM order fulfillment. * **Demand Catalysts:** Recovery supported by **festive season strength**, **above-normal monsoons**, and **OEM inventory restocking**, particularly benefiting rural demand. * **Margin Expansion Pathway:** Margins expected to improve on **top-line recovery** and a strategic pivot toward **exports targeting 35% of sales**, which carry **historically better margins**.