This article first appeared on GuruFocus .
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Total Revenue:INR 1,019.1 crores for Q3 FY26, up 21.3% from INR 840.5 crores in Q3 FY25.
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EBITDA Margin:Improved by 106 bps from 8.2% to 9.3% in Q3 FY26.
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New Business Wins:INR 130 crores across product categories in the quarter.
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Warranty Provision:One-off provision of INR 230 crores (net of tax INR 172 crores) by associate entity ZF Rane Automotive India Private Limited.
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Release Date: February 17, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Rane (Madras) Ltd ( BOM:532661 ) reported a 21.3% increase in total revenue for Q3 FY26, reaching INR1,019.1 crores compared to INR840.5 crores in the same quarter of the previous year.
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The company won new business worth INR130 crores across product categories during the quarter.
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EBITDA margin improved by 106 basis points, from 8.2% to 9.3% in Q3 FY26.
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The India-US trade deal, including tariff reductions, is expected to enhance competitiveness and positively impact customer conversations.
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The company is undertaking cost reduction initiatives across direct and indirect materials, freight, logistics, and warehousing to improve future EBITDA margins.
Negative Points
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A one-off warranty provision of INR230 crores was made by the associate entity ZF Rane Automotive India Private Limited due to product recall liability, impacting financials.
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The company faces challenges in achieving double-digit EBITDA margins due to low-margin orders accepted in previous years and ongoing restructuring efforts.
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Debt levels remain high, with a focus on debt reduction over the next 12 to 18 months, but immediate reductions are not expected.
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The company is dealing with a product recall related to seatbelt buckles in certain North American markets, which may require further provisions.
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Rane Steering Systems is experiencing margin pressure due to low pricing on some orders and labor code provisions, affecting overall profitability.
Q & A Highlights
Q: How do the recent orders and the Mexico facility impact Rane Madras' revenue and EBITDA guidance for '26-'27? A: The INR130 crores orders are for future businesses and will not start immediately. We have won about INR650 crores of orders for Rane Madras over the last 3 quarters. While we don't provide specific EBITDA guidance, we are moving in the right direction with ongoing cost reduction initiatives expected to improve EBITDA in the coming quarters. - P A Padmanabhan, Group CFO
Q: Why hasn't the growth translated into better EBITDA margins, and what steps are being taken to improve them? A: We are taking initiatives for quarter-on-quarter improvement in EBITDA. The new labor code has impacted margins, but we are confident of achieving double-digit EBITDA margins in the coming financial year through cost reduction in direct and indirect materials, freight, logistics, and warehousing. - P A Padmanabhan, Group CFO
Q: What is the status of debt reduction plans, and how are land sales contributing to this? A: Despite capital investments, we have maintained overall debt levels by using land sale proceeds for CapEx. We aim to substantially reduce debt over the next 12 to 18 months as further land sale payments are received. - P A Padmanabhan, Group CFO
Q: Can you provide details on the warranty provision related to ZF Rane and its impact? A: The provision is related to a product recall due to a defect in a plastic injection molding part used in seatbelt buckles. We have made a provision for around 960,000 vehicles. The adequacy of this provision will be reviewed by April-May. - S Prasad, Associate Vice President, Corporate Planning
Q: What are the growth prospects for Rane Madras in terms of exports and aftermarket segments? A: We expect robust growth in domestic markets across segments and anticipate the aftermarket segment to be a growth driver. The mix of exports is likely to remain similar, with growth expected across all segments. - P A Padmanabhan, Group CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
