Strong growth masked by India margin compression; restructuring working but execution risk remains

GCM EBITDA margin confirmed 12.6% (up 680 bps YoY). Revenue growth 27–28% (adjusted to ~23% for acquisition timing). Represents tangible restructuring proof.

ICM revenue +21%, but EBITDA growth only +4.2%; margins compressed 200 bps to 13%. NPM fell from ~5.6% prior-year to 4.9% this quarter. Wage pass-through still in negotiation ('some customers agreed, some dally').

Consolidated EBITDA 129 Cr; margin 12.1%. Revenue 1,069.6 Cr matches claim. Growth metrics confirmed by delivered results.

Chairman initially evasive on one-off question, later clarified restructuring tightness + top-line growth + cost projects. No tariff write-backs quantified. New contracts at current pricing mentioned. Analyst skepticism remained; claim partially substantiated.

GCM EBITDA margin 12.6% vs 5.8% prior-year (680 bps up). Restructuring delivered. Previously flagged as risk, now de-risked.

Standalone EBITDA margin fell ~150 bps; ICM margin 13% vs 15%. Wage inflation 'first time in years' passed to customers but not yet accepted by all. Material cost pass-through easier per management.

SED revenue +48%, EBITDA +100%. Now on 'war footing' to expand; prior call indicated capacity constraints. Orders 'flooding in'; multiple OEM launches ramping.

CBS revenue +110%, pads/shoes +80% (still small base). Strategy is 'complete braking solution' across 2-wheeler EV/ICE. Ather award signals validation. Long-term 3–5 year story, not immediate.

Chinese EV OEM: 25 cable projects won, 5–6 launched in Q1, balance rolling out. Annualized ~USD 5M + USD 2M (Europe) + USD 1.2M (Japan) = USD 8.2M new win base per management.

Restructuring made operations tight & lean. Top-line 20% growth drops to gross margin automatically. Cost improvement projects initiated last year. Nothing one-off.

Material pass-through not issue. Wage pass-through significant, esp. NCR. Some customers agreed; some still negotiating. Takes 1–2 quarters to convince. Cost reduction ongoing; should recover 100 bps by Q2–Q3.

No. SCS merged into GCM. All work in tandem. LDC/Wescon/SCS names vanish from scene. GCM operates as single entity. Separate disclosure has no meaning post-restructuring.

Second tranche SCS (Canada/China) closed May; no Apr–May revenue in prior year. Adjusted growth ~23%. July data shows still strong double-digit. August holiday impact uncertain. Expect continued strong double-digit for rest of year.

EV is strong growth driver, esp. SED and ICM. Focus is agnostic—cables, braking (critical for EV), sensors, clusters. EV ramp in India + global; braking content per vehicle same EV vs ICE but pricing higher (₹400–₹7,000 range). Content per vehicle increasing.

Three product groups: display systems (instrument clusters), actuators & sensors, TPS. Growth across all three, multiple customers. Six launches this month. War footing capacity expansion. July highest sales month.

Tariff recovery is double-edged. If customer gave relief, we give it back. Only delta from unrecovered tariff is retained. Most passed on last year. Not very significant.

Braking is safety-critical; OEMs do extensive validation. Total tech stack approach (levers, cables, hoses, reservoir, calipers, rotors, pads, ABS). Making inroads with certain customers on certain portions. Vision: own complete system responsibility. Early stage; overall body growth not hands/legs/brain segmented.

Product developed; taking to US then Europe customers. Will take time to filter to business. India seating market emerging; tie-ups of global seating firms bringing tech to India. Discussions ongoing with seating companies and leading EV OEM (4–5 projects in R&D, 2–3 years to market). Existing 2W actuation continues.

Business done out of Lone Star in China. Pitched as global supplier to OEM with global ambition (Hungary, Mexico). 25 different cable projects won; 5–6 launched. Balance over next 12 months. Lone Star flat last 2 years but seeing ~20% growth this year. Plan to scale to Europe/North America launches.

Q1 achieved 24% growth YoY. Guidance issued May 2026. Reaffirmed on call; no change despite margin pressure.

Q1 achieved 12.1% margin. Guidance requires 12.5%+ average full-year. India margin recovery in Q2–Q3 is linchpin; wage pass-through timing uncertain.

Currently above at 12.6%. Chairman stated sticking to 10–12% guidance, citing product mix / new project variability. GCM guidance appears conservative.

ICM currently 13% (200 bps miss). PLE guidance ~12% but Q1 margin depressed (delayed pricing). Recovery claimed for Q2–Q3 but unproven.

Q1 near 10% (EBITDA 100% growth). Guidance on track. Capacity expansion ongoing; margin sustainability depends on conversion of pipeline to orders.

ICM margin down 200 bps to 13% YoY due to wage inflation. Management claims pass-through to customers in Q2–Q3, but negotiations ongoing. Some customers 'agreed'; some 'still dally.' If pass-through fails, margin gap is permanent.

GCM EBITDA margin jumped 680 bps to 12.6% in Q1. Management claims no one-offs (restructuring + cost projects + new contracts at current prices). Risk: margin normalizes below 12% guidance as new contracts mature or competitive pressure increases.

PLE EBITDA down 45% in Q1 due to delayed price increases. Management claims pricing now in effect and US retailer ramp ('4x store rollout') will drive recovery. Risk: ramp delays, or retailer demand softer than expected, or further competitive pressure.

Chairman noted global automotive & non-automotive muted. Middle East conflict, oil/commodity volatility, shipping disruptions ongoing. GCM working on tariff recovery with US, VAT recovery in China/Canada/Germany. Risk: tariffs escalate or recovery limited.

SED on 'war footing' capacity expansion due to 'flooded with orders and new launches' (6 launches in single month). Risk: capacity addition delays, quality issues during ramp, or order wins don't materialize.