JTEKT India Ltd Q4 FY2026 Concall Summary

Key Takeaways

• 11% sales growth, beating the PV market: JTEKT grew faster than the 9% passenger vehicle market, helped by GST-led demand for Maruti models, though Honda's 30% decline and delayed EV launches held back what could have been 12-13% growth.
• Margins flat despite mix headwinds: Full-year EBITDA margin slipped just 0.1% to 7.5% as fixed cost discipline offset a negative product mix shift toward lower-margin Maruti models and a forex accounting drag.
• CVJ is the margin and growth story: The second CVJ line is ramping, a third is being built, and management targets 15% market share in a category it says carries better EBITDA margins than MS Gear and can eventually outsize the gear business.
• Export orders open a new leg: A maiden Brazil order for Stellantis (up to 5 lakh units potential) and reduced U.S. tariffs create an export pathway that management expects to add ₹75-100 crores next year.
• What to watch next quarter: Whether the October '26 Maruti MPV EV launch and Honda's December '26 SUV EV materialize on schedule to lift utilization of the ₹411 crores in assets still sitting in CWIP.

Revenue Growth & Market Share

• GST cut unlocked demand: The reduction in GST from 28% to 18% for smaller vehicles improved affordability and drove demand for Alto, Jimny, Baleno, Ertiga and Brezza, all models where JTEKT supplies components.
• Maruti share deepened: JTEKT's share of business with Maruti Suzuki rose from 56% to 60%, even as Maruti and Toyota together grew only 5% of the 9% PV market expansion.
• Honda drag was material: Honda's business declined 30% and JTEKT is nearly a 100% supplier; without this, sales growth would have been 12-13% instead of 11%.
• EV launches came late: e Vitara and Victoris SOP was delayed from June to August, with Indian market launch pushed to October/November, so expected revenue from these models was not fully captured, though they still contributed about ₹200 crores in a few months.
• April and May look solid: Management reported good April numbers and a good May forecast for PV segment sales, supporting the theoretical growth framework.

Chanana: "I give you a different way of calculating my growth is that suppose the market grow by 10%, okay? So, we will be able to grow by INR400 crores, -- and if we are able to grow our export by, say, INR100 crores, we can get another INR500 crores."

CVJ: The Margin & Capacity Bet

• Better margins than MS Gear: CVJ carries higher EBITDA margins because it is 100% localized with no imports, faces less competition, and offers backward integration opportunities like forging.
• Second line ramping: The second CVJ line, operational from November '25, added 7.54 lakh units of annual capacity; FY26 sales were ₹130 crore at roughly 65-67% utilization.
• Third Maruti EV will fill it: A new Maruti MPV EV from Gujarat, expected October '26, will push CVJ Line 2 utilization to 90% and sales to ₹250 crore-plus; JTEKT supplies the complete steering, MS Gears, CPS and CVJ for this model.
• Third line underway: Work has started on a third CVJ line, and further expansion is planned from the Gujarat location once the company moves there.
• 15% market share ambition: Management's first-ever CVJ market share target is about 15%, calling it a market that can eventually be bigger than the MS Gear category JTEKT currently serves in steering.

Chanana: "EBITDA margins are better than even most of the MS Gear product we have. MS Gear, over a period of time, there have been huge competition. And we feel that CVJ is one product, where we can perform -- where we can have a little competitive edge."

Margin Walk & Cost Structure

• Fixed costs well controlled: Employee cost as a percentage of sales declined 0.18% and admin cost declined 0.1%, even after booking ₹0.82 crore in rights issue expenses.
• Variable costs ate the gains: Material cost rose 0.18% driven by product mix, with a 0.33% negative from the shift toward lower-margin Maruti models and a 0.23% negative from a forex accounting issue where a ₹6.2 crore gain was booked as other income instead of reducing material cost.
• Partially offset by exports and testing: A 20% increase in exports improved margin by 0.15%, while reduced testing charges for new product development and settlement of provisions added another 0.23%.
• Manufacturing and selling costs added pressure: A power tariff change and higher power utilization for new production lines under trial added 0.1%; U.S. reciprocal tariff costs of ₹6.3 crore (0.24%) were partly offset by warranty costs halving (positive 0.15%).
• U.S. tariff relief ahead: The U.S. tariff was reduced from 50% to 10% via a Supreme Court order, and management expects U.S. exports to increase at the lower rate, helping profits.

Chanana: "These 2 together costed 0.56% as a negative factor, which offset our improvement of 0.38%, which we achieved compared to the previous year. And therefore, there was a net negative impact of 0.18%."

Export Breakthrough

• Brazil order opens a new geography: JTEKT received its first purchase order from JTEKT Group Brazil for Stellantis; a manual gear Rack and Pinion line with 4 lakh units capacity has been set up at Chennai, with first shipment in May.
• Ramp-up potential is large: This year's volume is 70,000 units, rising to 100,000-150,000 units next year (₹50-60 crores), with potential to reach 5 lakh units per annum as Stellantis launches multiple variants on the same platform in Brazil.
• More group business waiting: Once JTEKT India establishes itself with group entities, management says more export business is waiting.

Chanana: "This business can go very fast as per our understanding because there will be many, many variants which will be launched by Stellantis in Brazil on the same platform."

Capacity Utilization & Asset Turnover

• New capacities are underutilized: Most capacities set up in FY26 are running well below potential because models like e Vitara and Victoris started mid-year: CVJ Line 2 at 27%, MS Gear Line 6 at 21%, MS Gear Line 4 (Chennai) not yet started, CPS Line 3 at 50%.
• ₹411 crores in CWIP: Assets not yet operationalized will weigh on ratios for the next 1-2 years; management explicitly asked analysts to track this.
• Full utilization in 1-1.5 years: All new capacities are expected to reach 100% utilization over the next year to year-and-a-half, depending on market conditions.
• FATR target is 3x: Fixed asset turnover varies by product (CPS 2.5-3x, manual gear 2-2.5x, CVJ 1.5x); once capacities are fully utilized, management expects to touch upward of 3x, though a higher CVJ mix may pull the blended ratio slightly lower while profitability remains strong.
• ROCE recovery expected: Once full capacity utilization is achieved, return on capital employed should improve and return to the 16-17% levels seen 2-3 years ago.

OEM Relationships & Model Pipeline

• 100% of Maruti's EV business: JTEKT currently supplies to all of Maruti Suzuki's EV models, and the upcoming MPV EV from Gujarat (October '26) will have JTEKT as the complete supplier across all three products: Manual Gear, CPS and CVJ.
• Honda recovery hinges on new SUV EV: Honda is expected to launch an SUV EV from its Tapukara plant around December '26, with about 40,000 units that could represent ₹100 crores of business for JTEKT.
• Toyota expansion is further out: Toyota's Maharashtra plant expansion is expected sometime in '28 and '29; a new facility at Bidadi is set to begin in the first half of '29, increasing capacity by about 1 lakh vehicles per year.
• Next product introduction waits on CVJ: Management declined to confirm any specific plans for introducing other driveline products from JTEKT Corp, saying the priority is to complete the CVJ strategy over the next 1-1.5 years before moving to another segment.

Guidance & Commitments

Key Metrics