MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Red Herring Prospectus may include forward-looking statements that involve risks and uncertainties, and our actual financial performance may materially vary from the conditions contemplated in such forward-looking statements as a result of various factors, including those described below and elsewhere in this Red Herring Prospectus. For further information, see "Forward-Looking Statements" on page 19. Also read "Risk Factors" and "- Significant Factors affecting our Results of Operations and financial condition " on pages 21 and 446, respectively, for a discussion of certain factors that may affect our business, financial condition or results of operations.
Unless otherwise indicated or the context otherwise requires, the financial information for Fiscals 2026, 2025 and 2024 included herein is derived from the Restated Consolidated Financial Information, included in this Red Herring Prospectus, which have been derived from our audited financial statements and restated in accordance with the SEBI ICDR Regulations and the Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the ICAI, as amended from time to time, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. For further information, see "Financial Information " on page 347.
Unless otherwise indicated, industry and market data used in this section has been derived from the report titled "Industry assessment - Powertrain Solutions and Alloys & Metallics Components" dated August 2026 (the "CRISIL Report"), exclusively prepared and issued by CRISIL Intelligence, who were appointed by our Company pursuant to an engagement letter dated December 20, 2024, read with engagement letter dated July 16, 2026 and the CRISIL Report has been exclusively commissioned by and paid for by our Company in connection with the Offer. The CRISIL Report is available on the website of our Company at https://www.heromotors.com/investorrelationship until the Bid/Offer Closing Date, and has also been include in "Material Contracts and Documents for Inspection - Material Documents" on page 561. The data included herein includes excerpts from the CRISIL Report and may have been re-ordered by us for the purposes of presentation. There are no parts, data or information (which may be relevant for the proposed Offer), that have been left out or changed in any manner. Unless otherwise indicated, all financial, operational, industry and other related information derived from the CRISIL Report and included herein with respect to any particular year refers to such information for the relevant calendar year. For more information, see "Risk Factors - Certain sections of this Red Herring Prospectus disclose information from the CRISIL Report which is a paid report and commissioned and paid for by us exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks. " on page 53. Also see, "Certain Conventions, Presentation of Financial- Industry and Market Data" on page 16.
OVERVIEW
For information in relation to our business, see "Our Business" on page 253.
PRESENTATION OF FINANCIAL INFORMATION
The restated consolidated financial information of our Company comprise the restated consolidated statement of assets and liabilities as of March 31, 2026, March 31, 2025 and March 31, 2024, the restated consolidated statements of profit and loss (including other comprehensive income), the restated consolidated statement of changes in equity and the restated consolidated statement of cash flows for the years ended March 31, 2026, March 31, 2025 and March 31, 2024, and the material accounting policies and other explanatory information (collectively, the "Restated Consolidated Financial Information")
The Restated Consolidated Financial Information have been compiled from the audited consolidated financial statements of our Company as of and for the years ended March 31, 2026, March 31, 2025 and March 31, 2024, respectively, each prepared in accordance with the Indian Accounting Standards ("Ind AS") as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed in the section titled "Risk Factors" on page 21. The following is a discussion of certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations.
Macro-Economic Conditions and Factors
We derive our revenue from operations from the manufacture and supply of Powertrain and A&M components and solutions to our OEM customers. We cater to OEMs primarily in the two-wheelers, performance automotive, e-bikes, off-road vehicles, electric and hybrid cars and heavy duty vehicles categories and located in the United States, Europe, India and the ASEAN region. While stronger macro-economic conditions tend to result into higher demand for automotive vehicles, weaker macroeconomic conditions tend to result into lower demand for automotive vehicles. Change in demand in the market segments we currently supply or improvement/deterioration in the automotive market or a change in regulations, customs, taxes or other trade barriers or restrictions could affect our operations and financial condition. The level of demand for automotive components depends primarily on the prevailing business conditions in the automotive industry.
According to the CRISIL Report, the global two-wheeler industry witnessed steady growth between 2020 to 2025, with sales volumes increasing from 12.54 million units to 16.89 million units. The industry has also benefited from the increasing adoption of electric two-wheelers, supported by technological advancements, improving battery performance, and government initiatives promoting cleaner mobility solutions. As a result, despite the moderation in growth rates, the global two-wheeler market continued to expand through 2025, supported by strong underlying demand for affordable, efficient, and sustainable transportation options. EV penetration in motorcycles shall globally witness an upward trajectory from 2.0% in 2025 to 10.5% to 12.5% in 2031. (Source: CRISIL Report)
The global bicycle market value is expected to remain relatively stable between US$23.85 billion in 2024 to US$26 billion to US$ 29 billion in 2031, reflecting a CAGR of 1% to 3%. Advancements in battery technology and the growing availability of e-bikes have expanded the appeal of cycling to a broader consumer base, including commuters, older riders, and recreational users seeking greater convenience and riding comfort. The global e-bike market is expected to be the primary growth driver within the bicycle industry from 2024 to 2031, with sales volumes projected to increase from 8.24 million units in 2024 to 12.5 to 14.5 million units by 2031, reflecting a CAGR of 6% to 9%. In Europe, e-bike volumes are expected to increase from 6.17 million units to approximately 8 to 10 million units from 2024 to 2031 at a CAGR of 5% to 8%, supported by rising consumer demand for convenient and assisted mobility solutions, particularly for commuting and longer-distance travel. Electric motors, inverters, battery management systems and power electronics will be important for EVs, and their demand is poised to surge. Additionally, the rise of EVs necessitates the creation of new charging infrastructure components, such as stations, connectors and related hardware. This transition presents a significant challenge, but also a golden opportunity for component manufacturers who can adapt to and innovate new technologies. By catering to the evolving needs of the electric mobility revolution, the industry can ensure a smooth shift towards a cleaner and more sustainable future. (Source: CRISIL Report)
The global passenger vehicle transmission mix underwent a notable shift between 2020 and 2025, reflecting the growing adoption of automated transmission technologies and the gradual decline of traditional manual transmissions. While automatic transmission ("AT") remained the dominant transmission type throughout the period, its share remained within 36% to 41%, indicating a more diversified transmission landscape. The global passenger vehicle powertrain mix is expected to undergo a significant transformation through 2031, driven by accelerating electrification and declining dependence on conventional ICE vehicles. Battery electric vehicles ("BEVs") are expected to emerge as the fastest-growing powertrain segment, registering a CAGR of 18% to 20%, with volumes increasing from 3.36 million units in 2024 to 11.5 to 12.5 million units by 2031. Share of automatic transmission vehicles in domestic PV sales has increased from 22% to 27% in Fiscal 2021 to approximately 35% to 40% in Fiscal 2026. This surge is attributed to worsening traffic conditions, increasing affordability, growing consumer preference for comfort and availability of semi-automatic transmission at affordable price points. (Source: CRISIL Report)
We expect that these economic factors and conditions in our industry, particularly changes in consumer confidence, employment levels, fuel prices, consumer spending on two-wheelers and passenger vehicles, urbanisation, changes in consumer preferences, government policies and interest rates, will continue to be the most important factors affecting our 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.
Relationship with Customers and Partners
We have nurtured enduring relationships with our customers, which includes a wide range of customers, spanning both automotive and non-automotive sectors. In the automotive sector, we collaborate with global two-wheeler OEMs including BMW, Ducati, and Hero MotoCorp; players from motor sport industries such as Formula Motorsport and HWA Engineering; global commercial vehicle and off-road OEMs such as Escorts; and enviolo. Our customers in the non-automotive segment for both electric and non-electric powertrain and transmission systems include global OEMs such as B&S, and various e-powertrain applications for supercar manufacturers.
We collaborate closely with our customers to ensure that all our systems and components are as per their requirements and industry standards. Through our strong focus on R&D, we have built the capabilities to develop technologically advanced powertrain systems and components, which assist our customers to meet the market demands for high power density systems handling higher torque requirements, while meeting stringent durability, performance and NVH specifications. Our commitment to performance, technology, and consistent track record of quality, delivery, and cost has not only expanded our market share but also earned us recognition and awards for quality and customer satisfaction from various OEMs. We are among the among the few companies that addresses requirements of the premium ICE and performance ICE segment that require high-performance transmission systems capable of handling tough torque needs while keeping components lightweight. (Source: CRISIL Report)
The value of the business with key customers has been consistently increasing over the past three years. Our customer portfolio has been strategically diversified to reduce reliance on domestic customers. The table below provides revenue from operations generated from domestic customers as a percentage of revenue from operations for Fiscal 2026, 2025 and 2024:
Particulars |
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2024 |
|||
| Amount (Rs. million) | Percentage of Revenue from operations (%) | Amount (Rs. million) | Percentage of Revenue from operations (%) | Amount (Rs. million) | Percentage of Revenue from operations (%) | |
Revenue from operations from domestic customers |
6,968.24 | 58.64% | 6,434.91 | 59.06% | 6,249.85 | 58.72% |
Our sales to customers also depend largely on the number and type of products and solutions that we supply to them and our ability to increase our overall share of customers purchases. It is difficult for us to predict with certainty when our cust omers will decide to increase or decrease inventory levels or levels of production, which strategic direction they will pursue, when they might launch new models or open new facilities, or whether future inventory levels will be consistent with historical levels. Changes in the outsourcing strategy of our customers or increased competition from other auto-component manufacturers as they develop differentiated and innovative products that compete with our systems and components could have an adverse impact on our business, results of operations, financial condition and cash flows.
Over the years, we have expanded our operations through our partnerships with technology providers and global OEMs. For instance, we partnered with enviolo, which owns patented technology known as CVP or referred to as CVT in the automotive sector to further grow our powertrain business. We are the only player manufacturing and exporting CVT hubs to the global e- bike OEMs from India and are the only manufacturer of integrated electric powertrain products for e-bikes in India. (Source: CRISIS Report) We also entered into a joint venture with Yamaha Motors Japan in 2021 to manufacture electric motors under the ‘HYM brand which commenced operations in 2022.
We acquired a strategic stake in Hewland, a British company specializing in designing and manufacturing gearboxes and transmission systems for motorsport and high-performance vehicles that marked an expansion of our design and validation capabilities. This investment boosted our capabilities, by adding advanced design and prototyping skills to our portfolio. Our investment in Hewland also provided us with a manufacturing base in the United Kingdom for the EV segment and strengthened our partnerships with a broad customer network in the United Kingdom, Europe, and the USA. We began offering design, analysis, and prototyping solutions to our customers, setting us apart from competitors who only offer ‘make-to-print services.
To ensure that we maintain our leadership position and grow our portfolio of products, we will continue to enter into technical collaborations with existing partners as well explore opportunities to collaborate new partners. These new initiatives include entering into a technical assistance, knowhow and intellectual property (IP) license agreement with enviolo to jointly design and develop e-CVPs, integrating enviolos patented CVP technology with our electric motors for e-bikes. We have entered into a non-binding term sheet regarding the conclusion of technology license agreement for manufacturing of DCT technology transmissions and related to this license, an engineering service and a sales and marketing service agreement with one of the largest global automotive parts manufacturing and technology companies with expertise in delivering DCT solutions to OEMs worldwide. Once concluded, the license will be exclusively for India, Bangladesh, Nepal, Sri Lanka, Pakistan, and Thailand, which can be extended to other ASEAN markets and encompasses manufacturing and sales activities within our designated territory.
Our Product Mix
Our financial performance has largely been driven by, and a key factor to our future success will be, our ability to continue to diversify our business through maintaining a diversified mix of our products offered to continue to deliver value for our customers. We are a fully integrated powertrain systems provider offering comprehensive solutions for designing, prototyping, validating, developing, and delivering system-level transmission solutions for both electric as well as non-electric powertrains.
Our revenue from operations are significantly dependent on the performance of our business units. Our operations are organized into: (i) Powertrain Solutions; and (ii) A&M business segments. For further information, see "Our Business - Business Operations - Systems and Components" on page 271. The table below sets forth the breakdown of our income from sale of goods across the business units, and as a percentage of our revenue from operations for the last three years:
Segment |
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2024 |
|||
| Revenue from Operations (Rs. million) | Percentage of Revenue from Operations (%) | Revenue from Operations (Rs. million) | Percentage of Revenue from Operations (%) | Revenue from Operations (Rs. million) | Percentage of Revenue from Operations (%) | |
Powertrain Solutions |
6,377.53 | 53.67% | 5,342.47 | 49.03% | 5,202.31 | 48.88% |
A&M |
5,505.98 | 46.33% | 5,553.46 | 50.97% | 5,441.55 | 51.12% |
Total |
11,883.51 | 100.00% | 10,895.93 | 100.00% | 10,643.86 | 100.00% |
Going forward we will continue to offer new capabilities, products and target new geographies to grow our revenue from operations from Powertrain solutions and A&M. Our future results of operations are therefore, dependent upon, among other factors, our ability to continue to produce our systems and components more efficiently by using our extensive in-house technology and research and development and to continue to innovate and invest in product development to drive sales of additional and/or improved products to existing and/or new customers.
Innovation and Research and Development
Over the years, we have expanded our capabilities to include design, engineering, and manufacturing by establishing technology centers in the UK and India, equipped with advanced software, R&D equipment, and test systems. These centers, led by experienced global R&D personnel, create high-power density, lightweight, durable, and efficient mechanical and electrical components. Our comprehensive suite of design software includes Ansys Maxwell, Creo Parametric, SolidWorks, and Kiss Soft. We also operate state-of-the-art Testing & Endurance labs in Ludhiana and Gautam Buddha Nagar, employing advanced machinery for rigorous validation. The G&T technology center in Southam, UK, offers turnkey solutions and comprehensive testing for e-axles, electric drive units, and more. Our technology centers in India and the UK consist of 84 research and development personnel, as of March 31, 2026, overseen by a team with experience in powertrain and micro -mobility solution design and development. Our testing labs enhance our capabilities in design and development through evaluation and validation processes.
We have been able to make significant advancements towards our products and solutions as a result of our R&D initiatives. The table below sets forth our research and development expenses, and as a percentage of our revenue from operations for the last three years:
Particulars |
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2024 |
|||
| Amount (Rs. million) | Percentage of Revenue from operations (%) | Amount (Rs. million) | Percentage of Revenue from operations (%) | Amount (Rs. million) | Percentage of Revenue from operations (%) | |
Research and Development Expense |
895.91 | 7.54% | 772.68 | 7.09% | 793.13 | 7.45% |
We augment our capabilities through strategic partnerships with diverse entities, aimed at advancing our design and development proficiency via training initiatives and collaborative ventures. For instance, we have entered into a joint venture with Yamaha Motors Japan for development of electric motors for two wheelers. Securing several projects as a direct outcome of these collaborations, we have effectively delivered design enhancements and cost optimizations to our customers. Our ability constantly innovate and our results of operations are, therefore, dependent on our ability to enter into and maintain such partnerships.
Raw Material Costs, Operating Costs and Efficiencies
Our business, financial condition, results of operations and prospects are significantly impacted by the prices of raw materials purchased or imported by us as well as any changes in global metal prices. We use a variety of raw materials for the production of our components and systems. For further information, see "Our Business - Business Operations - Raw Materials and Components" on page 284.
Raw material costs (consisting of the costs of materials consumed and changes in inventories of finished and work-in-progress) constitute the most significant portion of our expenditures. The table below sets forth our cost of materials consumed and as a percentage of our total expenses for the last three years:
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2024 |
|||
Cost of Materials Consumed (Rs. million) |
Percentage of Total Expenses (%) | Cost of Materials Consumed (Rs. million) | Percentage of Total Expenses (%) | Cost of Materials Consumed (Rs. million) | Percentage of Total Expenses (%) |
6,535.02 |
56.64% | 6,304.43 | 58.80% | 6,404.49 | 60.47% |
Raw material pricing can be volatile due to a number of factors beyond our control, including global demand and supply, general economic and political conditions, transportation and labour costs, labour unrest, natural disasters, competition, import duties, fuel prices and availability, power tariffs and currency exchange rates. This volatility in commodity prices can significantly affect our raw material costs. Further, volatility in fuel prices can also affect commodity prices worldwide which may significantly increase our raw material costs.
The table below sets forth our cost of raw materials sourced domestically and outside India for the last three years:
Geography |
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2024 |
|||
| Purchases of Raw Materials (Rs. million) | Percentage of Total Purchases of Raw Materials (%) | Purchases of Raw Materials (Rs. million) | Percentage of Total Purchases of Raw Materials (%) | Purchases of Raw Materials (Rs. million) | Percentage of Total Purchases of Raw Materials (%) | |
India |
6,322.82 | 93.92% | 5,870.45 | 94.59% | 5,859.37 | 95.08% |
Outside India |
409.61 | 6.08% | 335.73 | 5.41% | 303.17 | 4.92% |
Total Purchases |
6,732.43 | 100.00% | 6,206.18 | 100.00% | 6,162.54 | 100.00% |
We adopt a procurement strategy that involves sourcing raw materials, commodities, and components from multiple qualified automotive suppliers that meet our requirements based on customer forecasts. While we may not enter into definite-term agreements with all our suppliers who typically supply us through purchase orders, we follow a strategy of de-risking supply chain and at the same time, maintain long term relationships with key suppliers. Our reliance on a select group of suppliers may
also constrain our ability to negotiate our arrangements, which may have an impact on our ability to procure an uninterrupted supply of raw material critical for our operations, which in turn may affect our profit margins and financial performance. We have developed a network of Indian suppliers for key components, all of whom have substantial automotive experience. To maintain consistent quality and prevent any disruptions in the supply chain, we actively support our suppliers by providing training and guidance for improving their manufacturing processes. Through this collaborative approach, we build strong and reliable relationships with our suppliers, while upholding our commitment to continuous improvement. As a result, we can meet the expectations of our customers for the quality and reliability of our products and services.
Historically, as a practice, we have priced our products so as to largely pass the increase in cost of raw materials onto our customers for our operations. Further, our contracts with our customers generally provide for pass through of any variation in the raw material costs. However, our cash flows may still be adversely affected because of any gap in time between the date of procurement of primary raw materials and date on which we can reset the component prices for our customers, to account for the increase in the prices of such raw materials. In addition, we are especially not able to pass all of our raw material price increases to our customers for our operations, as we sell integrated systems rather than individual components. The inability to pass fluctuations in raw material prices on to our customers may materially and adversely affect our profits and profit margins.
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 pressure from our key customers to reduce prices. We continually undertake efforts to reduce our costs in order to protect our margins, such as interchanging capacity, product mix, rationalising suppliers, negotiating volume discounts, outsourcing non-critical processes, reducing energy usage and rationalising our manpower. Our ability to reduce our operating costs in line with customer demand is subject to risks and uncertainties, as our costs depend, in part, on external factors beyond our control. The improvements in operational efficiency is generally a gradual process. 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 capital expenditure, manpower, systems deployment and rejection and re-working of products. Quality control is critical to our operations and a failure to prevent the passing down of defects to our customers may lead to significant costs.
Inorganic Growth Opportunities
We may consider opportunities for inorganic growth, such as through mergers and acquisitions, business transfer or strategic investments, to acquire new customers, enter new markets, strengthen our position in our existing products and current markets, diversify our product portfolio, improve operational efficiency, and enhance our expertise and knowledge. We acquired a strategic stake in Hewland, a British company specializing in designing and manufacturing gearboxes and transmission systems for motorsport and high-performance vehicles that marked an expansion of our design and validation capabilities, in 2022, from Hero International B.V. which had been associated with Hewland since 2017. Subsequently, we acquired a majority stake in Hewland in 2023. Hewlands product range includes manual and sequential gearboxes, differential units, and drivetrain components. Hewland collaborates with OEMs to develop customized transmission systems tailored to specific vehicle needs. This investment boosted our capabilities, by adding advanced design and prototyping skills to our portfolio. Our investment in Hewland also provided us with a manufacturing base in the United Kingdom for the EV segment and strengthened our partnerships with a broad customer network in the United Kingdom, Europe, and the USA.
Acquiring new businesses typically requires substantial effort, additional expenses, and significant management time. For instance, during the pre-acquisition stage, we incur significant costs for identifying opportunities, structuring deals, and conducting due diligence. Post-acquisition, we face integration and operational costs, including coordinating sales and marketing and integrating employees. If we cannot overcome integration challenges and achieve our objectives, the anticipated benefits and synergies may not be fully realized or may take longer than expected. Additionally, acquired businesses may not be profitable. Failure to realize anticipated benefits in a timely manner, or at all, could adversely affect our business and operations.
NON-GAAP MEASURES
Certain measures like Gross Profit, Gross Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Return on Equity, ROCE, Net Debt to Adjusted EBITDA, Fixed Asset Turnover Ratio and Asset Turnover Ratio (together, " Non-GAAP Measures"), presented in this Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP. Further, these Non-GAAP Measures are not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit for the years or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP. In addition, these Non-GAAP Measures are not standardized terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Other companies may calculate these Non-GAAP Measures differently from us, limiting its usefulness as a comparative measure. Although such Non-GAAP Measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance. Also see, "Risk Factors - We have in this Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to our operations and financial performance. These non-GAAP measures and industry
measures may vary from any standard methodology that is applicable across the powertrains industry, alloys and metals and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companieson page 55.
Reconciliation of Non-GAAP measures
Reconciliation of EBITDA, Adjusted EBITDA, EBITDA Margin, and Adjusted EBITDA Margin
The table below provides reconciliation of EBITDA, Adjusted EBITDA, EBITDA Margin and Adjusted EBITDA Margin to our revenue from operations:
(Rs. million, unless otherwise stated) |
|||
Particulars |
As of / For the Year ended March 31, |
||
| 2026 | 2025 | 2024 | |
Restated profit for the year/period (A) |
411.68 | 327.96 | 170.35 |
Total tax expense (B) |
198.36 | 62.80 | 72.77 |
Finance costs (C) |
408.38 | 369.84 | 334.13 |
Depreciation and amortisation expenses (D) |
459.40 | 379.44 | 285.51 |
EBITDA (E=A+B+C+D) |
1,477.82 | 1,140.04 | 862.76 |
EBITDA Margin (H=E/J) |
12.44% | 10.46% | 8.11% |
Exceptional items (F) |
19.59 | - | - |
Share based payment expenses(G) |
105.03 | 148.17 | 394.62 |
Adjusted EBITDA (I = E+F+G) |
1,602.44 | 1,288.21 | 1,257.38 |
Revenue from operations (J) |
11,883.51 | 10,895.93 | 10,643.86 |
Adjusted EBITDA Margin (%) (K=I/J) |
13.48% | 11.82% | 11.81% |
Reconciliation of Gross Profit and Gross Margin
The table below provides reconciliation of Gross Profit and Gross Margin to our revenue from operations:
(Rs. million, unless otherwise stated) |
|||
Particulars |
As of / For the Year ended March 31, |
||
| 2026 | 2025 | 2024 | |
Revenue from operations (A) |
11,883.51 | 10,895.93 | 10,643.86 |
Cost of materials consumed (B) |
6,535.02 | 6,304.43 | 6,404.49 |
Purchases of stock-in-trade (C) |
277.14 | 76.57 | - |
Changes in inventories of finished goods, work in progress, and stock in trade (D) |
116.72 | (6.69) | 45.67 |
Gross Profit (E= A-B-C-D) |
4,954.63 | 4,521.62 | 4,193.70 |
Gross Margin (F=E/A) (%) |
41.69% | 41.50% | 39.40% |
Reconciliation of EBIT and Adjusted EBIT and Adjusted EBIT Margin
The table below provides reconciliation of EBIT, Adjusted EBIT and Adjusted EBIT Margin:
(Rs. million, unless otherwise stated) |
|||
Particulars |
As of / For the Year ended March 31, |
||
| 2026 | 2025 | 2024 | |
Restated profit for the year (A) |
411.68 | 327.96 | 170.35 |
Total tax expense (B) |
198.36 | 62.80 | 72.77 |
Finance costs (C) |
408.38 | 369.84 | 334.13 |
EBIT (D=A+B+C) |
1,018.42 | 760.60 | 577.25 |
Exceptional items (E) |
19.59 | - | - |
Share based payment expenses(F) |
105.03 | 148.17 | 394.62 |
Adjusted EBIT (G=D+E+F) |
1,143.04 | 908.77 | 971.87 |
Revenue from operation (H) |
11,883.51 | 10,895.93 | 10,643.86 |
Adjusted EBIT Margin (I=G/H) |
9.62% | 8.34% | 9.13% |
Reconciliation of Return on Capital Employed
The table below provides reconciliation of return on capital employed:
(Rs. million, unless otherwise stated) |
|||
Computation |
As of / For the Year ended March 31, |
||
| 2026 | 2025 | 2024 | |
Adjusted EBITDA (A) |
1,602.44 | 1,288.21 | 1,257.38 |
Equity share capital (B) |
3,583.36 | 3,573.84 | 3,535.78 |
Other equity (C) |
1,163.20 | 677.06 | 322.61 |
Non-controlling interest (D) |
63.52 | 9.18 | (110.23) |
Computation |
As of / For the Year ended March 31, |
||
| 2026 | 2025 | 2024 | |
Long-term borrowings (E) |
987.69 | 1,233.69 | 817.53 |
Short-term borrowings (F) |
3,020.20 | 2,842.53 | 2,222.45 |
Cash and bank balances |
|||
- Cash and cash equivalents (G) |
223.92 | 94.48 | 422.61 |
- Bank balances other than cash and cash equivalents (H) |
200.00 | 383.10 | 460.00 |
Current Investment (1) (I) |
23.10 | 21.61 | 66.76 |
Total capital employed (J=B+C+D+E+F-G-H-I) |
8,370.96 | 7,837.11 | 5,838.77 |
Average capital employed(2) |
8,104.03 | 6,837.94 | 5,411.99 |
ROCE (Adjusted EBITDA/Average capital employed) |
19.77% | 18.84% | 23.23% |
(1) Liquid funds include investments in mutual funds measured at fair value through profit or loss and investments in debentures measured at fair value through profit or loss.
(2) Average Capital employed: Opening Capital employed plus closing capital employed divided by 2.
Reconciliation of Net Asset, Net asset value and total number of Equity Shares
The table below provides reconciliation of net asset and net asset value per equity share:
(Rs. million, unless otherwise stated) |
|||
Computation of Net asset value per Equity Shares |
As at and for Fiscal 2026 | As at and for Fiscal 2025 | As at and for Fiscal 2024 |
Total assets |
13,718.28 | 11,646.20 | 10,598.55 |
Less: Current liability |
6,445.19 | 5,154.76 | 4,910.02 |
Less: Non-current liability |
2,463.01 | 2,231.36 | 1,940.37 |
Less: Capital reserves (including NCI reserve) |
(87.99) | 16.08 | 16.08 |
Less: Foreign currency translation reserve |
10.07 | (4.70) | (12.13) |
Less: Non-controlling Interest |
63.52 | 9.18 | (110.23) |
Net assets (A) |
4,824.48 | 4,239.52 | 3,854.44 |
Total number of shares (B) |
379,307,960 | 378,356,432 | 374,550,321 |
Net asset value per equity share (Basic A/B) (Rs.) |
12.72 | 11.21 | 10.29 |
Reconciliation of total number of Equity Shares
Particulars |
As at and for Fiscal 2026 | As at and for Fiscal 2025 | As at and for Fiscal 2024 |
Number of equity shares outstanding at the end of the year |
358,336,019 | 357,384,491 | 353,578,380 |
Number of potential equity shares (CCPS) at the end of the year |
20,971,941 | 20,971,941 | 20,971,941 |
Total number of equity shares |
379,307,960 | 378,356,432 | 374,550,321 |
MATERIAL ACCOUNTING POLICIES Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, we elect whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquirees identifiable net assets. Acquisition-related costs are expensed in the periods in which the costs are incurred and the services are received, with the exception of the costs of issuing debt or equity securities that are recognised in accordance with Ind AS 32 and Ind AS 109.
We determine that we have acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.
At the acquisition date, the identifiable assets acquired, and the liabilities assumed are recognised at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below: (i) deferred tax assets or liabilities, and the liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with Ind AS 12 Income Tax and Ind AS 19 Employee Benefits respectively; (ii) potential tax effects of temporary differences and carry forwards of an acquiree that exist at the acquisition date or arise as a result of the acquisition are accounted in accordance with Ind AS 12; (iii) liabilities or equity instruments related to share based payment arrangements of the acquiree or share - based payments arrangements of ours entered into to replace share-based payment arrangements of the acquiree are measured in accordance with Ind AS 102 Share-based Payments at the acquisition date; (iv) assets (or disposal groups) that are classified as held for sale in accordance with Ind AS 105 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard; and (v) reacquired rights are measured at a value determined on the basis of the remaining contractual term of the related contract, and such valuation does not consider potential renewal of the reacquired right.
When we acquire a business, we assess the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss or OCI, as appropriate.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS 109 Financial Instruments, is measured at fair value with changes in fair value recognised in profit or loss in accordance with Ind AS 109. If the contingent consideration is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS and shall be recognised in profit or loss. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and subsequent its settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, we re-assess whether we have correctly identified all of the assets acquired and all of the liabilities assumed and review the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of our cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, we report provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date.
Current versus non-current classification
We present assets and liabilities in the Restated Consolidated Financial information of Assets and Liabilities based on current/non-current classification. An asset is treated as current when: (i) it is expected to be realised or intended to be sold or consumed in normal operating cycle; (ii) it is held primarily for the purpose of trading; (iii) it is expected to be realised within twelve months after the reporting period; or (iv) it is cash or a cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current. A liability is current when: (i) it is expected to be settled in normal operating cycle; (ii) it is held primarily for the purpose of trading; (iii) it is due to be settled within twelve months after the reporting period; or (iv) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non- current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. We have identified twelve months as our operating cycle.
Property, plant and equipment (‘PPE)
Recognition and measurement
Property, plant and equipment is stated at cost of acquisition or construction which includes capitalised finance costs less accumulated depreciation and/or accumulated impairment loss, if any.
Cost of an item of PPE comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use. The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located, if the recognition criteria is met. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Recognition criteria
The cost of an item of property, plant and equipment is recognised as an asset if and only if: (i) it is probable that future economic benefits associated with the item will flow to the entity; and (ii) the cost of the item can be measured reliably.
Capital work-in-progress comprises the cost of property, plant and equipment that are not ready for their intended use at the reporting date. Advances paid towards acquisition of PPE outstanding at each Balance sheet date, are shown under other noncurrent assets.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in the Statement of Profit and Loss. Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to us and its cost can be measured reliably with the carrying amount of the replaced part getting derecognised.
Depreciation
Depreciation is calculated on cost of items of PPE less their estimated residual values over their estimated useful lives using the straight-line method and is recognised in the Statement of Profit and Loss.
Depreciation on items of PPE is provided as per rates corresponding to the useful life specified in Schedule II to the Companies Act, 2013 read with related amendments. The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as follows:
Depreciation is provided on a pro-rata basis on the straight-line basis on the estimated useful life prescribed under Schedule II to Companies Act, 2013 with the following exception: (i) leasehold land and leasehold improvement has been amortised over the lease term or useful life of assets whichever is lower; and (ii) freehold land is not depreciated.
Useful life considered for calculation for various assets class are as follows:
Asset Class |
Useful Life |
Building |
25 to 60 years |
Plant and machinery |
0 to 30 years |
Furniture and fixture |
3 to 10 years |
Office equipment |
3 to 5 years |
Vehicles |
8 to 10 years |
Computer |
3 to 6 years |
We, based on technical assessment made by technical expert and management estimate, depreciate tools included in plant and equipment over estimated useful lives of 0 and 30 years 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.
The depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
Depreciation on additions (disposal) is provided on a pro-rata basis i.e. from (upto) the date on which asset is ready for use (disposed of).
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use and disposal. Any gain or loss arising on derecognition of the asset is measured as the difference between the net disposal proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.
Intangible assets
Acquired Intangible
Intangible assets that are acquired by us are measured initially at cost. Cost of an item of Intangible asset comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use. After initial recognition, an intangible asset is carried at its cost less any accumulated amortisation and any accumulated impairment loss.
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in Statement of Profit and Loss as incurred.
Amortisation
Intangible assets with finite lives are amortised over the useful life and these are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset. The amortisation method, residual value and the useful lives of intangible assets are reviewed annually and adjusted as necessary.
Specialized software are amortized over a period of 3 years or license period whichever is later.
Internally-generated intangible assets - research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated: (i) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (ii) the intention to complete the intangible asset and use or sell it; (iii) the ability to use or sell the intangible asset; (iv) how the intangible asset will generate probable future economic benefits; (v) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangib le asset; and (vi) the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is recognised in the statement of profit and loss in the period in which it is incurred. Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in the statement of profit and loss when the asset is derecognized.
Useful lives of intangible assets
Intangible assets, comprising of software, expenditure on websites, etc. incurred are amortised on a straight line method over a period of its useful life. Internally generated intangibles are amortised over a period of 5 year.
Derecognition
Intangible assets are derecognised on disposal or when no future economic benefits are expected from its use and disposal.
Inventories
Inventories are valued at the lower of cost and net realisable value.
Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, wherever considered necessary. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. The cost of various components of inventory is determined as follows:
Raw Material |
Cost includes purchase cost, duties, taxes and all other costs incurred in bringing the inventory to their present location. Cost is determined on Weighted Average Cost Method. |
Work in Progress |
Cost include appropriate proportion of overheads wherever applicable. Goods in transit are valued at cost excluding import duties wherever applicable |
Finished Goods |
Cost include appropriate proportion of overheads wherever applicable. Goods in transit are valued at cost excluding import duties wherever applicable |
Scrap |
Net realisable value. |
The cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products.
Raw materials and other supplies held for use in the production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value.
The comparison of cost and net realisable value is made on an item-by-item basis.
Retirement and other employee benefits
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., salaries and wages and bonus etc., if we have a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
Post-employment benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and will have no legal or constructive obligation to pay further amounts. We make specified monthly contributions towards employee provident fund and employee state insurance scheme (‘ESI) to Government administered scheme which is a defined contribution plan. Our contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Gratuity is a defined benefit plan. The administration of the gratuity scheme has been entrusted to the Life Insurance Corporation of India (‘LIC). Ou r net obligation in respect of gratuity is calculated separately by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.
Re-measurements of the net defined benefit liability i.e. Gratuity, which comprise actuarial gains and losses are recognised in Other Comprehensive Income (OCI). We determine the net interest expense (income) on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then- net defined benefit liability, taking into account any changes in the net defined benefit liability during the period as a result of contributions and benefit payments. Service cost and net interest cost on the defined benefit liabilities/assets are recognized in the statement of profit and loss as employee benefit expense and finance costs respectively.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (‘past service cost or ‘past service gain) or the gain or loss on curtailment is recognised immediately in the Statement of Profit and Loss. We recognise gains and losses on the settlement of a defined benefit plan when the settlement occurs.
During the year ended March 31, 2026, we revised our accounting policy for the presentation of the net interest component of defined benefit plans and have presented the same under Finance Costs instead of Employee Benefits Expense. Accordingly, comparative figures for the years ended March 31, 2025 and March 31, 2024 have been regrouped/reclassified to align with the current years accounting policy. This change relates solely to presentation and has no impact on profit, earnings per share and net worth for any of the periods presented.
In respect to Subsidiary company i.e. Hewland Engineering Limited :
The Company operates a defined benefit pension scheme for eligible employees which was closed to future accrual on 31 May 2011. The assets were held separately from those of the Company. The pension scheme surplus or deficit is recognised in the Statement of financial position as a pension asset or liability as appropriate. Contributions to the scheme are paid according to a deficit reduction plan agreed with the Trustees. From 1 June 2011 these consist of deficit funding only. The overall expected rate of return of the plan assets has been based on the average expected return of each asset class, weighted by the amount of assets in each class. The scheme holds quoted securities which are valued at current bid price.
The Company contributes to money purchase pension schemes on behalf of eligible employees including from 1 June 2011, contributions previously made to the defined benefit scheme. Additional retirement benefits are provided for nominated employees through a money purchase executive benefit scheme. These schemes are administered independently, and the assets held separately from the Company. The premiums are charged to the profit and loss accounts.
Pensions:
The Defined Benefit pensions scheme liabilities are calculated using an independent actuarial valuation using the latest available tri-annual valuation and rolling this forward to the current reporting date.
The discount rate used is derived from a Broadstone Sterling AA Yield curve plus a determined margin to reflect the average term of the liabilities being longer than the duration of the index.
Inflation and pension increases assume the Bank of England implied inflation spot rate at a term consistent with the term of the liabilities less a factor to reflect supply and demand issues, CPI inflation is assumed to lag long term RPI inflation by a predetermined factor.
Mortality assumptions are updated from the latest version of the CMI projection model and assumptions are made to determine the long term improvement rates and the proportion of members expected to be married at retirement.
Short term and other long term employee benefits:
The undiscounted amount of short-term employee benefits expected to be paid in exchange of services rendered by employees are recognised during the period when the employee renders the services. These benefits include salaries, wages, performance incentives and compensated absences.
The liability in respect of accumulated compensated absences is provided for on the basis of actuarial valuation carried out at the year-end using the Projected Unit Credit Method. Actuarial gains and losses are recognised in the Statement of Profit and Loss of the year in which they occur.
Share - based payment
Employees (including senior executives) of ours receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model.
That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and our best estimate of the number of equity instruments that will ultimately vest. The statement of profit and loss expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of our best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised is the expense had the terms had not been modified if the original terms of the award are met. An additional expense is recognised for any modification that increases the total fair value of the share-based payment transaction or is otherwise beneficial to the employee as measured at the date of modification. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
Provisions
A provision is recognised if, as a result of a past event, we have a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the time of money is material, provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future losses are not provided for.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
Constructive obligation is an obligation that derives from an entity s actions where: (i) by an established pattern of past p ractice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities; and (ii) as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received, and the amount of the receivable can be measured reliably.
Contingent liabilities and contingent assets
A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions but are disclosed unless the possibility of outflow of resources is remote.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the entity. Contingent assets are recognised when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
A contingent asset is disclosed where an inflow of economic benefits is probable.
Commitments
Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each reporting date.
Revenue from contract with customer
Revenue from contracts with customers is recognised when the control of the goods or services are transferred to the customer at an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We have generally concluded that we are the principal in our revenue arrangement because we typically control goods or services before transferring them to the customers.
Revenue from sale of goods is recognised based on a 5-Step Methodology which is as follows:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligation in contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Revenue is measured based on transaction price, which is the fair value of the consideration received or receivable, stated net of discounts, returns and value added tax. Transaction price is recognised based on the price specified in the contract, net of the estimated sales incentives/ discounts. Also, in determining the transaction price for the sale of products, we consider the effects of variable consideration, the existence of significant financing components, noncash consideration, and consideration payable to the customer (if any).
As per Ind AS 115, we determine whether there is a significant financing component in our contracts. However, we have decided to use practical expedient provided in Ind AS 115 and not to adjust the promised amount of consideration for the effe cts of a significant financing components in the contracts, where we expect, at contract inception that the period of completion of contract terms are one year or less. Therefore, for short-term advances, we do not account for a financing component. No longterm advances from customers are generally received by us.
Sales-related warranties associated with goods cannot be purchased separately and they serve as an assurance that the products sold comply with agreed-upon specifications. Accordingly, we account for warranties in accordance with Ind AS 37.
We disaggregate revenue from contracts with customers by geography.
Sale of services
We recognise revenue from these contracts on satisfaction of performance obligation towards rendering of such services over time, as and when the services are rendered in accordance with the specific terms of contracts with customers. Our performance obligation is limited to providing resources required for these services
Export benefits
Export incentive entitlements are recognised as income when the right to receive credit as per the terms of the scheme is established in respect of the exports made, and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
Disaggregated revenue information
We present disaggregation of revenue from contracts with customers for the respective years by type of goods and services and timing of revenue recognition. We believe that this disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by industry, market and other economic factors.
Contract balances
Trade Receivable
A receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section of Financial instruments - initial recognition and subsequent measurement.
Contract liabilities
A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before we transfer the related goods or services. Contract liabilities are recognised as revenue when we perform under the contract (i.e., transfers control of the related goods or services to the customer).
Recognition of interest income or expense
Interest income or expense is accrued on a time basis and recognised using the effective interest method.
The ‘effective interest rate is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument to: (i) the gross carrying amount of the financial asset; or (ii) the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit- impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
Dividend income is recognized when the right to receive payment is established.
Claims receivables on account of insurance are accounted for to the extent we are reasonably certain of their ultimate collection. Borrowing costs
Borrowing costs are interest and other costs incurred by us in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as a part of cost of the asset. Other borrowing costs are recognised as an expense in the period in which they are incurred. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Taxes
Income tax comprises current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates to a business combination or an item recognised directly in equity or in other comprehensive income.
Current income tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. Current income tax assets and liabilities are measured at the amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income (OCI) or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. We shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.
Deferred tax liabilities are recognised for all 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 and In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of 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 and In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
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. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
In assessing the recoverability of deferred tax assets, we rely on the same forecast assumptions used elsewhere in the financial statements and in other management reports.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
We offset deferred tax assets and deferred tax liabilities if and only if we have a legally enforceable right to set off current tax liabilities and assets and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authorities.
GST paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of GST paid, except: (i) when the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable; or (ii) when receivables and payables are stated with the amount of tax included.
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
Leases
We evaluate each contract or arrangement, whether it qualifies as lease as defined under Ind AS 116:
Us as a lessee
Our lease asset classes primarily consist of leases for land and buildings. We assess whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, we assess whether: (i) the contract involves the use of an identified asset (ii) we have substantially all of the economic benefits from use of the asset through the period of the lease and (iii) we have the right to direct the use of the asset.
At the date of commencement of the lease, we recognize a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which we are a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, we recognize the lease payments as an operating expense on a straight-line basis over the term of the lease. "
Lease arrangements may include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities may include these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates pertaining to us. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if we change our assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flow activities.
Financial instruments
A Financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus except trade receivables where there is no significant financing component, are recorded at transaction price, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that we commit to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories: (i) debt instruments at amortised cost; (ii) debt instruments at fair value through other comprehensive income (FVOCI); (iii) debt instruments, derivatives and equity instruments at fair value through profit or loss (FVPL); and (iv) equity instruments measured at fair value through other comprehensive income (FVOCI).
Debt instruments at amortised cost
A ‘debt instrument is measured at the amortised cost if the asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the gross carrying amount of the financial asset or the amortised cost of the
financial liability. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in other income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss.
Debt instrument at FVOCI
A ‘debt instrument is classified as at the FVOCI if the objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and the assets contractual cash flows represent SPPI.
Debt instruments included within the FVOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in the other comprehensive income (OCI). On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified to the Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
Debt instrument at FVPL
FVPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVOCI, is classified as at FVPL. In addition, at initial recognition, we may irrevocably elect to designate a debt instrument, which otherwise meets amortised cost or FVOCI criteria, as at FVPL. However, such adoption is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch).
Debt instruments included within the FVPL category are measured at fair value with all changes recognised in the Statement of Profit and Loss.
Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS 103 applies are classified as at FVPL. For all other equity instruments, we may make an irrevocable adoption to present in other comprehensive income subsequent changes in the fair value. We make such adoption on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
If we decide to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to profit or loss, even on sale of investment. However, we may transfer the cumulative gain or loss to retained earnings.
Equity instruments included within the FVPL category are measured at fair value with all changes recognised in the Statement of Profit and Loss.
Impairment of financial assets
We recognise loss allowances for expected credit loss on financial assets measured at amortised cost. At each reporting date, we assess whether financial assets carried at amortised cost are credit- impaired. A financial asset is ‘credit-impaired when one or more events that have detrimental impact on the estimated future cash flows of the financial assets have occurred.
Evidence that the financial asset is credit-impaired includes the following observable data: (i) significant financial difficulty of the borrower or issuer; (ii) the breach of contract such as a default or being past due for 90 days or more; (iii) the restructuring of a loan or advance by us on terms that we would not consider otherwise; (iv) it is probable that the borrower will enter bankruptcy or other financial re-organisation; or (v) the disappearance of an active market for a security because of financial difficulties.
We measure loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses: Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.
12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which we are exposed to credit risk.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, we consider reasonable and supportable information that is relevant and available without
undue cost or effort. This includes both quantitative and qualitative information and analysis, based on our historical experience and informed credit assessment and including forward looking information.
Measurement of expected credit losses
Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. difference between the cash flow due to us in accordance with the contract and the cash flow that we expect to receive).
Presentation of allowance for expected credit losses in the balance sheet Loss allowance for financial assets measured at the amortised cost is deducted from the gross carrying amount of the assets.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when we determine that the debtors do not have assets or sources of income that could generate sufficient cash flows to repay the amount subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with our procedure for recovery of amounts due.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from our balance sheet) when: (i) the rights to receive cash flows from the asset have expired; or (ii) we have transferred our rights to receive cash flows from the asset or have assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through arrangement, and either (a) we have transferred substantially all the risks and rewards of the asset, or (b) we have neither transferred nor retained substantially all the risks and rewards of the asset, but have transferred control of the asset.
When we have transferred our rights to receive cash flows from an asset or have entered into a pass-through arrangement, we evaluate if and to what extent we have retained the risks and rewards of ownership. When we have neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, we continue to recognise the transferred asset to the extent of our continuing involvement. In that case, we also recognise an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that we have retained.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
Our financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in two categories: (i) financial liabilities at fair value through profit or loss (FVPL); and (ii) financial liabilities at amortised cost (loans and borrowings).
A financial liability is classified as at FVPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVPL are measured at fair value and net gains and losses, including any interest expense, are recognised in Statement of Profit and Loss.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in Statement of Profit and Loss. Any gain or loss on derecognition is also recognised in Statement of Profit and Loss.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
Derivative financial instruments
We use various types of derivative financial instruments to hedge our currency and interest risk etc. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the Balance Sheet when, and only when, we currently have a legally enforceable right to set off the amounts and we intend either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Impairment of non-financial assets
Our non-financial assets other than inventories and deferred tax assets, are reviewed at each reporting date to determine if there is indication of any impairment. If any such indication exists, then the assets recoverable amount is estimated. For impairment testing, assets that do not generate independent cash flows are grouped together into cash generating units (CGUs). Each CGU represents the smallest group of assets that generate cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of as CGU (or an individual asset) is the higher of its value in use and fair value less cost to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in Statement of Profit and Loss. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined net of depreciation or amortisation, if no impairment loss had been recognised.
Operating Segments
An operating segment is a component of ours that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of our other components, and for which discrete financial information is available. All operating segments operating results are reviewed regularly by our Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segments and assess their performance. Cash and cash equivalents
Cash and cash equivalents comprises cash in hand, demand deposits with banks, other short term highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Cash flow statement
Cash flows are reported using the indirect method, whereby profit after tax is adjusted for the effects of transactions of a noncash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Statement of cash flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of: (i) changes during the period in operating receivables and payables transactions of a non-cash nature; (ii) noncash items such as depreciation, provisions, deferred taxes, unrealised gains and losses; and (iii) all other items for which the cash effects are investing or financing cash flows.
Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
Cash dividend
We recognise a liability to pay dividend to our equity holders when the distribution is authorised and the distribution is no longer at our discretion. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Earnings per share
Basic earnings per share (‘EPS) is computed by dividing the net profit or loss (excluding OCI) for the year attributable to equity shareholders by the weighted average number of shares outstanding during the year.
Diluted earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of shares outstanding during the period as adjusted for the effects of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented."
Functional and presentation currency
The Financial Statements are presented in Indian Rupees, which is the functional, and presentation currency of the Company.
The items included in Financial Statements of each of our entities are measured using the currency of primary economic environment in which the entity operates (i.e. ‘functional currency).
Transactions and balances
Transactions in foreign currencies are initially recorded in the relevant functional currency at the exchange rate prevailing at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the closing exchange rate prevailing as at the reporting date with the resulting foreign exchange differences, on subsequent re-statement / settlement, recognised in the Statement of Profit and Loss. Non-monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the exchange rate prevalent, at the date of initial recognition (in case they are measured at historical cost) or at the date when the fair value is determined (in case they are measured at fair value) - the resulting foreign exchange difference, on subsequent re-statement / settlement, recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in the OCI or directly in equity.
The equity items denominated in foreign currencies are translated at historical cost.
Foreign operations
The assets and liabilities of foreign operations (including the goodwill and fair value adjustments arising on the acquisition of foreign entities) are translated into Rupees at the exchange rates prevailing at the reporting date whereas their Statements of Profit and Loss are translated into Rupees at monthly average exchange rates and the equity is recorded at the historical rate. However, if exchange rates fluctuate significantly during the period, the exchange rates at the date of transactions are used. The resulting exchange differences arising on the translation are recognised in OCI and held in foreign currency translation reserve (‘FCTR), a component of equity. On disposal of a foreign operation (that is, disposal involving loss of control), the component of OCI relating to that particular foreign operation is reclassified to profit or loss.
Net Investment in Foreign Operations
When a monetary item forms part of our net investment in a foreign operation, the exchange differences are then recognised initially in other comprehensive income and are held within the FCTR.
Such FCTR is reclassified from equity to profit and loss on disposal of the foreign operation.
Fair value measurement
A number of our accounting policies and disclosures require measurement of fair values, for both financial and non-financial assets and liabilities. We have an established control framework with respect to measurement of fair values. This includes the top management division which is responsible for overseeing all significant fair value measurements, including Level 3 fair values. The top management division regularly reviews significant unobservable inputs and valuation adjustments. If third party information, is used to measure fair values, then the top management division assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirement of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: (i) Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities; (ii) Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and (iii) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or liability, we use observable market data as far as possible. If the inputs used to measure the fair value of an asset or liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirely in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
We recognise transfers between levels of the fair value hierarchy at the end of the reporting period during which the changes have occurred.
Further information about the assumptions made in measuring fair values used in preparing these standalone financial statements is included in the respective notes.
Exceptional items
When items of income and expense within statement of profit and loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of ours for the period, the nature and amount of such material items are disclosed separately as exceptional items.
Basis of measurement
The Restated Consolidated Financial information have been prepared on the historical cost basis except for the following assets and liabilities which have been measured at fair value or revalued amount:
Items |
Measurement basis |
Certain financial assets and liabilities (including derivative instruments) |
Fair value |
(Refer accounting policy regarding financial instruments) |
The Company has prepared the Restated Consolidated Financial information on the basis that it will continue to operate as a going concern.
Changes in accounting policies and disclosures Recent pronouncements
The Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to existing standards under the Companies (Indian Accounting Standards) Rules from time to time. There is no such notification that would have been applicable from April 1, 2026.
Adoption of New and Revised Standards
The Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under the Companies (Indian Accounting Standards) Rules from time to time. During the current year, the Company has applied the following amendments to Ind AS that are effective for annual reporting periods beginning on or after April 1, 2026.
Amendment to Ind AS 1 - Presentation of Financial Statements
Effective April 1, 2026, the amendment relates to the classification of liabilities as current or non-current and non-current liabilities with covenants. In classifying a liability as current, the amendment removes the requirement for the right to defer settlement for at least 12 months after the reporting date and instead requires that such right must exist and have substance as at the reporting date. The amendment also provides guidance on the classification of liabilities subject to covenants. The Company has assessed the impact of this amendment and concluded that it does not have any material impact on its financial statements.
Amendment to Ind AS 7 - Statement of Cash Flows and Ind AS 107 - Financial Instruments: Disclosures
Effective April 1, 2026, the amendment to Ind AS 7 requires entities to disclose information about supplier finance arrangements, including their nature, carrying amount of liabilities, and payment terms, to enable users of financial statements to assess their effects on liabilities, cash flows, and exposure to liquidity risk. Correspondingly, Ind AS 107 has been amended to require additional disclosures regarding the impact of such arrangements on liquidity risk. Based on its assessment, the Company has determined that the amendment does not have any material impact on its financial statements.
Amendment to Ind AS 12 - International Tax Reform: Pillar Two Model Rules
The amendments provide a temporary mandatory exception from accounting for deferred taxes arising from Pillar Two top-up taxes and require entities to disclose that they have applied the exception. The amendments also introduce disclosure requirements relating to exposure to Pillar Two income taxes. These requirements apply for annual reporting periods beginning on or after April 1, 2026. The Company has reviewed the amendment and determined that it does not have any material impact on its financial statements.
Amendment to Ind AS 21 - The Effects of Changes in Foreign Exchange Rates
Effective April 1, 2026, the amendment clarifies how an entity should assess whether a currency is exchangeable and determine the exchange rate to use when exchangeability is lacking. The Company has evaluated the amendment and concluded that its adoption does not have any material impact on the disclosures or amounts recognized in these financial statements.
Standards issued but not yet effective
Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants - Amendments to
Ind AS 1: The amendments clarify that lender waivers obtained after the reporting date cannot be considered for the purpose of classifying liabilities as current or non-current and require retrospective application in accordance with Ind AS 8. These amendments are effective for reporting periods beginning on or after April 1, 2026. The Company will evaluate the impact of this amendment and implement the necessary changes in its financial reporting for periods commencing on or after the effective date.
Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the managements best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Therefore, actual results could differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Judgements
In the process of applying our accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:
Revenue from contracts with customers
We applied judgements that significantly affect the determination of the amount and timing of revenue from contracts with customers, such as identifying performance obligations in a bundled sales transactions, wherein, we sell goods, transportation and warranty services bundled together with sales of goods. We allocated the portion of the transaction price to goods basis on our relative standalone prices.
Business Combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value on the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
Non-Cumulative Compulsorily Convertible Preference Shares
We have issued Non-Cumulative Compulsorily Convertible Preference Shares which meets the fixed-to-fixed criteria at the date of issuance. We have assessed the terms of such instruments and classified these as equity.
Impairment testing
We have reviewed our carrying value of long term investments in equity shares as disclosed in note 11 of Restated Consolidated Financial information at the end of each reporting period, for possible impairment if there are events or changes in circumstances that indicate that carrying amount of assets may not be recoverable. If the recoverable value, which is based upon economic circumstances and future plan is less than its carrying amount, the impairment loss is accounted.
Expected credit losses on financial assets
The impairment provisions of financial assets are based on assumptions about risk of default and expected timing of collection. We use judgment in making these assumptions and selecting the inputs to the impairment calculation, based on our history of collections, customers creditworthiness, existing market conditions as well as forward looking estimates at the end of each reporting period. Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on us and that are believed to be reasonable under the circumstances.
Determining lease term
We determine the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. We have some property lease arrangements with our holding group that include option to terminate the contract by either party at any time by giving advance notice. We applied judgment in evaluating whether it is reasonably certain for both the parties to terminate the property lease contract before the lease term. It considered all the factors that create economic incentive for the parties to continue with lease or terminate including alternatives available for the office lease, use of underlying property, leasehold improvements made and accordingly determined lease term.
The lease term is reassessed if an option is actually exercised (or not exercised) or we become obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee.
Estimates and Assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. We based our assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market change or circumstances arising beyond our control. Such changes are reflected in the assumptions when they occur.
Useful life of assets of (Property, plant and equipment)
The charge in respect of periodic depreciation is derived after determining an estimate of an assets expected useful life and the expected residual value at the end of its life. The useful lives and residual values of our assets are determined by management at the time the asset is acquired and reviewed at each financial year end.
Impairment of property, plant and equipment (PPE) and intangible assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arms length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. It does not include restructuring activities that we are not yet committed to or significant future investments that will enhance the assets performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to property, plant and equipment and intangible assets recognised by us.
Contingencies
Contingent Liabilities may arise from the ordinary course of business in relation to claims against us, including legal and other claims. By virtue of their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgements and the use of estimates regarding the outcome of future events.
Recoverability of deferred taxes
In assessing the recoverability of deferred tax assets, management considers whether it is probable that taxable profit will be available against which the losses can be utilised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment.
Estimation of Taxes
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that future taxable profit will be available against which the losses can be utilised. In assessing the probability we consider whether the entity has sufficient taxable temporary differences relating to the same taxation authority and the same taxable entity, which will result in taxable amounts against which the unused tax losses or unused tax credits can be utilised before they expire. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
Government grant
During the period, management has assessed the conditions attached to grants which have been met and has assessed whether the grants will be received or not and the period in which it will be received. Basis assessment, we have recognised the government grants in the Statement of profit and loss and accordingly classified as current and non-current assets.
Recoverability of intangible asset
Capitalisation of cost in intangible assets under development is based on managements judgement
that technological and economic feasibility is confirmed and asset under development will generate economic benefits in future. Based on evaluations carried out, our management has determined that here are no factors which indicates that these assets have suffered any impairment loss.
Climate - related matters
We consider climate-related matters in estimates and assumptions, where appropriate. This assessment includes a wide range of possible impacts on us due to both physical and transition risks. Even though we believe our business model and products will still be viable after the transition to a low-carbon economy, climate-related matters increase the uncertainty in estimates and assumptions underpinning several items in the Restated Consolidated Financial information. Even though climate-related risks might not currently have a significant impact on measurement, we are closely monitoring relevant changes and developments, such as new climate-related legislation. The items and considerations that are most directly impacted by climate- related matters are useful life of property, plant and equipment and Impairment of non-financial assets.
CHANGES IN ACCOUNTING POLICIES
There have been no changes in our accounting policies during Fiscal 2026, 2025 and 2024, except as mentioned below:
Put Option Liability: We continue to control Hewland Engineering Limited, and have recorded non-controlling interest ("NCI") for shares held by third parties. An agreement has been entered into with certain NCI holder, which provides for a put as well as a call option, exercisable at a price determined as per the terms of the agreement. We have concluded that we do not control these shares and hence have recorded these shares as part of our NCI. We have determined that the triggering events for exercising the option under the agreement are not within our complete control and have thus recorded a call option liability at the present value of the expected future outflow, which is also the maximum amount, by debiting NCI reserve. Subsequent re-measurement of this liability is also recognised in the same head considering adjustments for transactions with NCI, that do not result in loss of control, are accounted for as equity transactions.
Internally generated intangible assets- research and development expenditure: Internally generated intangible assets are amortised over a period of five years.
Inventories. The cost of various components of inventory is determined as follows:
Component of Inventory |
As of March 31, 2026 |
As of March 31, 2025 |
Finished Goods |
Cost include appropriate proportion of overheads wherever applicable. Goods in transit are valued at cost excluding import duties wherever applicable |
Cost includes purchase cost, duties, taxes and all other costs incurred in bringing the inventory to their present location. Cost is determined on Weighted Average Cost Method |
Defined Benefit Plan
Particulars |
As of March 31, 2026 |
As of March 31, 2025 |
Service costs and net interest cost on defined benefit obligations |
Service cost and net interest cost on the defined benefit liabilities/assets are recognized in the statement of profit and loss as employee benefit expense and finance costs respectively. |
Service cost and net interest cost on the defined benefit liabilities/assets are recognized in the statement of profit and loss |
During the year ended March 31,2026, we revised our accounting policy for the presentation of the net interest component of defined benefit plans and have presented the same under Finance Costs instead of Employee Benefits Expense. Accordingly, comparative figures for the years ended March 31, 2025 and March 31, 2024 have been regrouped/reclassified to align with the current years accounting policy. This change relates solely to presentation and has no impact on profit, earnings per share and net worth for any of the periods presented.
Changes in accounting policies and disclosures - Recent Pronouncements: The Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to existing standards under the Companies (Indian Accounting Standards)Rules from time to time. MCA has notified amendments to Ind AS - Presentation of Financial Statements (classification of liabilities as current or non-current, including liabilities with covenants). Ind AS 12- income Taxes (International Tax Reform- Pillar Two Model Rules), Ind AS 21- The Effects of Changes in Foreign Exchange Rates (Lack of Exchangeability) and Ind AS 7- Statement of Cash Flows and Ind AS 107- Financial Instruments: Disclosures (Supplier Finance Arrangements) respectively, effectively from April 01,2026. The new standard and aforesaid amendment did not have any material impact on the amounts recognized and are not expected to significantly affect the current or future periods. Amendments to Ind AS issued but not yet effective. Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants - Amendments to Ind AS 1 - The amendments clarify that lender waivers obtained after the reporting date cannot be considered for the purpose of classifying liabilities as current or non-current and require retrospective application in accordance with Ind AS 8, effective for reporting periods beginning on or after April 1, 2026. We do not expect any material impact on its financial statements.
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
Total Income
Our total income comprises revenue from operations and other income. We generate majority of our revenue from the sale of gear components, assemblies, gearboxes, e-axle systems, motors, drive systems in Powertrain solutions and various structural components in Alloy and Metallics for electrified as well as non-electrified two-wheelers, three-wheelers, passenger vehicles, commercial vehicles and non-automotive sectors to global automotive OEMs across US, Europe, India and ASEAN region.
Expenses
Cost of Materials Consumed, Purchases of Stock-in-Trade and Changes in Inventories of Finished Goods and Work-in Progress and Stock in Trade
Cost of materials consumed primarily includes the cost of raw materials. For gear sets, assemblies and gearboxes, key raw materials are gear blanks. For assembly of CVT hubs, several components are being sourced as raw materials which includes planets, die cast hub housing, controllers, free wheels and plastic molded components. For manufacturing traction motors, a number of components are sourced as raw materials which includes die cast hub housing, magnets, planet gears and rings. For e-drive systems, raw materials include key electronic components such as batteries, controllers, sensors, displays, chargers, motors and throttles. The principal raw materials for alloys and metallics components are metal sheets.
Changes in inventories of finished goods and work-in-progress denotes increase/decrease in inventories of finished goods, work in progress and stock in trade and stores and spares between opening and closing dates of a reporting period.
Employee Benefit Expense
Employee benefit expenses primarily include salaries, wages, bonus, share based payments paid / accrued to our employees and employee welfare expenses.
Depreciation and Amortization expenses
Depreciation and amortization expenses primarily include depreciation expenses on our property, plant and equipment and amortization expenses on our intangibles and right of use assets.
Finance Cost
Finance cost includes interest on term loans and working capital borrowings, finance charges for sanction/renewal of credit facilities and bank charges for various banking and/or trade finance transactions done with the banks.
Other Expenses
Other expenses primarily comprise contract labour charges, power and fuel expenses, consumption of stores and spares, packaging materials consumed, repair and maintenance on building, plant & machinery and freight and forwarding charges.
Administrative expenses mainly consist of legal and professional charges, travelling, conveyance and vehicle expenses, insurance, repair and maintenance - others.
RESULTS OF OPERATIONS FOR FISCALS 2026, 2025 AND 2024
The following table sets forth certain information with respect to our results of operations on a consolidated basis for Fiscals 2026, 2025 and 2024:
Particulars |
Fiscal |
|||||
2026 |
2025 |
2024 |
||||
| (Rs. million) | Percentage of Total Income (%) | (Rs. million) | Percentage of Total Income (%) | (Rs. million) | Percentage of Total Income (%) | |
Income |
||||||
Revenue from operations |
11,883.51 | 97.67% | 10,895.93 | 98.05% | 10,643.86 | 98.24% |
Other income |
283.91 | 2.33% | 216.40 | 1.95% | 190.33 | 1.76% |
Total Income |
12,167.42 | 100.00% | 11,112.33 | 100.00% | 10,834.19 | 100.00% |
Expenses |
||||||
Cost of materials consumed |
6,535.02 | 53.71% | 6,304.43 | 56.73% | 6,404.49 | 59.11% |
Purchase of stock-in-trade |
277.14 | 2.28% | 76.57 | 0.69% | - | - |
Change in inventories of finished goods, work-in-progress and stock-in-trade |
116.72 | 0.96% | (6.69) | (0.06%) | 45.67 | 0.42% |
Employee benefits expense? |
1,645.08 | 13.52% | 1,711.38 | 15.40% | 1,773.67 | 16.37% |
Finance costs |
408.38 | 3.36% | 369.84 | 3.33% | 334.13 | 3.08% |
Depreciation and amortization expense |
459.40 | 3.78% | 379.44 | 3.41% | 285.51 | 2.64% |
Other expenses |
2,096.05 | 17.23% | 1,886.60 | 16.98% | 1,747.60 | 16.13% |
Total expenses |
11,537.79 | 94.83% | 10,721.57 | 96.48% | 10,591.07 | 97.76% |
Particulars |
Fiscal |
|||||
2026 |
2025 |
2024 |
||||
| (Rs. million) | Percentage of Total Income (%) | (Rs. million) | Percentage of Total Income (%) | (Rs. million) | Percentage of Total Income (%) | |
Restated profit before exceptional items and tax |
629.63 | 5.17% | 390.76 | 3.52% | 243.12 | 2.24% |
Exceptional items |
(19.59) | (0.16%) | - | - | - | - |
Restated profit before tax |
610.04 | 5.01% | 390.76 | 3.52% | 243.12 | 2.24% |
Tax expense: |
||||||
Current tax |
214.37 | 1.76% | 77.43 | 0.70% | 12.46 | 0.12% |
Deferred tax |
(16.01) | (0.13%) | (14.63) | (0.13%) | 60.31 | 0.56% |
Total tax expense |
198.36 | 1.63% | 62.80 | 0.57% | 72.77 | 0.67% |
Restated profit for the period/year |
411.68 | 3.38% | 327.96 | 2.95% | 170.35 | 1.57% |
(1) Includes share based payment mentioned which are non-cash in nature.
(2) The restated profit for the period/ year is including the pre-tax non-cash share-based payment of Rs. 105.03 million in Fiscal 2026, Rs. 148.17 million in Fiscal 2025 and Rs. 394.62 million in Fiscal 2024.
FISCAL 2026 COMPARED TO FISCAL 2025 Total Income
Total income increased from Rs. 11,112.33 million in Fiscal 2025 to Rs. 12,167.42 million in Fiscal 2026 primarily on account of increases in revenue from operations and other income.
Revenue from Operations
Revenue from operations increased by 9.06% from Rs. 10,895.93 million in Fiscal 2025 to Rs. 11,883.51 million in Fiscal 2026, primarily on account of an increase in offtake from certain Indian and international customers.
The table below provides details of revenue from operations generated from Powertrain Solutions and A&M Business segments and corresponding year on year increase/(decrease) for Fiscal 2026 and Fiscal 2025:
Segment |
Fiscal 2026 |
Fiscal 2025 |
||
| Revenue from Operations (Rs. million) | Percentage of Revenue from Operations (%) | Revenue from Operations (Rs. million) | Percentage of Revenue from Operations (%) | |
Powertrain Solutions |
6,377.53 | 53.67% | 5,342.47 | 49.03% |
A&M |
5,505.98 | 46.33% | 5,553.46 | 50.97% |
Other operating income marginally decreased from Rs. 390.45 million in Fiscal 2025 to Rs. 348.76 million in Fiscal 2026 primarily on account of low call off recovery received from customers in Fiscal 2026 as compared to Fiscal 2025.
Other Income
Other income increased by 31.20% from Rs.216.40 million in Fiscal 2025 to Rs.283.91 million in Fiscal 2026. This increase was primarily attributable to (i) an increase in foreign exchange fluctuation gain (net) from Rs.120.49 million in Fiscal 2025 to Rs. 191.33 million in Fiscal 2026 on account of increase in revenue from international customers and positive fluctuations of foreign exchange, and (ii) an increase in commission income from Rs.18.30 million in Fiscal 2025 to Rs.30.76 million in Fiscal 2026. These increases were partially offset by a decrease in interest income on bank deposits from Rs.40.89 million in Fiscal 2025 to Rs.22.95 million in Fiscal 2026 and a decrease in excess provisions/liabilities written back from Rs.20.03 million in Fiscal 2025 to Rs.1.91 million in Fiscal 2026.
Expenses
Total expenses increased by 7.61% from Rs. 10,721.57 million in Fiscal 2025 to Rs. 11,537.79 million in Fiscal 2026, primarily on account of an increase in cost of materials consumed, finance costs, depreciation and amortisation expense, and other expenses. This was partially offset by a decrease in employee benefits expense.
Cost of materials consumed
Cost of material consumed was Rs. 6,535.02 million in Fiscal 2026 as compared to Rs. 6,304.43 million in Fiscal 2025. Purchases during the period / year were Rs. 6,770.10 million in Fiscal 2026 as compared to Rs. 6,380.85 million in Fiscal 2025.
Employee benefits expense
Employee benefits expenses decreased by 3.87% from Rs. 1,711.38 million in Fiscal 2025 to Rs.1,645.08 million in Fiscal 2026. This decrease was primarily attributable to (i) a decrease in share-based payment expenses from Rs.148.17 million in Fiscal 2025 to Rs.105.03 million in Fiscal 2026, (ii) a decrease in gratuity expense from Rs. 31.77 million in Fiscal 2025 to Rs. 22.09 million in
Fiscal 2026. This was on account of a decrease in our employees from 1,532 as of March 31, 2025 to 1,388 as to March 31, 2026.
Finance costs
Finance costs increased by 10.42% from Rs.369.84 million in Fiscal 2025 to Rs.408.38 million in Fiscal 2026. This increase was primarily attributable to (i) an increase in interest expense on term loans and working capital facilities from Rs.220.05 million in Fiscal 2025 to Rs.248.97 million in Fiscal 2026 on account of an increase in working capital loans availed by us, and (iii) an increase in other borrowing costs -interest on lease liability from Rs.19.02 million in Fiscal 2025 to Rs.26.01 million in Fiscal 2026.
Depreciation and amortisation expenses
Depreciation and amortisation expense increased by 21.07% from Rs.379.44 million in Fiscal 2025 to Rs.459.40 million in Fiscal 2026. This increase was primarily attributable to (i) an increase in amortisation of intangible assets from Rs.12.29 million in Fiscal 2025 to Rs.51.80 million in Fiscal 2026, (ii) an increase in depreciation of property, plant and equipment from Rs.306.95 million in Fiscal 2025 to Rs.340.87 million in Fiscal 2026, and (iii) an increase in depreciation on right-of-use assets from Rs.60.20 million in Fiscal 2025 to Rs.66.73 million in Fiscal 2026.
Other Expenses
Other expenses increased by 11.10% from Rs. 1,886.60 million in Fiscal 2025 to Rs. 2,096.05 million in Fiscal 2026 primarily on account of increases in:
• Consumption of store and spares from Rs. 272.75 million in Fiscal 2025 to Rs. 373.84 million in Fiscal 2026;
• Freight and forward charges from Rs. 152.00 million in Fiscal 2025 to Rs. 180.49 million in Fiscal 2026; and
• Contract Labour charges from Rs. 380.64 million in Fiscal 2025 to Rs. 414.68 million in Fiscal 2026.
This increase was commensurate with the increase in our production and operations during Fiscal 2026.
Restated profit before exceptional items and tax
Restated profit before exceptional items and tax increased from Rs. 390.76 million in Fiscal 2025 to Rs. 629.63 million in Fiscal 2026.
Exceptional items
Exceptional items - statutory impact of new labour codes was Rs.19.59 million in Fiscal 2026 as compared to nil in Fiscal 2025. Restated profit before tax
For the reasons stated above, restated profit before tax was Rs. 390.76 million in Fiscal 2026 as compared to Rs. 610.04 million in Fiscal 2025.
Total tax expense
Total tax expense in Fiscal 2026 increased from Rs. 62.80 million in Fiscal 2025 to Rs. 198.36 million in Fiscal 2026. Current tax expense increased from Rs. 77.43 million in Fiscal 2025 to Rs. 214.37 million in Fiscal 2026 on account of increase in operational profit.
Restated profit for the year
For the reasons stated above, profit for the year increased to Rs. 411.68 million in Fiscal 2025 compared to Rs. 327.96 million in Fiscal 2026.
FISCAL 2025 COMPARED TO FISCAL 2024 Total Income
Total income increased from Rs. 10,834.19 million in Fiscal 2024 to Rs. 11,112.33 million in Fiscal 2025 primarily on account of an increase in revenue from operations and other income.
Revenue from Operations
Revenue from operations increased by 2.37% from Rs.10,643.86 million in Fiscal 2024 to Rs.10,895.93 million in Fiscal 2025, primarily on account of an increase in revenue from the Powertrain segment from one of our international customers and the A&M segment from one of our domestic customers.
The table below provides details of revenue from operations generated from Powertrain Solutions and A&M Business segments and corresponding year on year increase/(decrease) for Fiscal 2025 and Fiscal 2024:
Particulars |
Fiscal 2025 | Fiscal 2024 | Increase/ (Decrease) |
| (t mi | llion) | (%) | |
Powertrain Solutions |
5,342.47 | 5,202.31 | 2.69% |
A&M |
5,553.46 | 5,441.55 | 2.05% |
Other operating income increased from Rs. 249.85 million in Fiscal 2024 to Rs. 390.45 million in Fiscal 2025 primarily on account of low call off recovery received from customers in Fiscal 2024 as compared to Fiscal 2025.
Other Income
Other income increased by 13.70% from Rs.190.33 million in Fiscal 2024 to Rs.216.40 million in Fiscal 2025. This increase was primarily attributable to an increase in foreign exchange fluctuation gain (net) from Rs.24.61 million in Fiscal 2024 to Rs.120.4 9 million in Fiscal 2025 on account of an increase in revenue from international customers and positive fluctuations of foreign exchange. This was partially offset by a decrease in interest income - others from Rs.36.72 million in Fiscal 2024 to Rs.6.55 million in Fiscal 2025, and a decrease in gain on derecognition of right-of-use asset and lease liability from Rs.10.51 million in Fiscal 2024 to nil in Fiscal 2025.
Expenses
Total expenses increased by 1.23% from Rs.10,591.07 million in Fiscal 2024 to Rs.10,721.57 million in Fiscal 2025, primarily on account of increases in finance costs, depreciation and amortisation expense, and other expenses. This was partially offset by a decrease in employee benefits expense and cost of materials consumed.
Cost of materials consumed
Cost of material consumed was Rs.6,304.43 million in Fiscal 2025 as compared to Rs.6,404.49 million in Fiscal 2024. Purchases during the period / year were Rs.6,380.85 million in Fiscal 2025 as compared to Rs.6,297.37 million in Fiscal 2024.
Employee benefits expense
Employee benefits expense decreased by 3.51% from Rs.1,773.67 million in Fiscal 2024 to Rs.1,711.38 million in Fiscal 2025. This decrease was primarily attributable to a decrease in share-based payment expenses from Rs.394.62 million in Fiscal 2024 to Rs.148.17 million in Fiscal 2025, in accordance with our ESOP scheme. This decrease was partially offset by an increase in salaries, wages and bonus from Rs.1,177.86 million in Fiscal 2024 to Rs.1,340.88 million in Fiscal 2025 primarily on account of annual increments.
Finance costs
Finance costs increased by 10.68% from Rs.334.13 million in Fiscal 2024 to Rs.369.84 million in Fiscal 2025. This increase was primarily attributable to an increase in interest expense on term loans and working capital facilities from Rs.162.81 million i n Fiscal 2024 to Rs.220.05 million in Fiscal 2025 on account of an increase in borrowings availed by us. This was partially offset by a decrease in other borrowing cost - others from Rs.18.16 million in Fiscal 2024 to Rs.7.78 million in Fiscal 2025.
Depreciation and amortisation expenses
Depreciation and amortisation expense increased by 32.90% from Rs.285.51 million in Fiscal 2024 to Rs.379.44 million in Fiscal 2025. This increase was primarily attributable to (i) an increase in depreciation of property, plant and equipment from Rs.226.88 million in Fiscal 2024 to Rs.306.95 million in Fiscal 2025, (ii) an increase in amortisation of intangible assets from Rs.8.55 million in Fiscal 2024 to Rs.12.29 million in Fiscal 2025 and (iii) an increase in depreciation on right-of-use assets from Rs.50.08 million in Fiscal 2024 to Rs.60.20 million in Fiscal 2025.
Other Expenses
Other expenses increased by 7.95 % from Rs. 1,747.60 million in Fiscal 2024 to Rs. 1,886.60 million in Fiscal 2025 primarily on account increases in:
• Contractual labour charges from Rs. 333.34 million in Fiscal 2024 to Rs. 380.64 million in Fiscal 2025 on account of revision in minimum wages;
• Consumption of stores and spares from Rs. 210.02 million in Fiscal 2024 to Rs. 272.75 million in Fiscal 2025 on account of increase in revenue generate from the Powertrain segment;
• Power and fuel from Rs.281.98 million in Fiscal 2024 to Rs.297.75 million in Fiscal 2025.
These increases were partially offset by a decrease in foreign exchange fluctuation loss (net) from U29.81 million in Fiscal 2024 to nil in Fiscal 2025, and a decrease in packing material consumed from U222.03 million in Fiscal 2024 to U214.95 million in Fiscal 2025.
Restated profit before exceptional items and tax
Restated profit before exceptional items and tax increased from Rs. 243.12 million in Fiscal 2024 to Rs. 390.76 million in Fiscal 2025.
Restated profit before tax
For the reasons stated above, restated profit before tax was Rs. 390.76 million in Fiscal 2025 compared to Rs. 243.12 million in Fiscal 2024.
Total tax expense
Total tax expense decreased from Rs. 72.77 million in Fiscal 2024 to Rs. 62.80 million in Fiscal 2025. Current tax expense increased from Rs. 12.46 million in Fiscal 2024 to Rs. 77.43 million in Fiscal 2025 commensurate with the increase in our operations and deferred tax expense decreased from Rs. 60.31 million in Fiscal 2024 to Rs.(14.63) million in Fiscal 2025.
Restated profit for the year
For the reasons stated above, profit for the year increased to Rs. 327.96 million in Fiscal 2025 compared to Rs. 170.35 million in Fiscal 2024.
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity requirements primarily relate to capital expenditure and working capital. Our sources of liquidity for Fiscal 2026, 2025 and 2024 were cash generated from operating activities and borrowings from banks and financial institutions. We expect that our primary sources of liquidity will continue to be cash generated from operating activities and borrowings.
CASH FLOWS
The following table sets forth certain information relating to our cash flows in the periods indicated:
Particulars |
Fiscal | ||
| 2026 | 2025 | 2024 | |
| (Rs. million) | |||
Net cash generated from operating activities |
1,440.42 | 483.43 | 1,319.66 |
Net cash inflow from / (used in) investing activities |
(693.86) | (1,352.31) | (769.27) |
Net cash inflow from / (used in) financing activities |
(617.98) | 536.91 | (203.63) |
Net increase/(decrease) in cash and cash equivalents |
128.58 | (331.97) | 346.76 |
Total cash and cash equivalent |
223.92 | 94.48 | 422.61 |
Operating Activities Fiscal 2026
Net cash flows generated from operating activities was Rs. 1,440.42 million in Fiscal 2026. Restated profit before tax was Rs. 610.04 million. Adjustments primarily included depreciation and amortization of Rs. 459.40 million; finance costs of Rs. 338.41 million, other borrowing cost of Rs. 69.97 million; provision/sundry balances written back of Rs. (1.91) million; unrealized foreign exchange loss of Rs. (156.21) million; employee stock option of Rs. 105.03 million; and interest income of Rs. (39.94) million. Operating profit before working capital changes were Rs.1,378,82 million. Working capital adjustments included increase in trade receivables of Rs. 454.46 million; increase in inventories of Rs. 172.56 million; increase in other financial assets of Rs. 6.75 million; increase in other assets of Rs. 246.08 million; increase in trade payable of Rs. 29.81 million; increase in other financial liabilities of Rs. 957.03 million; and increase in other liabilities of Rs. 31.68 million. Cash generated from operations were Rs. 1,579.71 million for Fiscal 2026. Income tax paid (net) was Rs. 139.29 million.
Fiscal 2025
Net cash flows generated from operating activities was Rs. 483.43 million in Fiscal 2025. Restated profit before tax was Rs. 390.76 million. Adjustments primarily included depreciation and amortization of Rs. 379.44 million; finance costs of Rs. 304.95 million, other borrowing cost of Rs. 64.89 million; provision/sundry balances written back of Rs. (20.03) million; unrealized foreign exchange loss of Rs. (13.27) million; employee stock option of Rs. 148.17 million; and interest income of Rs. (47.43) million. Operating profit before working capital changes were Rs. 1,200.83 million. Working capital adjustments included increase in trade receivables of Rs. 60.53 million; increase in inventories of Rs. 113.59 million; increase in other financial assets of Rs. 105.56 million; decrease in other assets of Rs. 46.39 million; increase in trade payable of Rs. 28.54 million; decrease in other financial liabilities of Rs. 376.04 million; and decrease in other liabilities of Rs. 65.54 million. Cash generated from operations were Rs. 595.78 million for Fiscal 2025. Income tax paid (net) was Rs. 112.35 million.
Fiscal 2024
Net cash inflow from operating activities was Rs. 1319.66 million in Fiscal 2024. Restated profit before tax was Rs. 243.12 million. Adjustments primarily included depreciation and amortization of Rs. 285.51 million; finance costs of Rs. 230.01 million, other borrowing cost of Rs. 104.12 million; provision/sundry balances written back of Rs. (30.01) million; unrealized foreign exchange loss of Rs. 8.51 million; employee stock option of Rs. 394.62 million; and interest income of Rs. (96.76) million. Operating profit before working capital changes were Rs. 1,072.87 million. Working capital adjustments included decrease in trade receivables of Rs. 555.53 million; decrease in inventories of Rs. 158.95 million; decrease in other financial assets of Rs. 193.43 million; and an increase in other assets of Rs. 234.56 million; decrease in trade payable of Rs. 92.61 million; decrease in other financial liabilities of Rs. 304.96 million; and increase in other liabilities of Rs. 67.58 million. Cash generated from operations were Rs. 1,413.08 million for Fiscal 2024. Income tax paid (net) was Rs. 93.42 million.
Investing Activities
Fiscal 2026
Net cash used in investing activities was Rs. (693.86) million in Fiscal 2026, primarily on account of purchase of property, plant and equipment (including capital work-in-progress, capital advances and capital creditors) of Rs. (758.39) million; purchase of intangible assets and intangible assets under development of Rs. (164.12) million; proceeds from sale of property, plant and equipment of L2.30 million; sale of mutual fund of Rs. 0.01 million, loan given of Rs. (1.95) million; interest received of Rs. 45.19 million and investment in bank deposits (having original maturity of more than three months) of Rs. 183.10 million.
Fiscal 2025
Net cash used in investing activities was Rs. (1,352.31) million in Fiscal 2025, primarily on account of purchase of property, plant and equipment (including capital work-in-progress, capital advances and capital creditors) of Rs. (1,312.58) million, purchase of intangible assets and intangible assets under development of Rs. (211.39) million; sale of mutual fund of Rs. 50.07 million, loan given of Rs. (5.64) million; interest received of Rs. 61.89 million and investment in bank deposits (having original maturity of more than three months) of Rs. 76.90 million.
Fiscal 2024
Net cash used in investing activities was Rs. (769.27) million in Fiscal 2024, primarily on account of purchase of property, plant and equipment (including capital work-in-progress, capital advances and capital creditors) of Rs. (1,126.71) million, purchase of intangible assets and intangible assets under development of Rs. (201.66) million; sale of mutual fund of Rs. 94.99 million, loan given of Rs. (15.54) million; interest received of Rs. 85.44 million and investment in bank deposits (having original maturity of more than three months) of Rs. 395.52 million.
Financing Activities
Fiscal 2026
Net cash used in financing activities was Rs. (617.98) million in Fiscal 2026, primarily on account of proceeds from long term borrowings of Rs. 356.27 million; repayment of long-term borrowings of Rs. (478.40) million; proceeds from short term borrowings (net) of Rs. (12.68) million; other borrowing costs of Rs. (69.97) million; payment of principal portion of lease liabilities of Rs. (130.14) million; payment of interest portion of lease liabilities of Rs. (26.01) million and interest expenses paid of Rs. (312.90) million.
Fiscal 2025
Net cash used in financing activities was Rs. 536.91 million in Fiscal 2025, primarily on account of proceeds from long term borrowings (net) of Rs. 485.53 million; proceeds from short term borrowings (net) of Rs. 548.04 million; payment of interim dividend of Rs. (94.21) million; other borrowing costs of Rs. (64.89) million; payment of principal portion of lease liabilities of Rs. (68.58) million; payment of interest portion of lease liabilities of Rs. (19.02) million and interest expenses paid of Rs. (284.86)million.
Fiscal 2024
Net cash used in financing activities was Rs. (203.63)million in Fiscal 2024, primarily on account of proceeds from long term borrowings of Rs. 482.50 million; repayment of long-term borrowings of Rs. (225.31) million; proceeds from short term borrowings (net) of Rs. 82.32 million; payment of interim dividend of Rs. (93.57) million; other borrowing costs of Rs. (104.12) million; payment of principal portion of lease liabilities of Rs. (68.16) million; payment of interest portion of lease liabilities of Rs. (18.41) million and interest expenses paid of Rs. (255.95) million.
INDEBTEDNESS
As of March 31, 2026, our outstanding long-term debt was Rs. 987.69 million and short-term debt was Rs. 3,020.20 million while our debt-to- equity ratio was 0.83.
The following table sets forth certain information relating to our total debt as of March 31,2026, and our repayment obligations in the periods indicated:
Particulars |
As of March 31, 2026 |
||
| Payment due by period | |||
| (Rs. million) | |||
| 2026-27 | 2027-28 | Beyond 2028-29 | |
Term loan from banks repayable in quarterly instalments |
540.34 | 501.38 | 344.20 |
External commercial borrowings |
83.69 | 83.69 | - |
Loan from others (Director of Subsidiary, Company) |
12.55 | - | - |
CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS
As of March 31, 2026, contingent liabilities that have not been accounted for in our Restated Consolidated Financial Information are as follows:
| (Rs. million) | |
Particulars |
As at March 31, 2026 |
| (Rs. million) | |
Sales tax demand |
- |
Legal cases of labour pending before labour court |
9.89 |
H M Customs and excise duty deferment bond |
- |
Claims against the Company not acknowledged as debt |
2.33 |
Bank guarantee |
21.08 |
Direct Taxation - Income tax |
1.63 |
i) Several Legal Cases of labour pending at labour Court, Civil Court and High Court. The Parent Company has assessed and believe that none of these cases, either individually or in aggregate, are expected to have any material adverse effect on its consolidated financial statements.
ii) Sadhu Forging Limited has filed a suit claiming Rs.3.93 million towards alleged outstanding payment for supplied material. Hero Motors Limited has contested the claim on the grounds that the material supplied was defective, rejected, and corresponding debit notes were raised Vide order dated 28.01.2026, the Faridabad Court held that it lacks territorial jurisdiction and directed return of the plaint for presentation before the competent Delhi Court. While the Faridabad proceedings have concluded the matter may be refiled in Delhi, where the outcome remains uncertain due to both factual and legal issues involved.
iii) A claim of Rs.2.33 million has been raised by M/s Hari Om Enterprises in relation to alleged outstanding amounts for maintenance and cleaning services provided to the Parent Company. The matter was initially referred to the Pre-Litigation Mediation and Conciliation Centre, which issued a non-starter report. Subsequently, the claimant has issued a notice under Section 21 of the Arbitration and Conciliation Act for invocation of arbitration, to which the Company is in the process of responding.
iv) The Parent Company has received an assessment order for Assessment Year 2023-24from the Income Tax Department involving a transfer pricing adjustment under Section 92CA of the Income-tax Act, 1961 amounting to Rs.5.46 million. Pursuant to the adjustment, a tax demand of Rs.1.63 mill-ion has been raised. The Company has deposited L33 million (being 20% of the demand) and has filed an appeal before the Commissioner of Income Tax (Appeals) against the assessment order dated 17 March 2026.
For further information see "Restated Consolidated Financial Information - Note 43 - Contingent Liabilities" on page 415.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The following table sets forth certain information relating to our commitments:
Particulars |
As at March 31, 2026 |
| (Rs. million) | |
Capital commitment: Estimated amount of contracts remaining to be executed on the capital account (net of related capital advances) |
244.21 |
CAPITAL EXPENDITURES
In Fiscal 2026, 2025 and 2024, our capital expenditure towards additions to property, plant and equipment, capital work in progress, other intangible assets and intangible assets under development was Rs. 922.51 million, Rs. 1,523.97 million and Rs. 1,328.37 million, respectively.
The following table sets forth our non-current assets as of the dates indicated:
As at March 31. |
|||
| 2026 | 2025 | 2024 | |
| (Rs. million) | |||
Property, plant and equipment |
5,273.09 | 4,953.70 | 3,603.06 |
Right of Use Assets |
826.70 | 298.60 | 354.75 |
Capital work in progress |
666.49 | 380.99 | 596.03 |
Goodwill |
79.73 | 79.73 | 79.73 |
Other intangible assets |
260.74 | 145.33 | 52.52 |
Intangible assets under development |
283.26 | 286.35 | 180.06 |
Financial assets |
|||
(i) Investments |
30.02 | 30.02 | 15.62 |
(ii) Loans |
17.00 | 13.63 | 13.11 |
(iii) Other financial assets |
49.05 | 49.76 | 73.91 |
Deferred tax asset (net) |
55.92 | 21.44 | 4.17 |
Non-current tax assets (net) |
50.32 | 125.39 | 90.46 |
Other non-current assets |
66.93 | 105.83 | 174.17 |
Total |
7,659.25 | 6,490.77 | 5,237.59 |
RELATED PARTY TRANSACTIONS
We enter into various transactions with related parties in the ordinary course of business. These transactions principally include managerial remuneration, retainers and consultants fees, directors sitting fees, rental income, loan from related party, interest expenses on loan taken, and repayment of loan and interest. For further information relating to our related party transactions, see "Restated Consolidated Financial Information - Note 44 - Related Parties Disclosures" on page 415.
AUDITORS OBSERVATIONS
There are no audit qualifications by our Statutory Auditors in our Restated Consolidated Financial Information.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our principal financial liabilities comprises of trade and other payables, borrowings, current maturity of borrowings, interest accrued and capital creditors. The main purpose of these financial liabilities is to finance our operations and to provide guarantees to support its operations. Our principal financial assets includes investment in mutual funds, loans to related parties, security deposits, trade receivables, cash and cash equivalents, deposits with bank, interest accrued in deposits, receivables from related and other parties and interest accrued thereon.
We have exposure to the following risks arising from financial instruments:
• credit risk,
• liquidity risk and
• market risk.
Our senior level management oversees the management of these risks and is supported by finance department that advises on the appropriate financial risk governance framework.
Credit Risk
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in finance loss to our Company. Credit risk arises from cash and cash equivalents, deposits with banks, trade receivables and other financial assets measured at amortised cost. We continuously monitor defaults by customers and other counterparties and incorporate this information into its credit risk control.
We also use expected credit loss model to assess the impairment loss in trade receivables and make an allowances for doubtful trade receivables using this model.
Liquidity Risk
Liquidity risk is the risk that we may not be able to meet our present and future cash and collateral obligations without incurring unacceptable losses. Our objective is to maintain optimum levels of liquidity to meet our cash and collateral requirements. We closely monitor our liquidity position and deploy a robust cash management system. We maintain adequate sources of financing including loans from banks at an optimised cost.
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: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our exposure to the risk of changes in market interest rates relates primarily to our long-term debt obligations with floating interest rates. We manage our net exposure to interest rate risk related to borrowings, by balancing a proportion of fixed rate and floating rate borrowing in our total borrowing portfolio.
Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. We are exposed to foreign currency risk on certain transactions that are denominated in a currency other than entitys functional currency, hence exposure to exchange rate fluctuations arises. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates.
UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS
Except as described in this Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
SIGNIFICANT ECONOMIC CHANGES THAT MATERIALLY AFFECT OR ARE LIKELY TO AFFECT INCOME
Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect our income identified above under "- Significant Factors Affecting our Results of Operations" and the section "Our Business" on pages 246 and 253, respectively.
KNOWN TRENDS OR UNCERTAINTIES
Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends identified above in " - Significant Factors Affecting our Results of Operations and Financial Condition" and the uncertainties described in "Risk Factors on pages 246 and 21, respectively. To our knowledge, except as discussed in this Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income.
FUTURE RELATIONSHIP BETWEEN COST AND INCOME
Other than as described in "Risk Factors", "Our Business" and "Managements Discussion and Analysis ofFinancial Condition and Results of Operations" on pages 21, 253 and 446, respectively, to our knowledge there are no known factors that may adversely affect our business prospects, results of operations and financial condition.
NEW PRODUCTS OR BUSINESS SEGMENTS
Except as set out in this Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new business segments other than in the normal course of business.
COMPETITIVE CONDITIONS
We operate in a competitive environment. See "Our Business", "Industry Overview" and "Risk Factors" on pages 253, 148 and 21, respectively, for further information on competitive conditions that we face across our various business segments.
EXTENT TO WHICH MATERIAL INCREASES IN NET SALES OR REVENUE ARE DUE TO INCREASED SALES VOLUME, INTRODUCTION OF NEW PRODUCTS OR SERVICES OR INCREASED SALES PRICES
Changes in revenue in the last three Fiscals are as described in "- Fiscal 2026 compared to Fiscal 2025", and "- Fiscal 2025 compared to Fiscal 2024" above on pages 470 and 472, respectively.
SEGMENT REPORTING
Our primary reporting has been performed on the basis of business segment. We are organised into key business segments - Power Train & Alloy & Metallics. Segments have been identified and reported based on the nature of the products, the risks and returns, the organisation structure and the internal financial reporting systems.
For further information, see "Restated Consolidated Financial Information - Note 48. Segment Reporting"" on page 426. SIGNIFICANT DEPENDENCE ON SINGLE OR FEW CUSTOMERS
We derive a significant portion of our revenue from our top 10 customers. The following table sets forth revenue from our top one, top five and top 10 customers for the periods indicated below:
Segment |
Fiscal 2026 |
Fiscal 2025 |
Fiscal 2026 |
|||
| Revenue from Customers (Rs. million) | Percentage of Revenue from Operations (%) | Revenue from Customers (Rs. million) | Percentage of Revenue from Operations (%) | Revenue from Customers (Rs. million) | Percentage of Revenue from Operations (%) | |
Largest Customer |
4,227.44 | 35.57% | 4,227.91 | 38.80% | 4,045.88 | 38.01% |
Top Five Customers |
7,298.89 | 61.42% | 6,907.10 | 63.39% | 6,933.56 | 65.14% |
Top 10 Customers |
8,661.40 | 72.89% | 8,501.96 | 78.03% | 8,191.86 | 76.96% |
Notes:
(1) Our top one customer, top five customers and top 10 customers are based on the revenue contribution of the relevant customer in the relevant Fiscals, as the case maybe.
(2) For Fiscal 2026, our top 10 customers include River Mobility Private Limited, Hero MotoCorp Limited, BMW-AG, HMC E Valley, enviolo, Makino Auto Industries Private Limited and Ducati. Certain customers have not been disclosed here due to non-receipt of consent. Further, contribution ofeach individual customer to the revenue from operations of our Company has not been separately disclosed to preserve confidentiality.
(3) For Fiscal 2025, our top 10 customers include Hero MotoCorp Limited, BMW-AG, enviolo, HWA AG, Makino Auto Industries Private Limited and Ducati Certain customers have not been disclosed here due to non-receipt of consent. Further, contribution of each individual customer to the revenue from operations of our Company has not been separately disclosed to preserve confidentiality.
(4) For Fiscal 2024, our top 10 customers include Hero MotoCorp Limited, BMW-AG, enviolo, HWA AG, Makino Auto Industries Private Limited and Ducati. Certain customers have not been disclosed here due to non-receipt of consent. Further, contribution of each individual customer to the revenue from operations of our Company has not been separately disclosed to preserve confidentiality.
For further information, see "Risk Factors - Our business largely depends upon our top 10 customers. In Fiscal 2026, 2025 and 2024 our revenue from operations from top 10 customers was f 8,661.40 million, f 8,501.96 million and f 8,191.86 million, representing 72.89%, 78.03% and 76.96%, of our revenue from operations, respectively. The loss of any of these customers could have a material adverse effect on our business, financial condition, results of operations and cash flows. " on page 24.
SEASONALITY/ CYCLICALITY OF BUSINESS
While our business is not seasonal, however, our business prospects and future financial performance depend on the demand of our automotive and non-automotive products in India as well as globally. For further information, see "Risk Factor - While our business is not seasonal, however, our business prospects and future financial performance depend on the demand for our products. Any decrease in demand for such products could adversely affect our business, results of operations and cash flows." on page 39.
SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO MARCH 31, 2026
No circumstances have arisen since the date of the last financial statements as disclosed in this Red Herring Prospectus which materially or 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 12 months.
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