Automotive Axles (505010) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 saw strong momentum after a slow start, with most orders converted and robust demand from OEMs post-GST rate cuts.

• New product launches, especially MS-185, gained significant traction, contributing to operational efficiency and sales growth.

• No loss of market share in the core M&HCV segment; delivery performance remained above 97%.

• Unaudited financial results for the quarter and nine months ended December 31, 2025, were approved by the Board on February 4, 2026.

• Interim CFO appointed and several changes in senior management personnel effective February 4, 2026.

Financial highlights

• Q3 revenue was ₹5,622.94 million, total income ₹5,700 million, with EBITDA at ₹725 million (12.9% margin).

• Sequential revenue growth was 21%, with EBITDA margin up 52 bps quarter-over-quarter.

• Year-over-year, revenue grew 6% and EBITDA 14%, with margin up 93 bps.

• Net profit for Q3 FY26 was ₹388.06 million, compared to ₹359.54 million in Q2 FY26 and ₹395.81 million in Q3 FY25.

• Exceptional item of ₹119.87 million due to new labor codes impacted profit before tax (PBT) and PAT, with PBT at ₹512.14 million and PAT at ₹388.06 million.

Outlook and guidance

• Q4 is expected to be a high quarter, with anticipated industry volume growth of 5%-10% year-over-year.

• Capacity utilization is around 80%, with plans to add capacity by Q3 FY27 to meet future demand.

• Management expects to keep pace with industry growth, barring segments where not present (e.g., buses).

• Company continues to monitor the impact of new labor codes and will evaluate further effects on employee benefit liabilities in future quarters.