# 1. Financial Performance ## A. Key Figures * Revenue: ₹2,288 Cr consolidated (+10.2%) · India +12.3% YoY * 9M Top-line Growth: ~8% · EBITDA: 9.3% · PBT: 4.2% (+33% YoY in absolute) * Q3 EBITDA: 9.3% margin · PBT: ₹101 Cr (+53% YoY) * **Net Debt:** **₹441 Cr** (up due to VRS outflow) · **Gross Debt: ₹750 Cr** (incl. ₹300 Cr cash) ## B. Revenue Growth * **Broad-Based Production Uptick:** Indian auto production rose strongly YoY across all segments, led by **15% growth in 2-wheelers**, supporting volume tailwinds. * **Seasonal Slowdown:** Sequential revenue softness in 2W/3W offset by **robust PV and CV growth**, consistent with model transitions and seasonal patterns. * **Lighting Strength:** India lighting revenue showed **strong double-digit momentum**, outpacing overall auto production trends. ## C. Profit Margins * **Margin Expansion with Operating Leverage:** India EBITDA and PBT margins improved to **9% and 6%**, driven by cost controls and efficiency gains, with sustainability expected. * **One-Time Costs, Structural Gains:** Q3 impacted by **₹103 Cr exceptional items** (labour code + VRS), but **annual savings of ~₹20 Cr** expected from workforce optimization. * **Input Cost Pass-Through:** Margin pressure from raw material and FOREX headwinds largely mitigated via pricing, though **product and market mix** remain moderating factors. ## D. Balance Sheet * **Debt Rebound Temporary:** Net debt increase attributed to **one-time VRS payout**, reversing prior deleveraging; balance sheet remains resilient with **target of zero debt by FY'27 end**. * **Liquidity Position:** Strong cash buffer of **₹300 Cr** within gross debt structure enhances financial flexibility despite near-term land acquisition outflows. ## E. Cash Flow * **Stable Interest Outgo:** 9M interest expense near **₹100 Cr**, with no material reduction expected by year-end, indicating steady financing costs. --- # 2. Order Book & EV Mix ## A. Key Figures * EV Revenue Share: 14.3% in Q3 (+53% YoY) · 12.1% in 9M (+38% YoY) * **EV Order Book:** **75%** of total orders * **New Business Wins:** **>₹2,000 Cr** annual peak revenue potential (74% EV-related) · **₹982 Cr** to reach SOP this year * **Net New Wins (9M):** **₹20.6 Cr** annualized peak revenue from High-Voltage Electronics, Lighting, and EV wins ## B. EV Order Share & Growth Trajectory * **Dominant EV Order Pipeline:** EVs represent three-quarters of total orders despite modest revenue contribution, signaling strong future revenue conversion and product competitiveness. * **4-Wheeler EV Momentum:** Recent BEV lighting win and high-voltage PCBA order for global OEMs highlight growing traction in higher-value 4-wheeler and export-oriented EV segments. * **Overseas Expansion:** Romania and Thailand operations advancing; management expects improved overseas revenue from new launches and sourcing shifts. ## C. New Business Wins & Diversification * **Record New Wins:** Achieved highest-ever 9-month order intake with **>₹2,000 Cr** peak revenue potential, heavily skewed toward EV motors and high-growth electronics. * **Customer Diversification Accelerating:** Secured wins with non-Bajaj OEMs—including top-tier and emerging electric 2-wheeler leaders—reducing concentration risk and expanding market reach. * **Lighting Segment Strength:** Two major new lighting wins (India + overseas) and growing profitability in overseas markets signal resilience and diversification beyond legacy customers like Piaggio. ## D. Strategic Enablers * **Global Trade Tailwinds:** India’s enhanced trade agreements with the EU and U.S. bolster its position as a trusted global supply chain hub, supporting export ambitions. --- # 3. Segment & Geography Mix ## A. Key Figures * **India Revenue Share:** **89%** of total revenue (**11%** overseas) * **2- & 3-Wheeler Revenue Mix:** **76%** of portfolio * **Bajaj Customer Share:** **46%** of revenue * **India Business Growth:** **12%** top-line (+30% EBITDA, >80% PBT) * Segment Growth (9M FY'26): 2-wheelers +8.8%, 3-wheelers +21.1%, PVs +9.8%, CVs +10.4% * **EV Revenue Growth:** Nearly **53%** YoY ## B. India vs Overseas * **Dominant Domestic Scale:** India remains the core engine of growth, delivering strong double-digit top-line and robust profit growth despite macro and customer-specific headwinds. * **Overseas Turnaround in Progress:** International operations face near-term challenges including market share loss and premium 2-wheeler de-growth in **Vietnam and Italy**, but new program launches are expected to drive revenue growth next fiscal. * **Targeted Export Expansion:** Over **90% of current revenue from India**, with strategic focus on scaling exports via select overseas plants; **Europe** is a key export market with recent deals enhancing opportunity pipeline. ## C. 2-Wheeler vs 4-Wheeler * **2-Wheeler Lighting Rebound Underway:** After three years of de-growth, the 2-wheeler and premium lighting business is projected to **double**, with Vietnam operations driving profitability and minimal current contribution from Romania and Thailand. * **4-Wheeler Growth Inflection Ahead:** 4-wheeler segment in **Romania and Thailand** expected to scale significantly, while overseas 2-wheeler business is already profitable and IMES segment undergoing corrective actions for EBITDA recovery. * **EV Momentum Outpacing ICE:** Despite India business growth lagging industry average due to ICE headwinds, EV revenue surged with **nearly 53% growth**, entirely driven by Bajaj, signaling strong transition traction. ## D. Auto vs Non-Auto * **Cross-Customer E-Mobility Traction:** Growth in e-mobility and HMI divisions supported by both **Bajaj and non-Bajaj customers**, validating broader market acceptance. * **Non-Auto Expansion with Capital Efficiency:** New non-auto initiatives leverage existing ICE capacities; SOPs begin FY'27 with only **partial delta investment**, targeting long-term margin parity with auto business. * **Export Product Focus:** **Metallic components** (engine valves, forged machined products) represent the highest near-term export potential, especially in Europe, ahead of electronic/electrical components. --- # 4. Capacity & Utilization ## A. Romania Ramp-Up * **Growth Leadership:** Romania and Thailand positioned as primary growth engines, with new business wins across all sites supporting expansion. * **Path to Profitability:** Romania on track to reach cash breakeven next fiscal as **low capacity utilization** improves with new orders in the second half. ## B. Thailand Plant Timeline * **Revenue Timeline Clarity:** Thailand facility to commence operations in **Q2 2027**, with meaningful revenue contribution expected only from **2027 onwards** due to long automotive program cycles. * **Segment Expansion:** New 4-wheeler lighting plant in Thailand to ramp up in **2027**, diversifying beyond current 2-wheeler-driven profitability. ## C. Asset Efficiency * **Capacity Utilization Boost:** Recent wins in **Nonautomotive** and other segments expected to enhance asset efficiency by absorbing existing capacity. --- # 5. R&D & Engineering ## A. Key Figures * **R&D Investment Impact:** **₹27–28 Cr** negative PBT impact (past year) * **Overseas R&D Spend:** **~₹25 Cr** annually, stable outlook * **Patent Filings:** **~15** filed in 9M, total portfolio exceeds **130** ## B. Spending Impact * **Growth Catalyst:** E-mobility and HMI division rebounded strongly following resolution of rare earth magnets supply crisis, enabling backlog clearance. * **Strategic R&D Payoff:** Recent investments are positioned to drive meaningful improvement in core EBITDA, particularly in overseas operations where revenue scalability is anticipated. * **New Business Pipeline:** e-Powertrain components (motor and controllers) under active discussion with non-Bajaj electric 2W OEMs, with **SOP expected in early FY '27**; one customer already secured, another in advanced talks. ## C. Global Teams * **Engineering Footprint:** Established a strong R&D presence in **China**, augmenting teams in **Poland and India** to support 4-wheeler electronics and lighting programs globally. ## D. Patent Filings * **Innovation Momentum:** Sustained IP generation with nearly 15 patents filed in the first nine months, reinforcing technological differentiation. --- # 6. Risks & Execution ## A. Key Figures * **Separation Cost:** **₹799 million** (VSS for 400+ employees) * **Overseas P&L Impact:** **₹35 Cr** negative impact on profitability · **₹27–28 Cr** linked to Global Lighting R&D * **Legal Claim Exposure:** **€66 Mn** (OPmobility arbitration) ## B. Overseas Losses * **Strategic Workforce Reset:** VSS implemented to strengthen cost structure in legacy plants, with **~5% of workforce** exited; not driven by business decline. * **Turnaround Underway:** Overseas Electronics, Lighting, and Forging units show signs of recovery, supported by **strong recent order wins**, with improvement expected from H2 FY'27. * **Profitability Drag Persists:** Global operations remain under pressure, particularly **Thailand and Italy**, delaying overall PBT breakeven despite Lighting profitability and Romania nearing breakeven. ## C. Legal Disputes * **Active Arbitration:** €66 Mn claim from OPmobility over alleged unjust termination of supply agreement; company has countersued, viewing claims as **largely unreasonable and frivolous**. * **No Provision Taken:** Management, led by Tarang Jain, has not booked any liability due to confidence in legal standing. * **Noncore Asset Review:** Imes Forging under strategic evaluation for profitability enhancement, with **sale among active options**. --- # 7. Guidance & Outlook ## A. Key Figures * **Revenue Growth Target:** **15%–20% ahead of market** (sustained commitment) * **CAPEX Plan:** **₹150 Cr** land acquisition (Q4 FY25–Q1 FY26) · **₹300–350 Cr** next fiscal (ex-land) · **₹250–300 Cr** thereafter * **Breakeven Timeline:** **Cash breakeven** in Romania electronics by next year · **PBT breakeven** the following year ## B. Revenue Momentum * **Growth Catalysts:** Strong momentum driven by **GST-driven consumption boost** and easing inflation, supporting near-term reversal from prior negative growth. * **Strategic Rebalancing:** Tough cost actions including **VRS program** underway; growth to be fueled by large global OEM wins and expansion in **4-wheeler electronics and lighting**. * **International Inflection:** Revenue contribution from abroad expected to meaningfully improve from **2027–2028**, backed by recent order wins and targeted segment focus. ## C. CAPEX Plan * **Phased Investment:** Greenfield site near Pune to be acquired with **partial spend in Q4**, signaling commitment to capacity expansion. * **Flexible CAPEX Trajectory:** Post-land spending to moderate over time, with **potential uptick tied to overseas program wins**; emphasis on reusing existing capacity for non-auto projects. ## D. Breakeven Timeline * **Romania Ramp-Up:** Overseas electronics operations on track for **cash breakeven next fiscal**, with full profitability expected within two years, enabling scalable international growth.