Record revenue but QoQ flatness tempers upside; inflation headwinds acknowledged

Delivered revenue INR 238.4 Cr, +15.3% YoY; transcript overstated by ~1.5%

Delivered PAT INR 30.0 Cr, +35.2% YoY; exact match

164 ÷ 135 = 21.5% YoY; matches stated figure

Claimed explicitly, verified as stated in call

238.4 Cr (delivered) likely higher than Q4 FY26 but transcript figure 242 Cr is unverified

Prior 15–20% FY27 guidance → new 18–20% (lower bound raised 15%→18%). Offset by margin ceiling cut 18%→17.5%. Shift reflects order pipeline confidence but inflation caution.

Memo guidance implied INR400 Cr FY27; now guiding INR340 Cr (±2.5%). Meritor business lost ₹30–40 Cr/yr to Trump tariff; Europe muted. New CEO (Ashish, 50% forging focus from Apr 2026) cited as fix.

Currently ~5% of gasket business (INR5–7 Cr). Targeting ₹30–40 Cr annual potential by 2027–28 via Cummins, Kirloskar Oil generators for data centres (100% backup power). Single-source position with Cummins.

EV supply INR12.5 Cr in Q1 (3.27% of total); targeting 5% minimum by end of FY29. New JLR order ₹15–20 Cr/yr for rubber EV components (Q1 FY28 start).

Currently 25% of revenue; targeting 35% by FY28. Order book diversified: JCB, Dana, Carraro, JLR, BMW, Cummins. West Asia crisis and Europe slowdown headwinds noted but supply-chain diversification from China driving demand.

BMW (existing, expanding). Volvo (potential, gasket). Marelli/Stellantis (new, chassis & forging). JLR (new, plastic EV components). Cummins America (slow-build; ₹30–40 Cr expected by FY27–28). Kia, Hyundai, Maruti ongoing. MD pursuing Tata Motors Gujarat plant (90-day timeline).

Currently ~5% (₹5–7 Cr of gasket business). Cummins INR100 Cr/yr total; INR25 Cr this quarter. Estimate ₹30–40 Cr annually in 2–3 years. Single-source to Cummins. Same gasket product; application expanded to data-centre generators.

Gasket: ₹850–900 Cr by FY30. Forging: ₹650–700 Cr by FY30. Mix will include TV series (ICE), data centre (15–20% by FY30), commercial vehicles, heat shields, exports, plastic components (₹25 Cr orders maturing FY28+).

Manpower shortages (LPG price spike, workers from Haryana left), order execution timing, BMW/GKN customer schedule cuts (Europe weak). But July > June, Aug > July, Sep > Aug (positive trend). ₹500 Cr order book for 5 years; Marelli, Dana, Carraro maturing Q3–Q4. FY27 target ₹340 Cr (vs prior ₹400 Cr, reduced after Meritor loss).

EV growing, but slightly weaker pace than ICE. Q1 EV supply ₹12.5 Cr (3.27% of total). Drivers: Tata Motors EV ramp, BMW EV (bushes), JLR EV launch (Sep 2026). Targeting 5% EV mix minimum by FY29.

Meritor business ₹30–40 Cr/yr lost to Trump tariff; backed out; now recovering. Europe muted. New CEO (Ashish, Apr 2026) spending 50% time on forging; manpower/leadership issues resolved. Targeting ₹340 Cr ±2.5% FY27, then 15–20% growth FY28+ (above historical ₹75 Cr average).

Around 17% can be assumed. Q1 was 17.6%, within range. Inflation headwinds being worked through; margins will stabilize at ~17% as cost pass-through to OEMs completes.

Marelli: 30–40% growth. Forging: 20%+ (from weak base). Gasket: 16–17%. Marugo (TMR): 18–20%. All segments outperforming as orders ramp.

Raised from prior 15–20% (lower bound 15%→18%). Implies Q2–Q4 average ~20% growth to compensate for Q1 at 15.3%. Contingent on forging recovery and export ramp. Achievable but execution-dependent.

Lowered from prior 17–18% (upper bound cut 18%→17.5%) due to inflation (steel, aluminium, labour, LPG). Pass-through to OEMs 'very positive' but unconfirmed. Sustainable margin stated as ~17%.

vs ₹81 Cr in FY26. For gaskets, forgings, heat shields, capacity expansion to meet OEM demand. Aligns with revenue growth targets and new order ramps.

Q1 forging grew only 4% YoY (₹78 Cr) vs FY27 guidance of 15–20%. Drivers of weakness: manpower shortages, LPG price spike, European customer schedule cuts (BMW, GKN). Recovery plan relies on new CEO (hired Apr 2026, 50% forging focus) and ₹500 Cr order book maturation in Q3–Q4.

Steel, aluminium, LPG, and labour cost inflation cited as temporary margin pressure in Q1. EBITDA margin held at 17.6%, but OEM cost pass-through negotiated but not yet confirmed across portfolio. If pass-through stalls, margin targets (17–17.5%) at risk.

Forging division (export-oriented, 25% of group revenue) exposed to weak European auto OEM demand and Chinese competition. Tariff headwinds (Meritor lost ₹30–40 Cr/yr to Trump tariff; now recovering). West Asia crisis noted. Manpower and LPG sourcing challenges compounded.

Marelli Chassis Systems JV (₹105 Cr Q1 revenue, 43% YoY growth) is a major profit contributor but parent company in bankruptcy proceedings. Stake acquisition deal unresolved (target: Sept 30, 2026). Outcome uncertain; potential P&L and accounting treatment impact.

QoQ revenue growth flat at +0.8% (₹238.4 Cr vs prior Q4 ~₹236 Cr estimate). QoQ PAT declined -5.1%. Flat sequential growth despite claimed 'record quarter' signals momentum loss into Q2, contradicting FY27 18–20% growth guidance. Suggests Q1 benefited from Q4 carryover or demand normalization.

Data centre gasket vertical is nascent: only ~5% of gasket business (₹5–7 Cr Q1), targeting ₹30–40 Cr annually by 2027–28. Revenue potential is new and unproven; dependent on Cummins and Kirloskar Oil generator ramp for data-centre backup power. Single-source relationship is both a strength and concentration risk.