# 1. Financial Performance ## A. Key Figures * Consolidated Revenue: **₹2,028 Cr** Q1 FY'26 (+6.8% YoY) * **EBITDA Margin:** **9.5%** Q1 FY'26 (+40 bps YoY) * **PBT (pre-exceptional):** **₹2 Cr** (1% of revenue) * **Net Debt:** **₹448 Cr** (down ₹2 Cr QoQ) · **Net Debt/Equity:** **<3x** ## B. Revenue Growth * **Outperformance vs Industry:** Consolidated revenue growth significantly outpaced Indian auto industry trends, with India operations growing despite macro headwinds. * **Resilient Domestic Demand:** India business delivered low single-digit growth, reflecting pricing discipline and share gains in a flat market. ## C. Margin Expansion * **Sharp Margin Recovery:** EBITDA margin expanded 400 bps YoY on operational improvements and favorable mix, despite prior-year drag from inventory adjustments. * **India Profitability Strength:** Gross margin improved to **35%** on lower low-margin tooling sales and clean inventory accounting, supporting sustainable operating leverage. * **Profitability by Region:** Multiple Indian and Asian subsidiaries are profitable, though full segment transparency is limited. ## D. Net Debt Reduction * **Balance Sheet Strengthening:** Net debt reduction driven by **strong FCF generation** and **non-core asset monetization**, notably the China JV exit. * **Liquidity Position:** Gross debt of **₹825 Cr** offset by **₹377 Cr** in cash, enabling near-term debt repayment without external funding. * **Lower Interest Outlook:** Management expects declining interest costs in coming quarters as debt amortization accelerates post-Q1. --- # 2. Order Book & Business Wins ## A. Key Figures * **Annual Peak Revenue (New Wins):** **₹291 Cr** (CFO clarification) · **₹290 Cr** new order book in Q1 ## B. Annual Peak Revenue * **Revised Reporting Standard:** Company now discloses only **annual peak revenue**—reflecting maximum steady-state revenue—not lifetime value, which may understate perceived order size despite strong underlying wins. * **Execution Momentum:** Over **45% of FY'26’s peak revenue programs** have already entered production, signaling strong execution and near-term revenue visibility. * **Customer Mix Shift:** Bajaj’s share of total revenue remains high at **45%**, but accounts for only **38% of peak revenue** and just **4% of new wins**, indicating meaningful customer diversification. ## C. New Order Value * **EV & Global Breakthrough:** Secured **largest overseas EV win in over a year**—front/rear drive unit inverters for a North American OEM—validating electronics capabilities and opening new growth corridors. * **Near-Term Growth Catalysts:** New wins to drive acceleration from Q2 onward, led by **e-mobility, lighting, and high-end electronics** in India and global markets. * **Product Mix:** Despite **75% of current new wins in ICE**, strategic focus remains on expanding EV content, with future pipeline skewed toward electrification. ## D. Customer Diversification * **Broad-Based Wins:** New orders are **evenly distributed across product segments**, with body parts and lighting leading by volume, supporting resilience and scale across divisions. --- # 3. Segment & Product Mix ## A. Key Figures * **Revenue Mix:** **34%** body parts · **26%** ICE powertrain · **18%** lighting · **10%** aftermarket · **6%** e-mobility * **EV Revenue:** **11%** of total revenue from EV customers * Industry Growth: 0.7% YoY 2-wheeler production · 3.4% PV · 2.6% CV · 9.8% 3-wheeler ## B. Body Parts & Lighting * **Engine-Agnostic Strategy:** Passenger car products designed for both ICE and EV platforms, enabling cross-powertrain scalability in lighting and polymer components. * **IMES Contribution:** Minor **3%** business from Italy-based IMES fully embedded within ICE powertrain segment. ## C. E-Mobility Revenue * **EV Revenue Momentum:** EV-related revenue now represents a double-digit share of total income, supported by strong YoY volume growth despite near-term supply constraints. * **Content Per Vehicle:** Strategic value capture of **₹30,000–₹35,000** per EV two-wheeler and **₹35,000–₹40,000** in 3-wheelers highlights technology leadership. * **Supply Chain Adaptation:** Rare earth magnet shortages impacting 2-wheeler EV volumes are being mitigated via R&D-driven alternatives and global supplier partnerships. ## D. 2-Wheeler Dominance * **Production vs. Demand Divergence:** Despite solid YoY production growth in 2-wheelers, domestic sales declined YoY, indicating inventory or demand softness. * **Seasonal Recovery:** 2-wheeler segment showed sequential growth, outperforming other vehicle categories which faced seasonal de-growth. * **Technology-Driven Content Variation:** Content value in 3-wheelers and higher-capacity 2-wheelers is significantly higher, reflecting technology adoption; lower cc segments see reduced content. --- # 4. Geography & Operations ## A. Key Figures * **Revenue Mix:** **75%** 2W/3W segments · **25%** 4W/others * **Geographic Contribution:** **87%** from India · **3%** overseas (Q1 FY'26) ## B. India Revenue Share * **Strategic Focus:** India operations prioritizing 4-wheeler lighting, lamps, and plastic molding, with expectations of strong growth and new order wins in passenger car components. * **Dominant Market Role:** India remains the core revenue engine, contributing the vast majority of business, underpinned by segment leadership in 2W/3W. ## C. Overseas Transition * **International Revival Path:** Overseas units, including Italy’s IMS business, in transition with order book rebuilding; sales impact from new wins expected from mid-next year. * **North American Engagement:** Active pursuit of 4-wheeler and electronics opportunities with North American customers, though current wins are not yet contributing in India. * **Near-Term Stability:** Overseas run rate to persist through current year, with no material improvement anticipated before next fiscal. ## D. Romania Plant Utilization * **High-Potential Asset:** Electronics projects for overseas customers to be manufactured at the Romania plant, a facility with high-end capabilities currently operating at low utilization. --- # 5. Supply Chain & Technology ## A. Key Figures * **Renewable Energy Sourcing:** **~50%** target post-phase two ramp-up ## B. Rare Earth Mitigation * **Design & Manufacturing De-risked:** Full alignment with customers on **LRE** and **rare earth-free ferrite-based magnet motors**; production lines adapted for both current and future programs. * **Supply Chain Progress:** LRE magnet supply secured with ongoing progress, though constraints remain a potential operational risk. * **Strategic Shift Confirmed:** Move toward low and rare earth-free solutions driven by HRE motor sourcing challenges in e-mobility. ## C. Ferrite Magnet Shift * **Proven Substitution:** Successful transition to ferrite-based magnets in non-E-Powertrain electrical products, with supply already initiated. ## D. R&D Center Expansion * **Global R&D Footprint:** Dedicated overseas R&D center and team established to support 4-wheeler lighting and electronics, enabling access to niche technical talent. * **Cost Impact & Investment:** Higher employee costs driven by overseas setup; additional overseas cash allocated to R&D to fuel innovation and support anticipated new order wins. --- # 6. Risks & Supply Constraints ## A. Magnet Supply Risk * **Active Legal Dispute:** Litigation initiated against Plastic Omnium in the Netherlands over alleged breach of supply agreement, with counterclaims filed and potential escalation to arbitration. * **Persistent Supply Chain Vulnerability:** Ongoing difficulty in securing stable LRE and other magnet supplies from China, exacerbating near-term operational risks. * **Customer-Side Disruption Outlook:** Customers anticipate production disruptions in Q2 FY'26 due to magnet shortages, though backlog recovery is expected once supply normalizes. * **Geopolitical Impact on Operations:** Rare earth magnet shortages are already affecting EV production in India, with supply impacts felt from late Q1; **decent stock levels** prior to disruption helped mitigate initial fallout. ## B. Geopolitical Disruptions * **Overseas Operations in Rebuild Mode:** European businesses currently reporting losses, but management characterizes them as temporarily impaired, with a clear path to recovery following an unexpected loss of business. --- # 7. Guidance & Outlook ## A. Key Figures * **Order Wins:** **INR2,905 million** aligned with long-term EV growth strategy ## B. FY27 Revenue View * **EV Growth Catalyst:** Recent order wins underscore strategic momentum in the EV segment, reinforcing exposure to high-growth markets. ## C. Overseas Profitability * **Path to Profitability:** Overseas business on track to achieve **moderate profitability by FY '27**, with Europe expected to turn profitable in H2 of next fiscal as order execution scales. * **Capital Efficiency:** European operations anticipated to be **ROC accretive**, supported by low capital intensity and **ROIC potential exceeding domestic returns**. * **Commitment to Romania:** Despite short-term losses, Romania plant to be retained with **turnaround expected in 1-2 years**, reflecting long-term confidence in overseas electronics growth.