Strong growth masked by margin compression; recovery pencilled in Q2-Q3

Delivered revenue +23.5% YoY; outgrew market by 4% (industry 22%, Pricol 26%)

EBITDA margin compressed to 11.41% from normal 12.5-13%; implies ~1.5% loss from cost pressure

Currently recovering via customer price indexation; minimum wage cost (~21 Cr) still under negotiation

EBITDA margin well below company average; capacity constraints limiting growth

Segment-level data not independently verified; aligns with management positioning

Prior call signalled 680-700 Cr CAPEX; now detailed at 700 Cr over 18-24 months. DIS demerger adds strategic optionality and speed to capital-raise for technology partnerships.

Prior call warned of margin pressure; Q1 delivered 1.5% margin loss (11.4% vs 12.5-13% steady-state). Minimum wage now ~21 Cr/annum additional cost, not fully recovered.

Honda, Mahindra, EV makers (Ather, Rivian, etc.) added. Polymer business capacity-constrained; 400 Cr CAPEX to double capacity from 1000-2000 Cr but will take 9-12 months.

Prior strategy included selective acquisitions; now suspended to focus on organic growth, CAPEX, and demerger. Board decision at latest meeting.

DIS tech evolving rapidly; need capital & tech partners. Combined entity hard to attract investors (different risk appetites). Demerger gives DIS agility for partnerships and capital, keeps margins independent.

Polymer hit harder than DICVS. 75% revenue gets Q2 indexation, balance Q3. Minimum wage (~21 Cr/yr) still under negotiation. Another 0.5% EBITDA margin in system via price & indexation if rupee stable.

Both DICVS & ACFMS grew ~25%. Two-wheeler +28% (outperformed 23% industry). DIS market share: 30-35% in 2W, 2/3 in CVs, 8-9% in PV (Tata-dependent).

700 Cr over 18-24 months: 400 Cr Polymer (new capacity, TVS campus exit), 150-180 Cr DICVS, 120 Cr ACFMS. Plants in Hosur, Mysore, Aurangabad, Bhiwadi, Sanand coming online.

Honda business robust. Recently won large plastic division contract. Putting some business on hold due to capacity constraints. Targeting Honda as high-value, high-growth customer in next 3 years.

Developed world-class e-cockpit proof-of-concept; shown to customers. Adoption very low in India (2W has no real estate). MNC competitors have 50x volume advantage. Focus remains 2W, CV, off-road.

Polymer revenue 249 Cr, EBITDA 7.8%. Raw material and LPG inflation most severe. Will recover in Q2-Q3.

Real revenues kick in from FY28. Currently in early stage supply. Disc brake & switches to matter only from FY28 onwards.

Target Rs. 8000 Cr by Calendar Year '30 (FY31) via organic + some inorganic growth. Polymer to 2.5x from FY25 base.

Minimum 4 quarters, hoping for 12 months. Vedanta took 18-24 months despite size. From October, divisions operating as demerged entities internally.

M&A paused for 12 months due diligence found asset quality poor. Full hands with new programs, CAPEX, demerger. Will revisit after demerger if right asset at right value.

2W TFT penetration ~7-8% currently, expected to double in 2-3 years. Hybrid LCD-TFT also emerging for cost. PV: 8-9% (Tata dependent). CV: 2/3 share.

Mix of organic growth (strong market, new products, capacity) and selective inorganic. Maintained from prior calls; not upgraded despite Q1 beat on volume.

Currently 1000 Cr capacity, targeting 2000 Cr. Assumes capacity additions ramp on schedule (9-12 months), customer production ramps, and orders hold. Timing risk.

Grounded in won business, new product pipeline, and market share gains. Conservative given Q1 delivered +4-6% delta.

Management claims 1.5% loss in Q1 from cost headwinds. Recovery via 75% price indexation in Q2 and 25% in Q3. Assumes no further rupee depreciation or commodity shocks.

Unresolved P&L impact. Management optimistic on recovery but not finalized with OEMs yet.

Detailed facility roadmap (5 new plants identified, timelines given). Aligns with strategy to double Polymer capacity, win new programs, support demerged entity independence.

West Asia crisis, Iran war resumption driving crude, LPG, freight spike. Rupee at all-time low; management flagged 3-digit (100+) USD parity risk. Import-dependent (electronic parts, aluminum) — unhedged exposure material.

5 new Polymer plants + DICVS/ACFMS facilities to be commissioned over 18-24 months. If any delay, cost overruns, or underutilization, FY30 revenue and margin targets at risk. Polymer target depends on capacity reaching 2000 Cr turnover.

Core recovery narrative rests on 75% of revenue indexed for price increase in Q2, 25% in Q3. If customers resist (citing demand softness, competitive pressure), or if only partial absorption, margin recovery miss by Q3-end would be material. Minimum wage (21 Cr) negotiation still open.

DIS demerger (driver information systems business, ~30-35% of revenue) targeted for 12 months but faces SEBI/NCLT/ROC approvals. Vedanta precedent took 18-24 months. Delays could constrain capital-raise for tech partnerships and limit agility. Demerged entity must demonstrate standalone viability.

PV segment DICVS ~8-9% market share, dependent almost entirely on Tata Motors (8 of 10 Tata cars use Pricol). Loss of Tata business, platform shift, or production cuts would be material. Polymer gaining new customers (Honda, EV makers) but volume still ramping.

Disc brakes & switches both deferred to FY28 for material revenue (production started but volumes minimal). Export business expected in 2-3 years. Delays or order cancellations would push margin improvement timeline.