This article first appeared on GuruFocus .
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Revenue:Consolidated revenue momentum reflected strong operating execution in Q1 FY27, with broad-based growth across all key segments.
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Non-Auto Segment Sales:Highest-ever quarterly sales of INR1,998 million, up 129.9% year-on-year, contributing 20.8% of overall sales.
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ADS Business Revenue:INR1,454 million, more than tripling year-on-year, as the primary growth driver within the non-auto segment.
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Auto Tech-Agnostic and XEV Sales:Highest-ever quarterly sales of INR1,316 million, growing 22.2% year-on-year.
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Auto ICE Segment Sales:INR6,275 million, delivering 20.8% year-on-year growth on a high base.
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EBITDA:INR1,961 million, up 48% year-on-year, excluding exceptional items.
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EBITDA Margin:Expanded by around 200 basis points to 19.2%, compared with 17.2% in the same quarter last year.
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Profit After Tax (PAT):INR874 million, up 39% year-on-year, with PAT margins improving to 8.6%.
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Adjusted PAT:INR1,000 million, excluding the post-tax impact of INR127 million from an exceptional litigation settlement charge.
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Other Income:INR134 million, up around 15% year-on-year, driven by higher Forex gains.
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Exceptional Charge:INR169 million towards settlement of a U.S. District Court litigation matter, disclosed in the 2021 prospectus.
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ADS Order Book:Cumulative unexecuted lifetime order book for 5 years stood at INR44.4 billion as of quarter end, increasing to around INR57.5 billion in Q2.
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New Business Order Book (ex-ADS):Peak annual revenue of INR18.5 billion as of June 2026.
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Release Date: August 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Record non-auto segment sales of INR1,998 million, up 129.9% year-on-year, driven by a threefold increase in ADS revenue.
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ADS order backlog surged to INR57.5 billion, with a major new order from a semiconductor equipment manufacturer expected to generate about $75 million in annual business.
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EBITDA grew 48% year-on-year to INR1,961 million, with margins expanding 200 basis points to 19.2%.
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Strong demand visibility across domestic two-wheeler and passenger vehicle segments, with expectations of high-teens to 20% top-line growth for FY27.
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Strategic capacity expansions, including a new surface treatment facility and an 80,000 sq ft hangar, are on track to support future growth and enhance in-house capabilities.
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Auto ICE segment delivered healthy 20.8% year-on-year growth, with record quarterly performance in passenger vehicles, commercial vehicles, and scooters.
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Management remains confident in achieving INR8,000-9,000 crore revenue by FY31, backed by a strong order pipeline and organic growth plans.
Negative Points
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Provisions of INR126 million for U.S. import duty tariffs and INR169 million for a litigation settlement weighed on quarterly profitability.
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Material cost inflation, particularly in aluminum and consumables, has not yet been fully passed through to customers, pressuring margins.
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Supply chain stress due to strong demand is causing capacity constraints and delays in raw material availability.
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ADS revenue ramp-up will be gradual, with significant revenues from new orders not expected until calendar year 2027, limiting near-term contribution.
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Management refrained from providing an updated CapEx guidance, citing ongoing evaluation, which may create uncertainty for investors.
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The company's growth outlook is partly dependent on sustained AI-driven demand for semiconductors, which carries cyclical risk.
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Despite strong Q1 performance, management maintains a conservative margin guidance of around 19%, suggesting potential for margin normalization.
Q & A Highlights
Q: Can you provide details on the ADS order book increase to INR57 billion, the source of the incremental orders, and the expected revenue trajectory for this segment? A: Vikas Goel (CFO) and Hari Krishnan (CEO, Aerospace, Defence & Semiconductor Division): The order book increased from INR44.4 billion to approximately INR57.5 billion due to a significant new order from an existing semiconductor equipment manufacturer (SEM) customer. This order is expected to bring the annual business from this customer to nearly $75 million. The total ADS order book of INR5,700 crores is executable by FY31, with significant revenues expected to begin in calendar year 2027 and peak in 2029.
Q: Given the strong Q1 performance, is the FY27 guidance of high-teens top-line growth a baseline, and could the company exceed 20% growth? A: Bindiganavile Preetham (Group CEO): While the initial plan was for high-teens growth, the sustained momentum in the domestic two-wheeler and passenger vehicle markets, along with strong export traction, suggests the non-ADS business alone could achieve mid-teens growth. Combined with the rapid scaling of the ADS segment, there is a good possibility the company could see overall revenue growth between high-teens and 20% for FY27.
Q: What is the margin profile for the ADS business compared to the domestic business, and what is the company's overall margin trajectory? A: Bindiganavile Preetham (Group CEO): The exports and ADS businesses operate with a higher margin profile, targeting EBITDA margins between 25% and 30%. As capacity utilization improves, these margins could trend towards the higher end of that range. For the overall company, while Q1 was elevated due to a favorable mix and currency advantages, the management is working towards achieving its aspirational "20/20/20" targets and sustaining the improved margin levels.
Q: Can you elaborate on the capacity expansion plans for the ADS segment, including the new hangar and surface treatment facility, and the expected revenue capacity? A: Hari Krishnan (CEO, ADS Division) and Bindiganavile Preetham (Group CEO): The existing facility, with an extended 80,000 sq ft hangar for aerospace and SEM, is expected to support revenues of INR1,400-INR1,500 crores. A new build-to-suit facility of approximately 100,000 sq ft is being planned to add another INR1,500 crores in capacity. The defense business is being relocated to a dedicated facility to target INR500 crores in revenue. The new surface treatment facility is undergoing Nadcap validation to enable complete in-house production. Overall, the company is creating capacity to generate about INR3,500 crores in revenue by FY31.
Q: What is driving the expansion in the auto ICE segment, particularly at Pantnagar and Manesar, and is it due to market share gains or OEM capacity expansion? A: Rahul Kale (CEO, Automotive): The expansion is driven by a substantial increase in demand from existing customers, particularly south-based two-wheeler manufacturers, and new outsourcing opportunities from OEMs. The company is expanding forging, machining, and heat treatment capabilities for crankshafts and connecting rods. This is not just about market share gains but also about capturing higher volumes from OEMs who are increasing their outsourcing.
Q: What is the company's approach to the defense segment, and what new capabilities are being developed? A: Hari Krishnan (CEO, ADS Division): The company is upgrading its defense offerings from precision machined components to include sheet metal capabilities, which will make its RFQ packages more competitive. A new dedicated defense facility is being set up to increase machining capacity and pave the way for entry into sheet metal, which will also be used for aerospace applications. The company is focusing on large order wins from customers in Europe.
Q: What are the key risks to the ADS segment's growth targets, particularly in aerospace and semicon? A: Hari Krishnan (CEO, ADS Division): In aerospace, the risk is considered much lower given the strong order backlogs at Boeing and Airbus. The primary risk in the semicon industry is a potential slowdown in AI-driven demand for data centers, which currently has equipment suppliers unable to meet demand until FY29-FY30. The company does not have any significant products in production that are expected to reach end-of-life in the near future.
Q: Will the company require any external capital raising to fund its growth and CapEx plans? A: Vikas Goel (CFO) and Bindiganavile Preetham (Group CEO): Currently, the company does not foresee a need for additional fundraising. The balance sheet is strong enough to fund investments through leveraging, which is at a very low level. The current projections are based on organic growth, but the company remains open to evaluating inorganic opportunities if they arise.
Q: Can you provide an update on the progress of the turbine blisk order and the company's move into more complex components? A: Hari Krishnan (CEO, ADS Division): Significant progress has been made on the prestigious blisk order, with the first samples expected to be ready for the customer within a month. The company is also working on machining monocrystalline components, which represents new learning. With the new special process facility, the company is targeting more complex parts in SEM and aerospace, such as door assemblies, fuselage parts, and structural components, moving up the value chain.
Q: What other new segments is the company exploring for future growth beyond ADS? A: Bindiganavile Preetham (Group CEO): The company is keenly interested in the power sector, including transmission and storage, and is also monitoring the potential opportunity in humanoids. These are segments the company is evaluating to expand its presence in the coming years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
