Automotive Axles (505010) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 saw a soft market, but margins were protected and new product ramp-ups executed successfully.

• Management remains focused on cost optimization and value engineering through Mission 25 initiatives.

• Board approved unaudited financial results for the quarter and nine months ended December 31, 2024.

• Amendments made to the Code of Conduct for Insider Trading and Fair Disclosure of Unpublished Price Sensitive Information, effective February 4, 2025.

• Appointments of two new Senior Management Personnel and an Additional Independent Director were finalized.

Financial highlights

• Q3 FY25 total income was ₹5,307.44 million, up 7.2% sequentially from ₹4,946.84 million in Q2, but down 1.6% year-over-year.

• Net profit for Q3 FY25 was ₹395.81 million, compared to ₹359.73 million in the previous quarter and ₹391.45 million in Q3 FY24.

• EBITDA margin improved to 12% from 11.6% in Q2 and 11.5% in Q3 last year.

• Capacity utilization currently at 65%-70%, with plans to reach 80% as demand grows.

• Basic EPS for Q3 FY25 was ₹26.20, up from ₹23.80 in the previous quarter.

Outlook and guidance

• M&HCV market expected to be flat in FY26, with Q4 volumes anticipated to match last year.

• Revenue growth to be driven by new product launches, higher value realization per axle, and export/aftermarket expansion.

• Targeting a CAGR of 14%-16% to double revenue by 2029-2030.

• Margins expected to be sustainable at 12%-13%, with potential for 1%-2% improvement through modernization.

• The company is evaluating its future course of action after the rejection of a resolution to enter into material related party transactions, with no expected adverse impact on going concern.