Automotive Axles (505010) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 faced headwinds from new M&HCV legislation and tariffs, but margins were protected and operational performance remained resilient.

• Domestic consumption and agriculture sector supported demand, with manufacturing showing strong growth in August and September.

• Product launches included a 15-meter bus axle and new axles for electric vehicles, with recognition for aftermarket delivery performance.

• Board approved unaudited financial results for the quarter and half year ended September 30, 2025.

• CFO Ranganathan Sankaran announced early superannuation, effective November 21, 2025.

Financial highlights

• Q2 revenue was ₹4,617.60 million, down from ₹4,946.84 million in Q2 FY25; H1 revenue at ₹9,511.36 million.

• Q2 EBITDA margin was 12.4%, up from 11.7% in the previous quarter and 11.4% last year.

• Net profit for Q2 FY26 was ₹359.54 million, nearly flat year-over-year.

• EPS for Q2 FY26 stood at ₹23.79, nearly unchanged year-over-year.

• One-time items and FX benefits contributed to higher margins; normalized EBITDA margin estimated at 11.7%-11.8%.

Outlook and guidance

• Q3 and Q4 are expected to be stronger, potentially outperforming last year due to positive GST sentiment and robust domestic demand.

• Replacement demand is expected to peak by 2029-2030, with market volumes stabilizing and cyclicality reducing.

• EBITDA margin target remains mid-teens (13%+), with improvement expected as volumes recover and fixed cost leverage increases.

• No explicit forward-looking guidance provided in the reviewed period.