Carraro India Ltd

Overview

• Standalone FY2025-26 reporting boundary (April 2025–March 2026).
• Core business: manufacturing axles, transmission systems, and gears for global OEMs.
• 55% of turnover from transmission axles and gears.
• Two plants and two offices at Ranjangaon, Maharashtra; four national locations.
• Exports constitute 35.11% of turnover; 14 international markets.
• Operations serve 7 Indian states + 2 union territories; 14 foreign markets.

Key ESG risks & opportunities

• Energy management: high costs from non-renewables; 40.67 lakh kWh renewable electricity via onsite solar.
• Climate governance: regulatory developments (Net Zero 2070, CBAM) heighten compliance risk; ongoing Scope 1/2 monitoring.
• Waste management: 94% of waste recycled; opportunities through EPR and material efficiency.
• Water management: Maharashtra water-stressed; Zero Liquid Discharge with real-time monitoring.
• Occupational health & safety: LTIFR 0 (employees) and 0.32 (workers); one lost-time injury recorded.
• Governance & ethics: post-listing governance focus; anti-corruption, whistleblower, POSH policies; nine NGRBC principles.

Governance & policy highlights

• Sustainability overseen by Managing Director; no formal sustainability committee yet.
• Policies include ISO 9001/14001/45001, IATF 16949, nine NGRBCs, anti-corruption, whistleblower, POSH.
• Assurance: not applicable; no external assurance reported.
• Compliance events: no fines or penalties reported.
• Code of Ethics exists for directors and group, guiding governance and ethics.

Social responsibility & workforce

• Total workforce: 306 employees; 1,335 workers; female representation 6% of staff, 2% of workers.
• Training: 3 Board trainings, 1 KMP training, 34 employee trainings, 252 worker trainings.
• Well-being spend: 0.16% of turnover; health, safety and skill development emphasized.
• LTIFR: 0 for employees; 0.32 for workers; one lost-time injury recorded.
• Parental leave: four females on maternity leave; three returned, 100% return rate.
• Grievance mechanism: Stakeholder Engagement and Grievance Redressal with dedicated channels.

Environmental performance

• Energy: 13% renewable electricity; onsite solar contributed 40.67 lakh kWh; total energy 120,295 GJ.
• GHG emissions: Scope 1 2,270 tCO2e; Scope 2 13,615 tCO2; total 16,000 tCO2e.
• Waste: total 5,318 MT; 94% recycled; plastic 150.94 MT; hazardous 425.95 MT; non-hazardous 4,734.53 MT.
• Water: total withdrawal 78,634 KL; water intensity 3.51 KL per crore turnover; PPP-adjusted 7.26.
• Discharge: Zero Liquid Discharge across all operations; effluent treatment systems in place.
• Certifications: ISO 9001, ISO 14001, ISO 45001, IATF 16949; target to phase out R22 by 2027.

Stakeholder engagement & complaints

• Stakeholder groups: employees, customers, suppliers, investors, regulators, communities, partners.
• Engagement cadence: investors quarterly; employees weekly/monthly; customers monthly; suppliers weekly; communities quarterly.
• Customer complaints channel via dedicated grievances; no unresolved complaints noted in key categories.
• POSH, sexual harassment, and discrimination complaints largely nil; one product recall noted as an issue.
• Data privacy: privacy policy in place; no data breaches reported.

Other notable metrics

• Exports to non-India markets comprise 35.11% of turnover; 14 countries served.
• Related-party transactions: purchases from related parties 7.55%; sales to related parties 35.01%; investments 100%.
• Top dealers/distributors account for 97.5% of dealer sales; 12 dealers in total.
• Affiliations: one trade association membership (ICEMA).
• Cybersecurity framework exists; no confirmed external assurance; privacy policy active.

Financial performance

• Revenue from operations: ₹22,388.94m; EBITDA: ₹2,474.62m; PAT: ₹1,305.83m.
• EBITDA margin 10.83%; PAT margin 5.72%.
• Revenue grew ~25% YoY; PAT up ~48%.
• Export revenue grew 37% YoY; exports ~36% of total.
• Domestic revenue grew 19% YoY.
• Net debt to equity 0.11x; debt to equity 0.27x.
• Operating cash flow ₹1,308.93m; year-end cash ₹904.09m.

Expansion & growth

• Capex of ₹417m in 2025-26 on axles, transmissions.
• Axle capacity expansion approved to 154,160 units for 2026-27.
• TBH axle ramp-up progressed; BHL driveline growth aided exports.
• Engineering services revenue crossed ₹100m; Montra Electric e-transmission deal ₹17.5m.
• Higher horsepower transmission programs advanced; SOP for Turkey 2026-27, India 2027-28.
• 16 prototypes developed; 4 moved into production.

Capital structure & liquidity

• Consolidated net debt ₹645.15m; debt/equity 0.27x; net debt/equity 0.11x.
• Cash and cash equivalents ₹904.09m at year-end.
• Final dividend proposed ₹6.75 per equity share; payout policy 67.5%.
• Dividend subject to AGM approval; 30-day payout window after approval.

Governance & risk

• Statutory auditors: Deloitte Haskins & Sells LLP; MSKC & Associates appointed for 2026-27.
• Material related party transaction with Carraro Drive Tech Italia S.p.A. (CDTI) approved; omnibus limit ₹10,300m.
• CDTI RPT contains sale/purchase of goods, corporate services, warranties; treated at arm's length.
• Postal ballot approved 29 Mar 2026; CDTI transaction value ~₹10,129.5m already approved.
• Audit Committee oversight; internal controls adequate; no material audit flags.

ESG & CSR

• CSR spend ₹17.34m; CSR policy aligned with Schedule VII.
• ISO certifications: 9001:2015, 14001:2015, 45001:2018, IATF 16949:2016.
• Energy: 13% of electricity from renewables; zero-liquid-discharge (ZLD) in operation.
• Water withdrawal: 76,639 KL; waste: 5,318 MT with 94% recycled.
• LTIFR: employees 0; workers 0.32; one lost-time injury in year.

Meeting Details

• Group meeting scheduled for 18 August 2026 at 10:30 IST onwards.
• Mode: physical meeting at Carraro India's Pune facilities.
• Organizer: Analyst/Investors Meet conducted by Carraro India Limited.
• Participants: Company officials (management) from Carraro India.
• Purpose: discussions will be based on publicly available information; no UPSI will be discussed.

Financial Performance

• Total income for Q1 FY27 was INR 5,587 million, up 12% YoY.
• Revenue from operations stood at INR 5,447 million, up 10% YoY.
• EBITDA was INR 579 million, up 6% YoY, with a 10.4% margin.
• PAT rose 8% YoY to INR 314 million, with a 5.6% PAT margin.
• Domestic revenue was INR 3,795 million (70%); exports INR 1,652 million (30%).
• One-time provision written back in other income: INR 88 million (customs reassessment).

Operations & Segments

• Agricultural revenue INR 2,559 million; construction revenue INR 2,264 million; other sales INR 267 million.
• Agri domestic growth 32% YoY; construction domestic growth 20% YoY.
• Export revenue declined about 14% YoY due to geopolitical disruptions.
• Montra electric project assignments worth INR 33 million completed in July 2026.
• Localization stood at 74%; long-term target 86–88%.
• Four-wheel-drive axle programs progressing; export and domestic volumes gradually improving.
• Export mix around 35%; domestic around 65% long term.

Capex & Projects

• Paint shop construction commenced; portal axle capacity and sub-assembly expansions commissioned.
• Capacity expansion ongoing; debottlenecking to meet rising demand.
• Localization target 86–88%; current localization around 74%.
• Engineering services momentum; higher horsepower configurations; contracts with customers and suppliers.
• Montra progress; start of production targeted for FY28 for Indian customer program.
• Capex supports growth; capacity additions underway to meet forecast demand.

Outlook & Guidance

• Domestic demand remains healthy; supply chains gradually improving.
• Revenue target by FY30: INR 3,500–4,000 crore.
• If no shocks, topline growth around 10% YoY; EBITDA may improve about 0.5pp.
• Worst is over; recovery ahead; runway depends on inflation trajectory.
• Export mix expected around 35% exports; 65% domestic long term.

Q&A Highlights

• Inflation pass-through with a four-month lag; aim for zero net profitability impact.
• Q1 export breakdown: construction 871m, agriculture 424m, other 357m.
• China exposure minimal; exports largely India-centric.
• Turkey higher horsepower exports ramp up gradually; SOPs started.
• Order book remains encouraging; capacity expansion underway to meet demand.

Meeting Details

• Date: 07 August 2026; time: 08:30 IST
• Type/Mode: group earnings conference call; virtual audio conference
• Organiser: earnings call for Carraro India Limited (analysts/investors)
• Purpose: discuss unaudited quarterly results for quarter ended 30 June 2026
• Recording: audio recording available on the company's website
• Participants: company management roles not specified in the filing

Business overview

• Carraro India is a Tier-I supplier of axles, transmissions, and gears for agricultural and construction equipment.
• Part of the Carraro Group, 25+ years presence in India; focus on domestic ag and construction markets.
• Capex and capacity expansions aligned to rising domestic demand for 4WD axles.

Operational highlights

• Q1 FY27 revenue: INR 5,447 mn, up 10% YoY.
• Domestic revenue grew ~26% YoY on robust 4WD axle demand.
• Export revenue declined ~14% YoY due to geopolitical disruptions.
• TBH export programme progressing; domestic TBH expansion with Indian and global OEMs.
• Engineering services momentum; Montra Electric e-transmission project progressing; INR 33 mn assignments received.
• High-HP transmissions: Turkish customer series production started in Q1 FY27; SOP for Indian customer FY28.
• Gears business subdued; ongoing initiatives target gradual recovery.
• Paint-shop construction began; side-drive sub-assembly line and backlash machine commissioned.
• FY26 capex of INR 417 mn on axle and transmission capacity.

Financial performance

• Q1 FY27 revenue from operations 5,447 mn; YoY growth 10%.
• EBITDA 579 mn; EBITDA margin 10.4%.
• Profit after tax 314 mn; PAT margin 5.6%.
• Consolidated FY26 revenue 22,555 mn; PAT 1,306 mn; PAT margin 5.7%.
• Total equity 5,647 mn; equity share capital 569 mn; other equity 5,077 mn.
• Cash & equivalents 904 mn; net cash from operating activities 1,558 mn in FY26.
• FY26 EBITDA 2,475 mn; EBITDA margin 10.8%.
• Total assets 12,688 mn; total equity 5,647 mn.

Capital structure & liquidity

• Borrowings: long-term 1,076 mn; current 339 mn; lease liabilities 128 (LT) and 6 (CT).
• Cash & cash equivalents: INR 904 mn; total equity: INR 5,647 mn.
• Net cash from operations FY26: INR 1,558 mn; financing cash flow negative.

Strategic priorities & outlook

• Management expects positive FY27 growth amid domestic momentum and capacity additions.
• GST-driven 4WD shift to augment demand; capacity expansion planned.
• Export volatility persists; mitigation via ongoing programmes and cost discipline.
• Start of production for Turkish high HP transmission; SOP for Indian customer FY28.
• Capex roadmap: paint shop, TBH capacity, and R&D enhancements.

Risks & mitigation

• Export markets remain uncertain due to geopolitical developments and uneven demand.
• Domestic momentum offsetting risk; supplier and energy costs pressures.
• Mitigations include capacity expansion, cost discipline, and supply-chain improvements.

Governance & leadership

• MD Balaji Gopalan; CFO Davide Grossi; Carraro Group governance and leadership.
• Board includes independent directors; 25+ years presence in Carraro India.

Financial highlights

• Q1 FY27 total income: INR 5,587 Mn, up 12% YoY.
• EBITDA (incl. other income): INR 579 Mn; EBITDA margin 10.4%, up 6% YoY.
• PAT: INR 314 Mn, up 8% YoY; PAT margin 5.6%.

Revenue mix

• Domestic revenue INR 3,795 Mn; export revenue INR 1,652 Mn.
• Domestic revenue grew ~26% YoY; exports declined ~14% YoY.

Operational highlights

• TBH axles ramp-up for a major international OEM continued with strong traction.
• Domestic TBH expansion and new Indian OEM projects advancing.
• BHL drivelines to Indian OEMs grew ~18% YoY; overall Indian OEM BHL sales up ~14% YoY.
• Engineering services: Montra Electric INR 175 Mn project progressing; prototype order received.
• Assignments worth INR 33 Mn finalized July 2026.
• Series production for Turkish high-HP transmission began Q1 FY27.
• Indian high-HP transmission start of production targeted FY28.
• Gears business subdued; bull gears nomination ~INR 150 Mn p.a. from FY28.
• Two new customers or projects being pursued.
• Export market conditions remained challenging; domestic demand resilient.
• Paint-shop construction commenced; side-drive subassembly line and backlash machine commissioned.
• FY26 capex: INR 417 Mn for telescopic-handler axles, high-performance transmissions, capacity expansion.

Outlook and strategy

• Q1 FY27 revenue up 10% YoY; domestic momentum robust, exports weaker.
• Capacity expansion and cost discipline expected to support FY27 revenue and margin growth.
• Start of production milestones on Turkish and Indian high-HP programs remain on track.

Meeting Details

• Date and time: Friday, 7 August 2026 at 08:30 IST.
• Type and mode: earnings conference call, virtual.
• Event: Q1 FY27 Earnings Conference Call by Carraro India Limited.
• Key company participants: MD; WTD & CFO; Management Team.
• Purpose: discuss Q1 FY27 results and financial/operational performance.