Automotive Axles (505010) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 saw a soft market, but margins were protected and operational performance remained strong, aided by the ramp-up of new MS195 Axles for a key customer.

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

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

• Closure of the Hosur manufacturing facility effective April 1, 2025, due to a change in business model.

• The company is focused on new product launches and increasing share of business to offset market softness.

Financial highlights

• Q3 FY25 total income was ₹5,307.44 million, up from ₹4,946.84 million in Q2, but down from ₹5,413.32 million 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% in Q3 FY25 from 11.6% in Q2 and 11.5% in Q3 last year.

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

• For the nine months ended December 31, 2024, revenue was ₹15,178.95 million and net profit was ₹1,096.08 million.

Outlook and guidance

• Management expects Q4 to be strong, with overall FY25 volumes close to last year despite a 5% decline in the M&HCV market.

• FY25 M&HCV market expected to be down 5% year-over-year, with volumes around 400,000-403,000 units.

• FY26 market forecast is flat, but new product pipeline and share gains are expected to support revenue.

• Long-term strategy targets doubling revenue by 2029-2030, driven by product mix, value realization, exports, and aftermarket growth.

• 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.