MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion is intended to convey the managements perspective on our
financial condition and results of
operations for Fiscals 2026, 2025 and 2024. Unless otherwise stated, the financial
information in this section has been derived
from the Restated Consolidated Financial Information.
Our financial year ends on March 31 of each year. Accordingly, references to
"Fiscal 2026", "Fiscal 2025" and "Fiscal 2024",
are to the 12-month period ended March 31 of the relevant year.
Ind AS differs in certain respects from Indian GAAP, IFRS and U.S. GAAP and other
accounting principles with which
prospective investors may be familiar. Please also see "Risk Factors-This Red Herring
Prospectus contains certain non-GAAP
financial measures and other statistical information related to our operations and
financial performance. These non-GAAP
measures and statistical information may vary from any standard methodology that is
applicable across the industry, and
therefore may not be comparable with financial or statistical information of similar
nomenclature computed and presented by
other companies." on page 42. This discussion contains certain forward-looking
statements that involve risks and uncertainties.
Our actual results may differ materially from those anticipated in these forward-looking
statements as a result ofcertain factors,
such as the risks set forth in the chapters entitled "Risk Factors" and
"Forward-Looking Statements" beginning on pages 24
and 22, respectively.
Unless otherwise indicated, industry and market data used in this section have been
derived from the CRISIL Report, which
has been commissioned and paid for by our Company exclusively in connection with the Offer
for the purposes of confirming
our understanding of the industry in which we operate. The data included herein includes
excerpts from the CRISIL Report and
may have been re-ordered by us for the purposes ofpresentation. The CRISIL Report forms a
part of the material documents
for inspection and a copy of the CRISIL Report is available on the website of our Company
at
https://dhoottransmission.com/investor-relations/ipo-related-disclosures until the
Bid/Offer Closing Date. Unless otherwise
indicated, operational, industry and other related information derivedfrom the CRISIL
Report and included herein with respect
to any particular year refers to such information for the relevant calendar year. For
further details, please see "Industry
Overview " on page 180. CRISIL is an independent agency and is not a related party of
our Company, our Subsidiaries,
Directors, Promoters, Key Managerial Personnel, Senior Management or the Book Running Lead
Managers. Unless otherwise
indicated, operational, industry and other related information included herein with
respect to any particular year refers to such
information for the relevant financial year. For further details, see "Risk
Factors-Certain sections of this Red Herring
Prospectus contain information from the CRISIL Report which has been exclusively
commissioned and paidfor by us in relation
to the Offer and any reliance on such information for making an investment decision in
this offering is subject to inherent risks. "
on page 60.
During the Fiscal 2026, our Company acquired Dhoot Holdings Private Limited and its
downstream entities in a common
control business combination. The statutory financial statements of Dhoot Holdings Private
Limited as at and for the year
ended March 31, 2026, March 31, 2025 and March 31, 2024 had previously been prepared on a
consolidated basis. In
accordance with the requirements of Appendix C to Ind AS 103, the financial information
included in the Restated Consolidated
Financial Information in respect of Fiscals 2026, 2025 and 2024 had been restated as if
the business combination had occurred
with effect from April 1, 2023. While accounting for the acquisition and restating the
financial information for all Fiscals
included in the Restated Consolidated Financial Information, the assets and liabilities of
the acquired entities were reflected at
their carrying amounts and no adjustments were made to determine the fair value.
Similarly, no new assets or liabilities were
identified and recorded. For further details, see "Restated Consolidated Financial
Information-Note 44A- Business
combinations" on page 445.
Overview
We are one of Indias leading electrical and electronics ("E&E")
companies (Source: CRISIL Report). We design, engineer,
manufacture and supply critical wiring harnesses that integrate electronic sensors and
controllers, switches, terminals,
connectors, junction boxes, high-voltage interconnection systems and data cables,
delivering robust, application-specific
architectures across platforms. We serve both automotive and non-automotive applications,
supporting stringent performance,
safety and reliability requirements for OEMs. In line with the industrys shift in
powertrain, we cater to the full spectrum of
powertrain architectures across customer segments and end markets. We manufacture wiring
harnesses and electrical
distribution systems for internal combustion engine ("ICE") vehicles and
electric vehicles ("EV"). Our offerings also include
battery packs, switches, sensors (such as ABS sensors, lean angle sensors, side stand
sensors and temperature sensors),
controllers (such as USB chargers and FM controllers) and power supply cords.
We have a diversified presence across multiple end-markets, extending beyond 2W and 3W
into commercial vehicles ("CVs"),
off-highway vehicles ("OHW"), and farming and industrial equipment.
Principal Components of Results of Operations
Income
Revenue from operations
Our revenue from operations primarily comprises income from contracts with customers
for the sale of products, supplemented
by service income and operating income from the sale of scrap and government grants.
Our revenue base is predominantly domestic. For Fiscals 2026, 2025 and 2024, revenue
from operations within India aggregated
to Rs.40,965.43 million, ^31,051.97 million and Rs.24,388.25 million, respectively and
revenue allocated to customers outside
India aggregated to Rs.4,284.12 million, Rs.3,396.66 million and Rs.3,589.01 million,
respectively.
Government grants recognized within operating income relates to the state of Industrial
Promotion Subsidy (IPS) under
Maharashtras Packaged Scheme of Incentives - 2019 (PSI 2019) ("IPS"),
available to our Subsidiary, Dhoot Automotive
Systems Private Limited ("DASPL"). Under the IPS, benefits include
electricity duty exemption for nine years from September
1, 2022 to August 31, 2031 and 100% stamp duty exemption on eligible land purchases or
leases. The IPS incentives are linked
to eligible fixed asset investments by DASPL and are to be realized based on GST collected
and deposited on the sale of finished
goods, with an entitlement equivalent to 77.77% of the eligible investment over a defined
period.
Other income
Our other income primarily comprises interest earned on financial assets at amortized
cost, net gains from foreign currency
transactions, unwinding of discount on call amounts of shares receivable, and
miscellaneous income.
Expenses
Our major expenses include cost of materials consumed, employee benefits expense,
finance costs, depreciation and
amortization expenses and other expenses.
Cost of materials consumed
Our cost of materials consumed forms a significant portion of our total expenses. The
table below sets forth our cost of materials
consumed, including as a percentage of our total expenses, for the Fiscals indicated:
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2024 |
||||
Particulars |
Amount (f millions) |
% of total |
Amount (f millions) |
% of total expenses |
Amount (f millions) |
% of total expenses |
Cost of materials consumed |
30,689.82 | 76.20% | 22,567.38 | 74.86% | 18,289.17 | 75.85% |
Total expenses |
40,277.54 | 100.00% | 30,146.42 | 100.00% | 24,111.84 | 100.00% |
Employee benefits expense
Our employee benefit expenses primarily include salaries, wages and bonus, stipend to
apprentice, staff welfare expenses and
employee stock option expenses. It also includes contributions to provident and other
funds and gratuity expenses. The table
below shows our on-roll employee base for the Fiscals indicated:
Particulars |
As of March 31, |
||
| 2026 | 2025 | 2024 | |
Number of employees |
2,735 | 2,040 | 1,984 |
We use a balance of full-time and contractual labor to manage cyclical demand for our products. For further information, see
"Risk Factors-We depend on contract labor for carrying out operations at our
manufacturing facilities and any disruption to
the availability of contract labor for our manufacturing facilities or our inability to
control the cost of our contract labor could
adversely affect our operations. Further, we may be held responsible for paying wages of
such workers, if independent
contractors through whom such workers are hired default on their obligations, and such
obligations could have an adverse
effect on our results of operations and financial condition. " on page 54.
Finance costs
Our finance costs include bill discounting charges, factoring charges, and interest on
term loans, vehicle loans, other loans,
working capital loans, other unsecured loans and micro enterprises and dues to small
enterprises and other vendors. It also
covers interest on lease liabilities and interest expenses on consideration payables
towards investment in equity shares, net of
borrowing costs capitalized.
Depreciation and amortization expenses
Our depreciation and amortization expenses include depreciation on property, plant and
equipment, amortization of intangible
assets, and depreciation on right-of-use assets.
Other expenses
Our other expenses primarily include (i) subcontracting charges, (ii) power, water and
fuel costs, (iii) freight expenses and (iv)
repairs and maintenance of building, vehicle, plant and machinery, (v) professional fees
and other general repairs and
maintenance activities.
Principal Factors Affecting our Financial Condition and Results of Operations
The paragraphs below discuss certain factors that have had, and we expect will continue
to have, a significant effect on our
financial condition and results of operations.
1. Macro-economic conditions, factors affecting the 2 W and 3 W automotive industry
We derive a significant portion of our revenue from operations from the design,
manufacture and sale of components
and solutions to OEMs manufacturing 2W and 3W vehicles and are therefore heavily dependent
on the performance
of the 2W and 3W automotive sector in India.
The table below sets forth our revenue from sales to 2W and 3W automotive sector in
India, for the Fiscals indicated,
which are also expressed as a percentage of our revenue from operations:
Particulars |
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2024 |
|||
| Revenue from operations (r millions) |
% of revenue |
Revenue from operations (r millions) |
% of revenue |
Revenue from operations (r millions) |
% of revenue |
|
2W sector in India |
29,626.97 | 65.47% | 23,049.09 | 66.91% | 18,052.79 | 64.53% |
3W sector in India |
5,817.77 | 12.86% | 4,305.00 | 12.50% | 3,275.70 | 11.71% |
Others? |
9,804.81 | 21.67% | 7,094.55 | 20.59% | 6,648.78 | 23.76% |
Revenue from operations |
45,249.55 | 100.00% | 34,448.63 | 100.00% | 27,977.26 | 100.00% |
Note:
(1) Others include commercial vehicle, off-road, farm vehicle and non-auto sectors in India and outside India.
The impact of end customer demand for our OEM customers products therefore affects our
results of operations. The
levels of demand for wiring harness and other components we manufacture depend primarily
on conditions in the 2W
and 3W automotive industry in India, which, in turn, depend to a large extent on general
macro-economic conditions.
Stronger macro-economic indicators tend to correlate with higher demand for automotive
vehicles, while weaker
macro-economic indicators tend to correlate with lower demand for automotive vehicles. The
cyclical nature of general
macro-economic conditions and, therefore, of the automotive industry, means that our
results of operations can
fluctuate substantially from period to period. We expect that macro-economic factors and
conditions in the Indian
automotive industry, particularly changes in consumer confidence, employment levels, fuel
prices, consumer spending
on passenger vehicles, urbanization, government policies and interest rates, will continue
to be the most important
factors affecting our revenues and results of operations. Other factors, such as our
competitiveness, quality and pricing,
have an effect on our market share and our ability to win customers in competitive
situations, but the overall direction
of the automotive industry tends to have a more pronounced effect on our revenues and
results of operations.
Customer demand for our products depends on the end markets for their products. The
Indian automotive sector has
historically seen significant periodic fluctuations in overall demand. The length and
timing of any cycle in the
automotive industry cannot be predicted with certainty, and we cannot predict when
manufacturers will increase or
reduce production. 2W and 3W production and sales are influenced by various factors,
including consumer demand.
Consumer demand is affected by employment and income levels, fuel prices, economic
conditions, demographic
trends, interest rates, urbanization, premiumization trends and the availability of
automobile financing.
See "Industry Overview" beginning on page 180 of this Red Herring
Prospectus, for a discussion of macro-economic
conditions in the global economy and Indian economy, respectively, and a more detailed
description of the exterior
lighting and automotive components industries in the markets in which we operate.
2. Our customers and their demand for our products
Our financial performance has largely been driven by, and a key factor to our future
success will be, our ability to
continue to deliver value for our OEM customers, increase our customer base, and deepen
our relationships with our
existing customers.
The table below sets forth the number of customers we served in the Fiscals indicated:
Particular |
Fiscal |
||
| 2026 | 2025 | 2024 | |
Number of customers |
495 | 466 | 436 |
Our customers include global and well-known names such as Bajaj Auto Limited, TVS Motor
Company Limited,
Honda Motorcycle and Scooter India Private Limited, and Royal Enfield (a unit of Eicher
Motors Limited). Our OEM
customers had a combined share of 66.45% and 66.82% of the Indian 2W market in Fiscal 2026 and 2025, respectively.
(sSource: CR1SIL Report).
The tables below sets forth the revenue from operations derived from our top ten
customers (based on Fiscal 2025) for
Fiscals indicated:
Particulars |
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2024 |
|||
| Amount (f millions) |
% of Revenue from operations |
Amount (f millions) |
% of Revenue from operations |
Amount (f millions) |
% of Revenue from operations |
|
Revenue from top |
32,379.28 | 71.56% | 24,521.29 | 71.18% | 18,512.03 | 66.17% |
Revenue from top ten |
36,622.42 | 80.93% | 28,181.69 | 81.81% | 21,794.64 | 77.90% |
Revenue from |
45,249.55 | 100.00% | 34,448.63 | 100.00% | 27,977.26 | 100.00% |
We expect the significance of our top customers to remain high. For further
information, see "Risk Factors- We are
dependent on our top five and top ten customers. Our top ten customers (based on
contribution to revenue from
operations in Fiscal 2026) contributed 80.93%, 81.81% and 77.90% of our revenue from
operations in Fiscals 2026,
2025 and 2024, respectively. Any failure to maintain our relationship with these customers
will have an adverse effect
on our business, results of operations, cash flows and financial condition." on
page 25.
3. Evolving technological and market trends in the 2 W and 3 W automotive industry towards electrification
The automotive industry is undergoing significant technological change driven by
electrification. As an E&E company,
we engage in designing, engineering, manufacturing and supplying critical wiring harnesses
that integrate electronic
sensors and controllers, switches, terminals, connectors, junction boxes, high-voltage
interconnection systems and data
cables, delivering robust, application-specific architectures across platforms (Source:
CRISIL Report) . In line with the
accelerating shift to EVs, our portfolio for electric 2W and 3W vehicles includes wiring
harnesses, battery packs,
switches and electronic sensors. Every battery electric vehicle (BEV) or plug-in hybrid
adds incremental harness value,
particularly for high-voltage cabling, battery management harnesses, and thermal control
lines, expanding the
addressable market by up to 2 to 3 times compared to conventional internal combustion
engine (ICE) models (Source:
CRISIL Report) .
The table below sets forth our revenue from sale of products for EV vehicles and ICE
vehicles for the Fiscals indicated,
which are also expressed as a percentage of our revenue from operations:
Particulars |
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2024 |
|||
| Revenue from operations(f millions) |
% of revenue |
Revenue from operations (f millions) |
% of revenue |
Revenue from operations (f millions) |
% of revenue |
|
ICE |
28,262.58 | 62.46% | 21,207.56 | 61.56% | 18,891.74 | 67.53% |
EV |
10,935.59 | 24.17% | 8,689.24 | 25.22% | 4,529.82 | 16.19% |
The market for EVs remains relatively new and rapidly evolving. As platform
architectures, regulatory requirements
and industry standards continue to develop, we will have to develop our end-to-end
capabilities, from design and
prototyping through tooling and vertically integrated manufacturing to adapt to
technological and other changes in the
EV market. Our ability to take advantage of rising EV penetration in India and
internationally, particularly in the 2W
and 3W segments, will be critical to our future success. For risks related to the EV
market and our growth strategy, see
"Risk Factors-The development of technologically advanced products involves a
lengthy and expensive process with
uncertain timelines and outcomes. Some of our product or process development decisions may
not meet our
expectations, and our investment in such projects may be unprofitable A on page 38.
4. Operating Costs, Efficiencies and Raw Material Costs
Given the nature of our business, our ability to manage our operating costs and
efficiencies is critical to maintaining
our competitiveness and profitability. Our profitability is partially dependent on our
ability to spread fixed production
costs over higher production volumes. In addition, we face substantial pressure from our
customers to reduce prices,
and in order to maintain our profitability, we must be able to reduce our operating
expenses. We continually undertake
efforts to reduce our costs in order to protect our margins, rationalizing suppliers,
negotiating volume discounts,
outsourcing non-critical processes, reducing energy usage, rationalizing our manpower and
other operational
efficiencies.
We also incur certain costs in order to ensure that the products that we supply to our
customers are of high quality and
free of defects. Such costs relate to matters such as manpower, systems deployment and
rejection and re-working of
products. Quality control is critical to our operations and failure to prevent the passing
down of defects to our customers
may lead to significant financial penalties.
In addition, cost of materials consumed including changes in inventories of finished
goods and work in progress
constitute the most significant portions of our total expenditures, representing (in
aggregate) 66.14%, 64.83% and
64.50% of our revenue from operations in Fiscals 2026, 2025 and 2024, respectively. Our
primary raw materials
include copper, polymers and brass, and components such as connectors, terminals, cables,
mouldings and electronic
components. We do not enter into any firm commitment long-term contracts with our
suppliers.
Prices for these raw materials can be volatile and depend on commodity prices, which,
in turn, depend on changes in
global economic conditions, industrial cycles, supply-and-demand dynamics, attempts by
individual producers to
capture market share, and market speculation, among other factors.
5. New business development, acquisitions and partnerships
Our ability to consistently win new product development orders for wiring harnesses and
other products enhances our
competitiveness and market share. A substantial portion of the new business we are awarded
by OEMs and Tier-1
suppliers is granted well in advance of product launch. Launching new products is a
complex process that depends on
production readiness of our facilities and those of our suppliers, availability of tooling
and equipment, workforce
readiness, process validation and PPAP, initial product quality and logistics.
We actively pursue business development opportunities and estimate future sales from
awarded orders using
customer-projected volumes and take-rates together with our content-per-vehicle
assumptions across low-voltage and
high-voltage harnesses, battery interconnects and related sub-assemblies. While organic
growth through investment in
technology, order execution and customer relationships remains our core strategy, we
continue to evaluate inorganic
opportunities that provide complementary technologies or market access. Each new
acquisition that we complete may
materially affect our results of operations and financial profile.
6. Fluctuations in exchange rates
We present our financial statements in Indian Rupees. However, a portion of our
business transactions are denominated
in foreign currencies, as we both sell products in export markets and purchase supplies
from foreign markets. The table
below sets forth our revenue from operations by geography for the Fiscals indicated, which
are also expressed as a
percentage of our revenue from operations:
Revenue |
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2024 |
|||
| Revenue from operations (f millions) |
% of revenue |
Revenue from operations (f millions) |
% of revenue |
Revenue from operations (f millions) |
% of revenue |
|
Within India |
40,965.43 | 90.53% | 31,051.97 | 90.14% | 24,388.25 | 87.17% |
Outside India |
4,284.12 | 9.47% | 3,396.66 | 9.86% | 3,589.01 | 12.83% |
Revenue from |
45,249.55 | 100.00% | 34,448.63 | 100.00% | 27,977.26 | 100.00% |
Accordingly, we are affected by the exchange rates between the Indian Rupee and the
U.S. dollar, euro and British
Pound, which have fluctuated in the past and will fluctuate in the future. For further
details in relation to RBI reference
exchange rates for the U.S. Dollar, Euro and Pound sterling, see "Certain
Conventions, Use of Financial Information
and Market Data and Currency of Presentation" on page 17. Depreciation of the
Indian Rupee against the U.S. dollar,
euro, British Pound and other foreign currencies may adversely affect our results of
operations by increasing the cost
of our raw materials or any proposed capital expenditure in foreign currencies. Similarly,
appreciation of the Indian
Rupee against foreign currencies may positively affect our results of operations by
decreasing the cost of our raw
materials or any proposed capital expenditure in such foreign currencies. The opposite
effects may apply with respect
to our foreign sales.
Results of Operations
The following table sets forth select financial data from our restated consolidated
statement of profit and loss for the Fiscals
indicated, the components of which are also expressed as a percentage of total income for
such Fiscals:
Particulars |
Fiscal |
|||||
2026 |
2025 |
2024 |
||||
f in millions |
% of total income |
f in millions |
% of total |
f in millions |
% of total |
|
Income |
||||||
Revenue from operations |
45,249.55 | 99.15% | 34,448.63 | 99.21% | 27,977.26 | 99.94% |
Other income |
387.45 | 0.85% | 273.73 | 0.79% | 15.89 | 0.06% |
Total income |
45,637.00 | 100.00% | 34,722.36 | 100% | 27,993.15 | 100% |
Expenses |
||||||
Cost of materials consumed |
30,689.82 | 67.25% | 22,567.38 | 64.99% | 18,289.17 | 65.33% |
Changes in inventories of finished goods |
(760.12) | (1.67%) | (233.24) | (0.67)% | (243.61) | (0.87)% |
Employee benefits expenses |
3,734.02 | 8.18% | 2,952.98 | 8.50% | 2521.54 | 9.01% |
Particulars |
Fiscal |
|||||
2026 |
2025 |
2024 |
||||
f in millions |
% of total |
f in millions |
% of total income |
f in millions |
% of total income |
|
Finance costs |
912.44 | 2.00% | 674.65 | 1.94% | 494.71 | 1.77% |
Depreciation & amortization expenses |
1,225.44 | 2.69% | 932.77 | 2.69% | 763.85 | 2.73% |
Impairment loss on financial assets |
24.81 | 0.05% | 60.57 | 0.17% | 1.03 | 0.00% |
Other expenses |
4,451.13 | 9.75% | 3,191.31 | 9.19% | 2,285.15 | 8.16% |
Total expenses |
40,277.54 | 88.26% | 30,146.42 | 86.82% | 24,111.84 | 86.13% |
Restated Profit before tax & |
5,359.46 | 11.74% | 4,575.94 | 13.18% | 3,882.26 | 13.87% |
Exceptional items |
(202.59) | (0.44%) | - | - | - | - |
Restated profit before tax |
5,156.87 | 11.30% | 4,575.94 | 13.18% | 3,882.26 | 13.87% |
Tax expense |
||||||
(a) Current tax |
1,303.89 | 2.86% | 1,124.49 | 3.24% | 951.39 | 3.40% |
(b) Adjustments (credits) related to |
(14.47) | (0.03%) | (5.66) | (0.02)% | 3.99 | 0.01% |
(c) Deferred tax (credit)/charges |
(100.97) | (0.22%) | (81.76) | (0.24)% | (60.60) | (0.22)% |
Restated profit for the year |
3,968.42 | 8.70% | 3,538.87 | 10.19% | 2,987.48 | 10.67% |
Fiscal 2026 compared to Fiscal 2025
Income
Total income
Our total income increased by 31.43% to Rs.45,637.00 million in Fiscal 2026 from Rs.34,722.36 million in Fiscal 2025.
Revenue from operations
Our revenue from operations increased by 31.35%, or Rs.10,800.92 million, to
Rs.45,249.55 million in Fiscal 2026 from Rs.34,448.63
million in Fiscal 2025, primarily due to growth in revenue of wiring harness, controllers
& sensors, switches, and EV products.
Other income
Our other income increased by 41.54%, or Rs.113.72 million, to Rs.387.45 million in
Fiscal 2026 from Rs.273.73 million in Fiscal
2025, primarily due to unwinding of discount on call amount of share receivable of ^171.95
and receipt of government grant to
the company of Rs. 9.38 million and to its subsidiary of Rs. 106.70 million.
Expenses
Total expenses
Our total expenses increased by 33.61%, or ^10,131.12 million, to Rs.40,277.54 million
in Fiscal 2026 from Rs.30,146.42 million
in Fiscal 2025.
Cost of materials consumed
Our cost of materials consumed increased by 35.99%, or Rs.8,122.44 million, to
Rs.30,689.82 million in Fiscal 2026 from
Rs.22,567.38 million in Fiscal 2025, primarily due to an increase in consumption of
materials and parts used for operations, in
line with the increase in sales of products in Fiscal 2026.
Changes in inventories of finished goods and work-in-progress
Our changes in inventories of finished goods and work-in-progress decreased by 225.90%,
or (Rs.526.88) million, to (Rs.760.12)
million in Fiscal 2026 from (Rs.233.24) million in Fiscal 2025.
On a combined basis, cost of materials consumed and changes in inventories of finished
goods and work-in-progress increased
by 34.01% or Rs.7,595.56 million in Fiscal 2026 from Rs.22,334.14 million in Fiscal 2025,
representing 66.14% of revenue from
operations in Fiscal 2026 compared to 64.83% of revenue from operations in Fiscal 2026.
This increase was led by increase in
revenue from operations.
Employee benefits expense
Our employee benefits expense increased by 26.45%, or Rs.781.04 million, to Rs.3,734.02
million in Fiscal 2026 from Rs.2,952.98
million in Fiscal 2025, primarily due to an increase in salaries, wages and bonus and
increased demand for labour and other
employees such as supervisors to support increased sales.
Finance costs
Our finance costs increased by 35.25%, or Rs.237.79 million, to Rs.912.44 million in
Fiscal 2026 from Rs.674.65 million in Fiscal
2025, primarily due to increase in the total borrowings to Rs.8,413.92 million in Fiscal
2026 from Rs.7,760.56 million in Fiscal
2025.
Depreciation and amortization expense
Our depreciation and amortization expense increased by 31.38%, or Rs.292.67 million, to
Rs.1,225.44 million in Fiscal 2026 from
Rs.932.77 million in Fiscal 2025, primarily due to additions to property, plant and
equipment of Rs.5,537.88 million during the
year. Purchase of Property, plant and equipment was primarily for adding new facilities to
meet the increased demand and better
service our customers.
Impairment loss on financial assets
Our impairment loss on financial assets decreased to Rs.24.81 million in Fiscal 2026
from Rs.60.57 million in Fiscal 2025 primarily
due to decrease in the provision for expected credit loss as compared to last year on
trade receivables.
Other expenses
Our other expenses increased by 39.48%, or Rs.1,259.82 million, to Rs.4,451.13 million
in Fiscal 2026 from Rs.3,191.31 million in
Fiscal 2025, mainly on account of increases in subcontracting expenses by 53.92% (from
Rs.1,089.54 million in Fiscal 2025 to
Rs.1,676.98 million in Fiscal 2026), freight expenses by 56.08% (from Rs.295.59 million in
Fiscal 2025 to Rs.461.36 million in Fiscal
2026), professional fees by 9.54% (from Rs.235.98 million in Fiscal 2025 to Rs.258.50
million in Fiscal 2026), repairs and
maintenance by 49.03% (from Rs.314.60 million in Fiscal 2025 to Rs.468.84 million in
Fiscal 2026), power, water and fuel by
33.90% (from Rs.248.21 million in Fiscal 2025 to Rs.332.35 million in Fiscal 2026) and
rates and taxes decreased by 62.63% from
Rs.168.40 million in Fiscal 2025 to Rs.62.93 million in Fiscal 2026 (due to stamp duty in
connection with organizational
restructuring was incurred in Fiscal 2025). These increases were driven primarily by the
increase in revenue and scale of
operations.
Total tax expense
Tax expense increased by 14.60%, or Rs.151.38 million, to Rs.1,188.45 million in Fiscal
2026 from Rs.1,037.07 million in Fiscal
2025, primarily due to an increase in current tax expense resulting from an increase in
profits.
Restated profit for the year
Our restated profit for the year increased by 12.14% to Rs.3,968.42 million in Fiscal
2026 from Rs.3,538.87 million in Fiscal 2025,
as a result of the foregoing factors.
Fiscal 2025 compared to Fiscal 2024
Income
Total income
Our total income increased by 24.04% to Rs.34,722.36 million in Fiscal 2025 from Rs.27,993.15 million in Fiscal 2024.
Revenue from operations
Our revenue from operations increased by 23.13%, or Rs.6,471.37 million, to
Rs.34,448.63 million in Fiscal 2025 from Rs.27,977.26
million in Fiscal 2024, primarily due to growth in revenue from sales of products for EVs.
This growth was supported by the
ramp up of the battery pack business, increased sales to key OEM clients and increased
revenue from sensors and electronics.
Other income
Our other income increased by 1,622.66%, or Rs.257.84 million, to Rs.273.73 million in
Fiscal 2025 from Rs.15.89 million in Fiscal
2024, primarily due to gain on sale of an investment in a subsidiary of Rs.213.35 million
arising from the sale of our erstwhile
subsidiary, Mangalam Capital Private Limited to Rahul Dhoot (our individual Promoter) and
Anupama Dhoot (a member of
our Promoter group) in Fiscal 2025.
Expenses
Total expenses
Our total expenses increased by 25.03%, or Rs.6,034.58 million, to Rs.30,146.42 million
in Fiscal 2025 from Rs.24,111.84 million in
Fiscal 2024.
Cost of materials consumed
Our cost of materials consumed increased by 23.39%, or Rs.4,278.21 million, to
Rs.22,567.38 million in Fiscal 2025 from
Rs.18,289.17 million in Fiscal 2024, primarily due to an increase in consumption of
materials and parts used for operations, in
line with the increase in sales of products in Fiscal 2025.
Changes in inventories of finished goods and work-in-progress
Our changes in inventories of finished goods and work-in-progress decreased by 4.26%,
or Rs.10.37 million, to (Rs.233.24) million
in Fiscal 2025 from Rs.243.61 million in Fiscal 2024.
On a combined basis, cost of materials consumed and changes in inventories of finished
goods and work-in-progress increased
by 23.77% to Rs.22,334.14 million in Fiscal 2025 from Rs.18,045.56 million in Fiscal 2024,
representing 64.83% of revenue from
operations in Fiscal 2025 compared to 64.50% of revenue from operations in Fiscal 2024.
This decrease was led by enhanced
revenue from non-wiring harness products.
Employee benefits expense
Our employee benefits expense increased by 17.11%, or Rs.431.44 million, to Rs.2,952.98
million in Fiscal 2025 from Rs.2,521.54
million in Fiscal 2024, primarily due to an increase in salaries, wages and bonus and
increased demand for labor and other
employees such as supervisors to support increased sales.
Finance costs
Our finance costs increased by 36.37%, or Rs.179.94 million, to Rs.674.65 million in
Fiscal 2025 from Rs.494.71 million in Fiscal
2024, primarily due to an increase in Total Borrowings to Rs.7,760.56 million in Fiscal
2025 from Rs.5,548.97 million in Fiscal
2024.
Depreciation and amortization expense
Our depreciation and amortization expense increased by 22.11%, or Rs.168.92 million, to
Rs.932.77 million in Fiscal 2025 from
Rs.763.85 million in Fiscal 2024, primarily due to additions to property, plant and
equipment of Rs.2,898.01 million during the
year. Purchase of Property, plant and equipment was primarily for adding new facilities to
meet the increased demand and better
service our customers.
Impairment loss on financial assets
Our impairment loss on financial assets increased to Rs.60.57 million in Fiscal 2025
from Rs.1.03 million in Fiscal 2024 primarily
due to provision for expected credit loss on trade receivables.
Other expenses
Our other expenses increased by 39.65%, or Rs.906.16 million, to Rs.3,191.31 million in
Fiscal 2025 from Rs.2,285.15 million in
Fiscal 2024, mainly on account of increases in subcontracting expenses by 28.64% (from
Rs.846.99 million in Fiscal 2024 to
Rs.1,089.54 million in Fiscal 2025), freight expenses by 39.65% (from Rs.211.66 million in
Fiscal 2024 to Rs.295.59 million in Fiscal
2025), professional fees by 78.03% (from Rs.132.55 million in Fiscal 2024 to Rs.235.98
million in Fiscal 2025), repairs and
maintenance by 55.07% (from Rs.202.88 million in Fiscal 2024 to Rs.314.60 million in
Fiscal 2025), power, water and fuel by
31.20% (from Rs.189.19 million in Fiscal 2024 to Rs.248.21 million in Fiscal 2025) and
rates and taxes from Rs.22.83 million in
Fiscal 2024 to Rs.168.40 million in Fiscal 2025 (due to stamp duty in connection with
organizational restructuring). These
increases were driven primarily by the increase in revenue and scale of operations.
Total tax expense
Tax expense increased by 15.90%, or Rs.142.29 million, to Rs.1,037.07 million in Fiscal
2025 from Rs.894.78 million in Fiscal 2024,
primarily due to an increase in current tax expense resulting from an increase in profits.
Restated profit for the year
Our restated profit for the year increased by 18.46% to Rs.3,538.87 million in Fiscal
2025 from Rs.2,987.48 million in Fiscal 2024,
as a result of the foregoing factors.
Non-GAAP Financial Measures
In addition to our results determined in accordance with Ind AS, we believe the
following Non-GAAP measures are useful to
investors in evaluating our operating performance. We use the following Non-GAAP financial
information to evaluate our
ongoing operations and for internal planning and forecasting purposes. We believe that
Non-GAAP financial information, when
taken collectively with financial measures prepared in accordance with Ind AS, may be
helpful to investors because it provides
an additional tool for investors to use in evaluating our ongoing operating results and
trends and in comparing our financial
results with other companies in our industry because it provides consistency and
comparability with past financial performance.
However, our management does not consider these Non-GAAP measures in isolation or as an
alternative to financial measures
determined in accordance with Ind AS.
Non-GAAP financial information is presented for supplemental informational purposes
only, has limitations as an analytical
tool and should not be considered in isolation or as a substitute for financial
information presented in accordance with Ind AS.
Non-GAAP financial information may be different from similarly titled Non-GAAP measures
used by other companies. The
principal limitation of these Non-GAAP financial measures is that they exclude significant
expenses and income that are
required by Ind AS to be recorded in our financial statements, as further detailed below.
In addition, they are subject to inherent
limitations as they reflect the exercise of judgement by management about which expenses
and income are excluded or included
in determining these Non-GAAP financial measures.
For a reconciliation of the following Non-GAAP measures to the nearest Ind AS financial
measures, see "Other Financial
Information" beginning on page 457.
Particulars |
Fiscals |
||
| 2026 | 2025 | 2024 | |
Revenue from operations (Rs. million)1 |
45,249.55 | 34,448.63 | 27,977.26 |
Revenue Growth (%)(2) |
31.35% | 23.13% | 31.60% |
EBITDA (Rs. million)1 |
7,109.89 | 5,909.63 | 5,123.98 |
EBITDA margin (%)(4) |
15.71% | 17.15% | 18.31% |
Adjusted EBITDA (Rs. million) (5) |
7,109.89 | 6,024.13 | 5,123.98 |
Adjusted EBITDA Margin (%)(6) |
15.71% | 17.49% | 18.31% |
PAT (Rs. million)1 |
3,968.42 | 3,538.87 | 2,987.48 |
PAT margin (%)(8) |
8.70% | 10.19% | 10.67% |
Return on capital employed (RoCE) (%)(9) |
19.14% | 29.66% | 33.56% |
Return on equity (ROE) (%)(10) |
16.30% | 35.60% | 39.88% |
Return on net assets (RONA) (%)(11) |
30.37% | 37.43% | 41.05% |
Revenue from operations by geography1--1 |
|||
-Within India (Rs. million) |
40,965.43 | 31,051.97 | 24,388.25 |
-Outside India (Rs. million) |
4,284.12 | 3,396.66 | 3,589.01 |
EV Revenue as a % of total revenue from operations1 |
24.17% | 25.22% | 16.19% |
Revenue from operations by user segment1 |
|||
-2W |
29,626.97 | 23,049.09 | 18,052.79 |
-3W |
5,817.77 | 4,305.00 | 3,275.70 |
-Others |
9,804.81 | 7,094.55 | 6,648.78 |
Net debt to EBITDA15 |
(0.25) | 1.29 | 0.99 |
Capacity utilisation %(16) |
74.26% | 64.22% | 65.23% |
Count of manufacturing plants1 |
22 | 22 | 20 |
Notes:
(1) Revenue from operations comprises the revenue from contracts with customers and other operating revenue such as sale of scrap
(2) Revenue Growth (%) is calculated as a percentage of revenue from operations of the
relevant year minus revenue from operations of the preceding year,
divided by revenue from operations of the preceding year
(3) EBITDA refers to earnings before interest, taxes, depreciation and amortization,
exceptional items and is calculated as restated profit before tax,
exceptional items and share ofprofit of investments accounted for using equity method plus
depreciation and amortization expense plus finance cost less
other income
(4) EBITDA margin (%) is calculated as the percentage of EBITDA divided by revenue from operations
(5) Adjusted EBITDA refers to EBITDA plus stamp duty on account of organizational
restructuring (part of other expenses in FY25 amounting to ^ 114.50
million)
(6) Adjusted EBITDA margin (%) is calculated as the percentage of Adjusted EBITDA divided by revenue from operations
(7) Profit after tax for the year ("PAT") as appearing in the Restated Consolidated Financial Information
(8) PAT Margin (%) is calculated as profit after tax for the year as a % of total income
(9) Return on capital employed ("RoCE") is calculated as earnings
before interest and taxes (EBIT) divided by capital employed. EBIT is calculated as
restated profit before tax and exceptional items plus finance cost. Capital Employed is
computed as total equity plus sum of borrowings shown under non-
current liabilities and borrowings shown under current liabilities.
If we exclude cash received from BC Asia Tranche 2 Issuance in March 2026 of ^10,225.61
million which was yet to be deployed as on March 31, 2026
from capital employed then the return on capital employed comes to 27.83%.
(10) Return on equity ("RoE") is calculated as restated profit for the year
divided by total equity for the year as at the end of year. If we exclude cash received
of ^ 10,225.61million from Tranche 2 infusion in March 2026 which was yet to be deployed
as on March 31, 2026 then the return on equity comes to
28.10%.
(11) Return on net assets ("RONA ") is calculated as earnings before
interest and taxes (EBIT) divided by sum of property, plant & equipment, and
inventory,
trade receivables less trade payables
(12) Comprises revenue from contracts with customers for the sale of products,
supplemented by service income and other operating income from the sale of
scrap, both in India and international markets
(13) EV Revenue as a % of total revenue from operations is calculated as revenue from
sale of products for EV vehicles divided by the total revenue from
operations
(14) Revenue from operations by user segment for 2W comprises of revenue from contracts
with customers for product supplied and used by the OEMs in
producing two wheeler vehicles, for 3W it comprises of revenue from contracts with
customers for product supplied and used by the OEMs in producing
three wheeler vehicles and others primarily comprises revenue from commercial vehicles,
farm equipment and off highway vehicles
(15) Net debt to EBITDA is calculated as Net debt divided by EBITDA. Net debt is total
debt less cash & cash equivalent & other bank balances. Total debt is
calculated as sum of borrowings and lease liabilities shown under non-current liabilities
and borrowings and lease liabilities shown under current
liabilities
(16) This metric calculates capacity utilisation based on combined capacity of the
wiring harnesses and other products as against actual production measured
on similar basis. For wiring harness, the calculated capacities and utilisation levels are
based on a generalized circuit count of standard wiring harness
unit and is used as a standard reference for estimation/utilisation. For other products,
the data reflects the aggregated capacity/output of the individual
products in that category
(17) Count of manufacturing facilities. This excludes offices, warehouses and engineering and design centres
Liquidity and Capital Resources
Historically, our primary liquidity requirements have been to finance our working
capital needs for our operations and capital
expenditure for building and expanding our manufacturing capacities. We have met these
requirements through cash flows from
operations, equity infusions from shareholders and borrowings. As of March 31, 2026, we
had Rs.10,842.82 million in cash and
cash equivalents and ^ 115.66 million of bank balances other than cash and cash
equivalents. As of March 31, 2026, we had
Rs.5,951.07 million in current borrowings which primarily include term loans from banks
and financial institutions.
We believe our existing cash, cash equivalents, additional funding from BC Asia XV and
proceeds from the Fresh Issue, along
with the available current other borrowings, will be sufficient to meet our working
capital and capital expenditures needs for at
least the next 12 months and beyond.
Our future capital requirements will depend on many factors, including, but not limited
to our growth, our ability to attract and
retain customers, the continuing market acceptance of our offerings, the timing and extent
of spending to support our efforts to
develop our manufacturing facilities and new products. Further, we may in the future enter
into arrangements to strategically
pursue inorganic growth opportunities to support our operations. We may finance our
capital requirements through equity, debt,
or a combination thereof. See "Risk Factors-Our business is capital intensive and
we incur substantial capital expenditure and
working capital requirements and may require additional financing to meet those
requirements, which could have an adverse
effect on our business, results of operations, cash flows and financial condition."
on page 27.
Cash Flows
The table below summarizes the statement of cash flows, as per our restated
consolidated statement of cash flows for the Fiscals
indicated:
Particulars |
Fiscal |
||
| 2026 | 2025 | 2024 | |
Rs. in million |
|||
Net cash flow /(used in) from operating activities |
3,476.57 | 3,202.14 | 2,410.86 |
Net cash flow/(used in) from investing activities |
(12,616.93) | (4,428.40) | (3,108.58) |
Net cash flow/(used in) from financing activities |
19,123.33 | 1,379.77 | 634.25 |
Cash and cash equivalents at the end of the year |
10,842.82 | 464.47 | 304.02 |
Operating Activities
Our net cash flow from operating activities for Fiscal 2026, was Rs.3,476.57 million,
while our operating cash flow before
working capital changes was Rs.7,078.82 million. Working capital changes primarily
consisted of increases in inventories of
Rs.2,052.39 million and trade receivables of Rs.1,847.25 million, which were partially
offset by an increase in trade payables of
Rs.1,669.34 million. Income taxes paid (net of refund) were Rs.1,288.53 million.
Our net cash flow from operating activities for Fiscal 2025 was Rs.3,202.14 million,
while our operating cash flow before working
capital changes was Rs.5,991.50 million. Working capital changes primarily consisted of
increases in trade receivables of
Rs.1,828.28 million and inventories of Rs.884.47 million, which were partially offset by
an increase in trade payables of Rs.1,057.27
million. Income taxes paid (net of refund) were Rs.1,149.09 million.
Our net cash flow from operating activities for Fiscal 2024 was Rs.2,410.86 million,
while our operating cash flow before working
capital changes was Rs. 5,151.89 million. Working capital changes primarily consisted of
increases in trade receivables of
Rs.1,525.84 million and inventories of Rs.689.29 million, which were partially offset by
an increase in trade payables of Rs.377.95
million. Income taxes paid (net of refund) were Rs.889.07 million.
Investing A ctivities
Our net cash flow used in investing activities for Fiscal 2026, was Rs.12,616.93
million, which primarily consisted of payments
on account of business combinations (net of cash acquired) of Rs.9,375.12 million and
payment for property, plant and equipment
and other intangible assets of Rs.3,499.67 million and payment on account of bank deposits
of Rs.220.05 million, which were
partially offset by proceeds from bank deposits of Rs. 189.71 million.
Our net cash flow used in investing activities for Fiscal 2025 was Rs.4,428.40 million,
which primarily consisted of payment for
property, plant and equipment and other intangible assets of Rs.4,068.79 million and
payments on account of business
combinations (net of cash acquired) of ^1,138.86 million, which were partially offset by
proceeds from proceeds from bank
deposits of Rs.709.62 million and proceeds from sale of business (net of cash disposed) in
our erstwhile subsidiary of Rs.315.06
million.
Our net cash flow used in investing activities for Fiscal 2024 was Rs.3,108.58 million,
which primarily consisted of payment for
property, plant and equipment and other intangible assets of Rs.2,878.73 million and
payment on account of bank deposits of
Rs.554.22 million, which were partially offset by proceeds from bank deposits of Rs.539.08
million.
Financing A ctivities
Our net cash flow from financing activities for Fiscal 2026 was ^19,123.33 million,
which primarily included proceeds from
issue of equity shares of Rs.19,596.23 million and proceeds from long term borrowings of
Rs.433.28 million, which were partially
offset by repayments of long-term borrowings of Rs.1,263.39 million and finance costs paid
of Rs.662.95 million.
Our net cash flow from financing activities for Fiscal 2025 was Rs.1,379.77 million,
which primarily included proceeds from
long term borrowings of Rs.2,408.23 million and proceeds of short-term borrowings (net) of
Rs.64.30 million, which were partially
offset by repayments of long-term borrowings of Rs.1,039.85 million and finance costs paid
of Rs.662.05 million.
Our net cash flow from financing activities for Fiscal 2024 was Rs.634.25 million,
which primarily included proceeds from long
term borrowings of Rs.1,871.44 million and proceeds of short-term borrowings (net) of
Rs.967.96 million, which were partially
offset by repayment of long-term borrowings of Rs.1,517.84 million and finance cost paid
of Rs.497.46 million.
Indebtedness
As of March 31, 2026, we had current borrowings of Rs.5,951.07 million and non-current
borrowings of Rs.2,462.85 million.
Current borrowings consisted of secured other borrowings such as cash credit, working
capital demand loans, loans from
financial institutions, letters of credit, bills discounted with banks, and current
maturities of term loans and vehicle loans, along
with unsecured borrowings including working capital loans from banks, loans from financial
institutions, and loans from related
parties. Non-current borrowings consisted of secured term loans from banks, term loans
from financial institutions, and vehicle
loans measured at amortized cost.
Cash Outflow for Capital Expenditures
In Fiscals 2026, 2025 and 2024, our payment for purchase of property, plant and
equipment and intangible assets were Rs.3,499.67
million, Rs.4,068.79 million and Rs.2,878.73 million, respectively. The capital
expenditure is a mix of growth capital expenditure
(to facilitate expansion of capacity, and machinery for new products) and maintenance
capital expenditure. We generally
purchase our manufacturing facilities, and the building is custom-built to meet our
specifications, and we invest in utilities and
plant machinery. For additional information on our properties, see "Our Business-Property"
on page 299.
Contractual Obligations
The table below sets forth our contractual obligations with definitive payment terms as
of March 31, 2026. These obligations
primarily relate to our borrowings, lease liabilities, trade payables and other financial
liabilities.
(f in million)
Particulars |
On demand | Within 1 year | 1-3 years | More than 3 years |
Total |
Borrowings |
5,080.90 | 1,082.28 | 1,878.07 | 821.16 | 8,862.41 |
Lease liabilities |
- | 241.09 | 379.54 | 368.83 | 989.46 |
Trade payables |
- | 6,022.43 | - | - | 6022.43 |
Other financial liabilities |
- | 858.81 | - | - | 858.81 |
Total |
5,080.90 | 8,204.61 | 2,257.61 | 1,190.00 | 16,733.11 |
Contingent Liabilities
The following table sets forth the principal components of our contingent liabilities
as of March 31, 2026. These liabilities relate
to tax demands and legal claims.
(f in million)
Particulars |
As of March 31, 2026 |
Value Added Tax Act / Sales Tax matters under dispute |
4.35 |
Income tax matters under dispute |
87.81 |
Goods & Services Tax Act |
27.94 |
Claims in respect of various cases such as Motor Accident Claims Tribunal |
- |
Advisory and consultancy services fees |
480.41 |
Total |
600.51 |
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, derivative instruments or
relationships with other entities that would have
been established for the purpose of facilitating off-balance sheet arrangements.
Related Party Transactions
We enter into various transactions with related parties. For further information see
"Other Financial Information - Related
Party Transactions" on page 459.
Seasonality
Our operations are not impacted by seasonality.
Quantitative and Qualitative Disclosures about Market Risks
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial
loss to other party by failing to discharge an
obligation. Credit risk arises principally from our trade receivables, security deposits,
loans to employees and balances with
banks.
In case of credit or default risk associated with trade receivables, we follow a
defined credit policy under which each new
customer is analyzed individually for creditworthiness before payment and delivery terms
and conditions are offered. Credit
ratings are reviewed regularly, and limits are set and monitored on an ongoing basis.
Trade receivables are valued at the original invoiced amount less any necessary value
adjustments for default risks. We follow
provision matrix to measure the lifetime expected credit losses as per the practical
expedient prescribed under Ind AS 109. The
trade receivables and contract assets for other businesses are mainly related to contracts
for sale of goods and time and material
contracts. An impairment analysis is performed at each reporting date on an individual
basis for major customers. In addition,
a large number of smaller receivable balance are grouped into homogenous groups and
assessed for impairment collectively
using a provision matrix. The assessment is based on historical information of defaults.
The maximum exposure to credit risk
at the reporting date is the carrying value of each class of financial assets.
We keep funds with only limited and reputed banks with very high credit worthiness.
Loans given to employees is subject to
low credit risk and the risk of default is negligible or nil. As for security deposits,
management has assessed and created minimal
provision where required. There was no subsequent loss identified by management for cash
& cash equivalent.
Liquidity risk
Liquidity risk is the risk that we may encounter difficulty in meeting our present and
future obligations associated with financial
liabilities that are required to be settled by delivering cash or another financial asset.
Our objective is to, at all times, maintain
optimum levels of liquidity to meet its cash and collateral obligations. We require funds
both for short term operational needs
as well as for long term investment programs. We monitor our liquidity position and deploy
a robust cash management system
along with regular cash forecast review. It aims to minimize these risks by generating
sufficient cash flows from its current
operations, which in addition to the available cash and cash equivalents and sufficient
committed fund facilities which will
provide liquidity.
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial
instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: currency risk, interest rate
risk and other price risk such as equity price
risk and commodity price risk. Financial instruments affected by market risk include loans
and borrowings, foreign currency
receivables, foreign currency payables, deposits and investments.
Foreign currency risk
We operate internationally, and the business is transacted in several currencies.
Consequently, we are exposed to foreign
exchange risk that arise on account of the various assets and liabilities which are
denominated in currencies other than Indian
Rupee. Consequently, the results of our operations are affected positively/adversely as
the rupee appreciates /depreciates against
these currencies.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of the
financial instruments will fluctuate because of changes
in market interest rates. We are mainly exposed to this risk due to borrowings having
floating rate of interest.
Price risk
Our investment in non-listed equity securities are susceptible to market price risk
arising from uncertainties about future values
of the investment securities. We manage the equity price risk through placing limits on
individual and total equity instruments.
Hence, equity price risk is considered to be low. Further, our operating activities
require the ongoing purchase of various
commodities for manufacture of automotive parts. However, the movement in commodity prices
are substantially adjusted
through price differences as per customer contracts and hence commodity price risk for us
is also considered to be low.
Significant Economic Changes
Other than as described elsewhere in this Red Herring Prospectus, there are no other
significant economic changes that
materially affect or are likely to affect income from continuing operations.
Unusual or Infrequent Events of Transactions
Except as described in this Red Herring Prospectus, there have been no other events or
transactions that may be described as
"unusual" or "infrequent".
Known Trends or Uncertainties
Our business has been affected, and we expect will continue to be affected by the
trends identified above in the heading titled
" -Principal Factors Affecting our Financial Condition and Results of
Operations" and the uncertainties described in the
section titled "Risk Factors" beginning on page 24. Except as
described or anticipated in this Red Herring Prospectus, there are
no known factors which we expect will have a material adverse impact on our revenues or
income from continuing operations.
Future Relationship Between Cost and Income
Other than as described elsewhere in this Red Herring Prospectus, there are no known
factors that might affect the future
relationship between costs and revenues.
Reservations, qualifications, matters of emphasis or adverse remarks
There are no reservations, qualifications, matters of emphasis or adverse remarks for
the Fiscals included in the examination
reports.
Significant Developments after March 31, 2026 that may affect our future results of operations
Except as stated in this Red Herring Prospectus, no circumstances have arisen since the
date of the Restated Consolidated
Financial Information as disclosed in this Red Herring Prospectus which materially and
adversely affect or are likely to affect
our operations or profitability, or the value of our assets or our ability to pay our
material liabilities within the next twelve
months.
New Products or Business Segments
Except as disclosed in "Our Business" beginning on page 271,
and products that we announce in the ordinary course of business,
we have not announced and do not expect to announce in the near future any new products or
business segments.
Supplier or Customer Concentration
We depend on a limited number of suppliers to procure our raw materials and certain
components. For further details, see "Risk
Factors-We depend on a limited number of suppliers to procure our raw materials and
components. In Fiscals 2026, 2025 and
2024, our purchases of raw materials from our top ten suppliers for the respective Fiscals
contributed to 43.66%, 44.95% and
44.13% of our raw material purchases in Fiscals 2026, 2025 and 2024, respectively. "
on page 36.
We are dependent on our top ten customers. For further details, see "Risk
Factors- We are dependent on our top five and top
ten customers. Our top ten customers (based on contribution to revenue from operations in
Fiscal 2026) contributed 80.93%,
81.81% and 77.90% of our revenue from operations in Fiscals 2026, 2025 and 2024,
respectively. Any failure to maintain our
relationship with these customers will have an adverse effect on our business, results of
operations, cash flows and financial
condition." on page 25.
Competitive Conditions
We operate in a competitive environment. For information on our competitive conditions and our competitors, see "Industry
Overview", "Risk Factors-We face competition from both domestic and
multinational corporations and there is no assurance
that we will be able to successfully compete in the markets we currently operate in or
those that we plan to expand into. Our
inability to compete effectively could result in the loss of customers and our market
share, which could have an adverse effect
on our business, results of operations, cash flows and financial condition. "
and "Industry Overview - Increasing Competition"
on pages 180, 34, and 269, respectively.
Material Accounting Policies
The following is a summary of significant accounting policies that have been used in
the preparation of the Restated
Consolidated Financial Information:
(a) Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of the goods or
services are transferred to the
customer at an amount that reflects the consideration to which the Group expects to be
entitled in exchange for those
goods or services. The Group has concluded that it is the principal in its revenue
arrangements, because it typically
controls the goods or services before transferring them to the customer.
Revenue from sale of goods
Revenue from sale of goods is recognised at the point in time when control of the asset
is transferred to the customer,
generally on delivery of the goods. The Group considers whether there are other promises
in the contract that are
separate performance obligations to which a portion of the transaction price needs to be
allocated. In determining the
transaction price for the sale of goods, the Group considers the effects of variable
consideration, the existence of
significant financing components (Since the sales are made with a credit term ranging from
30 days to 60 days, there
is no significant element of financing), non-cash consideration, and consideration payable
to the customer (if any). A
receivable is recognised when the goods are delivered since this is the point in time when
the consideration is
unconditional because only the passage of time is required before the payment is due.
Rights of return
The Group uses the expected value method to estimate the variable consideration given
the large number of contracts
that have similar characteristics. The requirements in Ind AS 115 on constraining
estimates of variable consideration
are also applied in order to determine the amount of variable consideration that can be
included in the transaction price.
For goods that are expected to be returned, the Group recognises a refund liability. A
right of return asset (and
corresponding adjustment to cost of sales) is also recognised for the right to recover
goods from a customer.
(b) Foreign currency transactions and translation
Functional and presentation currency
Items included in the financial information of each of the Group entities are measured
using the currency of the primary
economic environment in which the entity operates ( the functional currency ). The
Consolidated financial information
are presented in Indian rupee (INR), which is Holding Companys functional and
presentation currency.
(c) Income Taxes
Current income tax and Deferred tax
The income tax expense or credit for the period is the tax payable on the current
periods taxable income based on the
applicable income tax rate adjusted by changes in deferred tax assets and liabilities
attributable to temporary
differences.
The current income tax charge is calculated on the basis of the tax laws enacted or
substantively enacted at the end of
the reporting period. Management periodically evaluates positions taken in tax returns
with respect to situations in
which applicable tax regulation is subject to interpretation and considers whether it is
probable that a taxation authority
will accept an uncertain tax treatment. It establishes provisions where appropriate on the
basis of amounts expected to
be paid to the tax authorities.
Deferred tax is provided in full, using the liability method, on temporary differences
arising between the tax bases of
assets and liabilities and their carrying amounts at the reporting date.
Deferred tax is recognized for all taxable temporary differences, except:
- When the deferred tax liability arises from the initial recognition of goodwill or an
asset or liability in a
transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting
profit nor taxable profit or loss;
- In respect of taxable temporary differences between the carrying amount and tax bases
of investments in
subsidiaries, branches, associates and interests in joint ventures, when the timing of the
reversal of the
temporary differences can be controlled by the Group, and it is probable that the
temporary differences will
not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences and unused
tax losses only if it is probable
that future taxable amounts will be available to utilize those temporary differences and
losses.
The carrying amount of deferred tax assets is reviewed at each reporting date and
reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of
the deferred tax asset to be utilised.
Deferred income tax is determined using tax rates (and tax laws) that have been enacted
or substantively enacted as at
the reporting date and are expected to apply in the year when the asset is realised, or
the liability is settled.
473
Current and Deferred tax is recognised in profit or loss, except to the extent that it
relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in
other comprehensive income or
directly in equity, respectively.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable
right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to income taxes levied by
same taxation authorities on either
same taxable entity or different taxable entities which intend either to settle the
current tax assets and tax liabilities on
a net basis or to realise the asset and settle the liability simultaneously.
(d) Property, plant and equipment
Freehold land and capital work in progress are carried at historical costs. All other
items of property, plant and
equipment are stated at historical cost, net of accumulated depreciation and accumulated
impairment losses, if any. No
decommissioning liabilities are expected to be incurred on the assets of plant and
equipment.
Depreciation is calculated using the straight-line method to allocate their cost, net
of their residual values, over their
estimated useful lives. The Group, based on technical assessments made by technical
experts and management
estimates, depreciates certain items of tangible assets over estimated useful lives which
are different from the useful
life prescribed in Schedule II to the Companies Act, 2013. The management believes that
these estimated useful lives
are realistic and reflect fair approximation of the period over which the assets are
likely to be used. Table below provide
the details of the useful lives considered by Management with comparison with useful lives
prescribed under Schedule
II of the Companies Act, 2013:
Asset Category |
Useful Life considered# | Useful life (Schedule II) |
Buildings and Site Development |
30 Years | 30 Years |
Plant & Machinery (Other than Jigs & fixtured, |
3-15 Years * | Plant and Machinery for continuous process plant- 25 years |
Plant & Machinery (Jigs & fixtured, moulds and dies) |
5 years* | 15 years |
Furniture and fixtures |
Up to 10 years | Up to 10 years |
Computers |
Up to 6 years | Up to 6 years |
Office equipment |
4-5 Years* | 5 Years |
Vehicles |
4 Years * | 8 Years |
* Considered based on managements estimation, supported by technical advice, of the useful lives of the respective assets.
# Residual value considered as 5% based on managements estimation, supported by technical advice.
The assets residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period.
(e) Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost.
Following initial recognition,
intangible assets are carried at cost less accumulated amortisation and accumulated
impairment losses.
The Group does not have any intangible assets with indefinite useful lives.
All intangible assets are amortised on a straight-line basis over a period of three
years. Research costs are expensed as
incurred.
(f) Leases
As a Lessee:
The Group leases various land parcels. Rental contracts are typically made for fixed
periods of 2 to 99 years but have
extension options. Lease terms are negotiated on an individual basis and contain a wide
range of different terms and
conditions.
The right-of-use asset is depreciated over the shorter of the assets useful life and
the lease term on a straight-line basis.
If the group is reasonably certain to exercise a purchase option, the right-of-use asset
is depreciated over the underlying
assets useful life.
Lease payments to be made under reasonably certain extension options are also included
in the measurement of the
liability. The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily
determined, the lessees incremental borrowing rate is used, being the rate that the
lessee would have to pay to borrow
the funds necessary to obtain an asset of similar value in a similar economic environment
with similar terms, security
and conditions. In case of lease payments made in advance for the total period of lease,
the group does not create any
corresponding liability.
Payments associated with short-term leases and leases of low-value assets are
recognised on a straight- line basis as
an expense in profit or loss. Short-term leases are leases with a lease term of 12 months
or less.
Extension and termination options are included in several property and equipment leases
across the group. These terms
are used to maximise operational flexibility in terms of managing contracts. Most of the
extension and termination
options held are exercisable only by the group and not by the respective lessor.
(g) Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs are assigned to individual items of inventory based on weighted average basis.
Costs of purchased inventory are
determined after deducting rebates and discounts. Net realisable value is the estimated
selling price in the ordinary
course of business less the estimated costs of completion and the estimated costs
necessary to make the sale.
(h) Employee benefit obligations
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected
to be settled wholly
within 12 months after the end of the period in which the employees render the related
service are recognised
in respect of employees services up to the end of the reporting period and are measured
at the amounts
expected to be paid when the liabilities are settled. The liabilities are presented as
current employee benefit
obligations in the balance sheet.
(ii) Other long-term employee benefit obligations
The Group does not have an unconditional right to defer settlement for any of these
obligations for privilege
leave. However, based on past experience, the Group does not expect all employees to avail
the full amount
of accrued leave or require payment for such leave within 12 months. They are therefore
measured as the
present value of expected future payments to be made in respect of services provided by
employees up to the
end of the reporting period using the projected unit credit method. The benefits are
discounted using the
market yields at the end of the reporting period that have terms approximating to the
terms of the related
obligation. Re-measurements because of experience adjustments and changes in actuarial
assumptions are
recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity
does not have an
unconditional right to defer settlement for at least twelve months after the reporting
period, regardless of
when the actual settlement is expected to occur.
(iii) Post-employment obligations
The Group companies incorporated in India operates the following post-employment schemes:
(a) Defined benefit plans in the nature of gratuity, and
(b) Defined contribution plans in the nature of provident fund.
Gratuity obligations
The liability or asset recognised in the balance sheet in respect of defined benefit
gratuity plans is the present
value of the defined benefit obligation at the end of the reporting period less the fair
value of plan assets. The
defined benefit obligation is calculated annually by actuaries using the projected unit
credit method.
Defined contribution plans
The Group companies incorporated in India pays provident fund contributions to publicly
administered
provident funds as per local regulations. The Group has no further payment obligations
once the contributions
have been paid. The contributions are accounted for as defined contribution plans and the
contributions are
recognised as employee benefit expense when they are due. Prepaid contributions are
recognised as an asset
to the extent that a cash refund or a reduction in the future payments is available.
(i) Financial assets
(i) Classification & Recognition:
The Group classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (through profit or loss)
- those measured at amortised cost.
The classification depends on the entitys business model for managing the financial
assets and the contractual
terms of the cash flows. For assets measured at fair value, gains and losses will either
be recorded in profit or
loss or other comprehensive income. For investments in debt instruments, this will depend
on the business
model in which the investment is held. For investments in equity instruments, this will
depend on whether
the group has made an irrevocable election at the time of initial recognition to account
for the equity
investment at fair value through other comprehensive income. The group reclassifies debt
investments when
and only when its business model for managing those assets changes.
Regular way purchases and sales of financial assets are recognised on trade-date, the
date on which the group
commit to purchase or sell the financial asset.
(ii) Measurement:
At initial recognition, the group measures a financial asset at its fair value plus, in
the case of a financial asset
not at fair value through profit or loss, transaction costs that are directly attributable
to the acquisition of the
financial asset. Transaction costs of financial assets carried at fair value through
profit or loss are expensed
in profit or loss.
Debt instruments:
Subsequent measurement of debt instruments depends on the groups business model for
managing the asset
and the cash flow characteristics of the asset. There are three measurement categories
into which the group
classifies its debt instruments:
Amortised cost:
Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments
of principal and interest are measured at amortised cost. A gain or loss on a debt
investment that is
subsequently measured at amortised cost and is not part of a hedging relationship is
recognised in profit or
loss when the asset is derecognised or impaired. Interest income from these financial
assets is included in
statement of profit and loss using the effective interest rate method. Impairment losses
are presented as a
separate line item in the Restated Consolidated Financial Information. Trade receivables
are subject to a
factoring arrangement. However, this does not constitute a significant portion of the
total trade receivables.
These receivables are held to collect contractual cash flows and are therefore
subsequently measured at
amortised cost.
Fair value through other comprehensive income (FVOCI):
Assets that are held for collection of contractual cash flows and for selling the
financial assets, where the
assets cash flows represent solely payments of principal and interest, are measured at
fair value through other
comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI,
except for the
recognition of impairment gains or losses, interest income and foreign exchange gains and
losses which are
recognised in profit and loss. When the financial asset is derecognised, the cumulative
gain or loss previously
recognised in OCI is reclassified from equity to profit or loss and recognised in other
gains/ (losses). Interest
income from these financial assets is included in other income using the effective
interest rate method. Foreign
exchange gains and losses and impairment expenses are presented as separate lines item in
the Restated
Consolidated Financial Information.
Fair value through profit or loss:
Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair
value through profit or
loss. A gain or loss on a debt investment that is subsequently measured at fair value
through profit or loss and
is not part of a hedging relationship is recognised in profit or loss and presented net in
the statement of profit
and loss within other gains/(losses) in the period in which it arises. Interest income
from these financial assets
is included in other income.
(iii) Impairment of financial assets
The Group applies expected credit loss (ECL) model for measurement and recognition of
impairment loss on
the following financial assets and credit risk exposure:
- Financial assets that are debt instruments, and are measured at amortised cost e.g.,
loans, debt
securities, deposits, trade receivables and bank balance;
- Trade receivables or any contractual right to receive cash or another financial asset
that result from
transactions that are within the scope of Ind AS 115.
The Group does not have any purchased or originated credit-impaired (POCI) financial
assets, i.e., financial
assets which are credit impaired on purchase/ origination.
(iv) Derecognition of financial asset
A financial asset is derecognised only when the Group has transferred the rights to
receive cash flows from
the financial asset or retains the contractual rights to receive the cash flows of the
financial asset but assumes
a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the Group evaluates whether it has
transferred substantially all risks
and rewards of ownership of the financial asset. In such cases, the financial asset is
derecognised. Where the
entity has not transferred substantially all risks and rewards of ownership of the
financial asset, the financial
asset is not derecognised.
The Group has receivables which has been factored under a no recourse arrangement. Such
receivables are
de-recognized when the Group receives payments from the financial institution.
(j) Financial liabilities
Trade and other payables are initially measured at fair value, net of transaction
costs, and are subsequently measured
at amortised cost, using the effective interest rate method where the time value of money
is significant.
Interest bearing bank loans and overdrafts are initially measured at fair value and are
subsequently measured at
amortised cost using the effective interest rate method. Any difference between the
proceeds (net of transaction costs)
and the settlement or redemption of borrowings is recognised over the term of the
borrowings in the consolidated
statement of profit and loss.
Borrowing Costs
General and specific borrowing costs directly attributable to the acquisition,
construction or production of a qualifying
asset that necessarily takes a substantial period to get ready for its intended use or
sale are capitalised as part of the
cost of the asset. All other borrowing costs are expensed in the period in which they
occur. Borrowing costs consist of
interest and other costs that the Group incurs in connection with the borrowing of funds.
De-recognition of financial liabilities
The Group de-recognises financial liabilities when, and only when, the Groups
obligations are discharged, cancelled
or they expire.
(k) Offsetting of Financial assets and financial liabilities
Financial assets and financial liabilities are offset, and the net amount is reported
in the balance sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously. The legally enforceable
right must not be contingent on future
events and must be enforceable in the normal course of business and in the event of
default, insolvency or bankruptcy
of the Group or the counter party.
(l) Exceptional items
When the items of income and expense within profit or loss from ordinary activities are
of such size, nature or incidence
that their disclosure is relevant to explain the performance of the Group for the period,
the nature and amount of such
items are disclosed separately as exceptional item by the Group.
(m) Business Combination
Common Control transactions:
Business combinations involving entities that are controlled by the group are accounted
for using the pooling of
interests method as follows:
1. The assets and liabilities of the combining entities are reflected at their carrying amounts.
2. No adjustments are made to reflect fair values or recognise any new assets or
liabilities. Adjustments are only
made to harmonize accounting policies.
3. The balance of the retained earnings appearing in the financial statements of the
transferor is aggregated with
the corresponding balance appearing in the financial statements of the transferee or is
adjusted against general
reserve.
4. The identity of the reserves is preserved and the reserves of the transferor become
the reserves of the
transferee.
5. The difference, if any, between the amounts recorded as share capital issued plus
any additional consideration
in the form of cash or other assets and the amount of share capital of the transferor is
transferred to capital
reserve/ common control deficit adjustment account and is presented separately from other
capital reserves
6. The financial information in the financial statements in respect of prior periods is
restated as if the business
combination had occurred from the beginning of the preceding period in the financial
statements, irrespective
of the actual date of combination. However, where the business combination had occurred
after that date, the
prior period information is restated only from that date.
(n) Share Capital
Equity shares
Equity shares are classified as equity. Consideration received in cash or kind against
issue of shares, in excess of the
face value of shares is recorded as securities premium (net of incremental costs directly
attributable to the issue of
equity shares), a component of other equity.
(o) Government grants
Grants from the Government are recognised at their fair value where there is a
reasonable assurance that the grant will
be received, and the Group will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the profit or loss
over the period necessary to
match them with the costs that they are intended to compensate and presented within other
income.
Government grants relating to the purchase of property, plant and equipment are
recognised in books by by using a net
approach and disclosing an asset or a liability based on the difference between the grant
income recognised and receipts
during the year. The grant income is not offset against the cost of the asset.
(p) Segment Reporting
Operating segments are reported in a manner consistent with internal reporting provided
to the Chief Operating
Decision Maker (CODM). The Board of Directors has been identified as being the CODM. Refer
note 37 for segment
information presented.
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