This article first appeared on GuruFocus .
Release Date: May 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Kross Ltd ( NSE:KROSS ) reported a strong finish to FY26 with a top-line growth of 8.5%, driven by a favorable macroeconomic environment and GST rationalization benefits.
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The company saw a significant 49.2% increase in revenue in the second half of FY26 compared to the first half, indicating strong momentum.
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Key OEMs like Tata Motors and Ashok Leyland reported strong volume growth, which is expected to sustain throughout FY27.
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The company successfully launched and validated its tipping jack product, contributing to sales in Q4 and expected to strengthen its position in the trailers ecosystem.
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Strategic investments in capacity expansions and new initiatives, such as the seamless tube facility and robotic forging facility, are progressing well and poised to support future growth.
Negative Points
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The Middle East conflict resulted in a shortage of LPG and a substantial increase in commodity prices, posing challenges in Q4.
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Despite strong demand, the company faced challenges in ramping up production to meet peak capacity due to temporary hiccups.
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The tractor segment, while growing, is highly competitive and not expected to expand margins significantly.
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The seamless tube facility, while promising, will not contribute to revenue growth until FY28, delaying potential margin improvements.
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Commodity price hikes and supply chain issues, including shortages of LPG, have impacted margins and are expected to continue affecting the company in the short term.
Q & A Highlights
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Q: What drives the target of increasing the tractor segment's revenue contribution from 9% to 15% in the next two years? A: The company plans to achieve this target through new customer additions and product diversification. They are working with three large OEMs in the tractor segment, including a new partnership, and are expanding their product base with existing customers into forgings and shaft components. (Respondent: Unidentified_3)
Q: When can we expect traction in trailer axle exports with the new extruded line? A: The company plans to explore export opportunities once the extruded axle beam line is fully operational, producing over 5,000 axle beams a month. They will then invest in new tools and dyes to meet export requirements. (Respondent: Unidentified_3)
Q: Can you provide the volumes for axles and suspensions for the quarter? A: The company produced approximately 10,500 trailer axles and over 3,500 suspensions in Q4 FY26. (Respondent: Unidentified_3)
Q: What is the timeline for the completion of the seamless tube facility? A: The construction of the seamless tube facility is complete, and equipment is being dispatched. The facility is expected to be operational by Q4 of this year. (Respondent: Unidentified_5)
Q: How will backward integration initiatives impact margins and profitability? A: Backward integration, such as the seamless tube facility, is expected to improve margins by reducing reliance on imports and mitigating currency fluctuations. Revenue growth from the seamless unit will start in FY28. (Respondent: Unidentified_5)
Q: What are the expected revenue growth and margin projections for the next year? A: The company aims for a revenue growth of around 22% for FY27, subject to consistent demand. Margins are expected to remain between 14% to 15%, with potential improvement once the seamless tube plant is operational. (Respondent: Unidentified_3)
Q: How are rising fuel prices expected to impact the commercial vehicle (CV) segment? A: Despite rising fuel prices, demand remains strong, with OEMs projecting high single-digit growth. The company expects a better Q1 compared to last year, with sustained demand in the CV segment. (Respondent: Unidentified_3)
Q: How is the company addressing commodity price increases and supply chain issues? A: The company is negotiating with OEMs for price adjustments due to commodity and consumable price hikes. They have already increased prices in the trailer axle and suspension business and are managing supply chain challenges by diversifying fuel sources for furnaces. (Respondent: Unidentified_3)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
