Concall AI

ASK Automotive Limited — Q2 FY26 earnings call

Call held 31 Oct 2025

Management summary

ASK Automotive reported its highest ever absolute revenue, EBITDA, and PAT in Q2 FY26, with consolidated revenue growing 8.5% and EBITDA expanding 19.5% YoY. Margin improvement was driven by scale and capacity utilization, despite a 30 bps impact from rising aluminum prices. The company is optimistic about future growth, supported by GST reforms and ongoing capacity expansions, including new solar power plants and progress in alloy wheel collaborations.

Highlights

Consolidated revenue grew 8.5% YoY in Q2 FY26, marking the highest ever absolute revenue.
EBITDA grew 19.5% YoY in Q2 FY26, achieving a record absolute high.
PAT grew 18.6% YoY in Q2 FY26, also a record absolute high.
EBITDA margin expanded by 124 bps to 13.4% in Q2 FY26, driven by economies of scale and higher capacity utilization.
The company outperformed the two-wheeler industry's production growth in Q2 FY26.
A 9.9 MWp solar plant at Sirsa, Haryana, started supplies in April '25, with an additional 11.55 MW plant planned for Rajasthan by Q1 FY27.

Concerns

Exports revenue declined to Rs. 63 crore in H1 FY26 from Rs. 74 crore in the prior year period, attributed to geopolitical situations.
Aluminum alloy price increases impacted the Q2 FY26 EBITDA margin by 30 bps, though absolute EBITDA remained unaffected.
Cash flow generation in H1 FY26 was impacted by an increase in inventory, built up in anticipation of the festive season and GST 2.0 transition.

Key financials

2 periods

Q2 FY26

Consolidated Revenue Growth
8.5%
YoY +8.5%
Revenue Growth ex-Wheel Assembly
16.6%
YoY +16.6%
EBITDA Growth
19.5%
YoY +19.5%
PAT Growth
18.6%
YoY +18.6%
EBITDA Margin
13.4%
EPS
₹4.05
YoY +18.8%

H1 FY26

Consolidated Revenue Growth
6.1%
YoY +6.1%
Revenue Growth ex-Wheel Assembly
14%
YoY +14%
EBITDA Growth
19.4%
YoY +19.4%
PAT Growth
17.5%
YoY +17.5%
EBITDA Margin
13.6%
EPS
₹7.4
YoY +17.5%

What they filed

Q1 FY27: revenue up 35.8%, net profit up 13.0% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	884	814	735	727	827 −6%	860 +6%	891 +21%	987 +36%
Expenses	796	734	664	646	749	771	805	895
EBITDA	88	79	72	81	78 −11%	89 +13%	87 +21%	91 +12%
Margin	10%	10%	10%	11%	9%	10%	10%	9%
Other income	8	11	9	10	12	12	14	12
Interest	3	3	3	2	4	4	4	6
Depreciation	14	15	15	15	15	15	15	15
Profit before tax	78	73	63	73	72 −8%	82 +12%	82 +30%	83 +14%
Tax rate	25%	26%	26%	26%	26%	26%	26%	26%
Net profit	58	54	47	54	53 −9%	61 +13%	61 +30%	61 +13%
EPS	2.94	2.75	2.37	2.76	2.71	3.08	3.10	3.12

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Segment	Revenue Growth (Q2 FY26)	Revenue Growth (H1 FY26)
Advanced Braking System	10%	7%
Aluminum Light Weighting Precision Solutions	22%	19%
Safety Control Cable	2%	4%
Exports	—	—

Capital allocation

high confidence

Capex ₹450 Cr
- Karoli plant investment (this year) ₹250 Cr
- Bangalore plant investment (this year) ₹100 Cr
- Alloy wheel business investment (already done) ₹125 Cr
- Sunroof Cable JV investment ₹10 Cr
- Annual investment (optimistic outlook) ₹400 Cr
Our CAPEX in the last two years is mainly towards the plant and machinery and some part is in the building. This year we have a plan of around Rs. 450 crore of CAPEX in the complete total year, out of that, Rs. 370-odd crore already released and the rest will be in the second half. Next year will depend because now after doing this CAPEX, we are completely sorted for the growth of the next financial year. As per optimism, whatever the way the situation develops, we will be investing, normally we do invest around Rs. 400 crore every year because on an optimistic note. This year, we will be doing total investment of around Rs. 450 crore of in that, the Karoli plant will be doing about Rs. 250 crore and rest will be some maintenance expenses and Rs. 100 crore will be further doing in the Bangalore plant. Alloy wheel business already we have done the CAPEX and the machines will get delivered by February this financial year in the Q4.We will take out the product with the Japanese collaboration by around April or May and after testing, the supplies should start to the Japanese OEM. Just on the Sunroof Cable JV, so is the setup for the project on schedule like the Rs. 10 crore investment which you planned earlier?
M&A German JV (Sunroof Cable) Joint venture · Announced

Well, the JV potential, we will start working next month and we hope to come into production early in H2 of next financial year.
M&A Alloy Wheel Business (Japanese Collaboration) Joint venture · Pending regulatory

Alloy wheel business already we have done the CAPEX and the machines will get delivered by February this financial year in the Q4.We will take out the product with the Japanese collaboration by around April or May and after testing, the supplies should start to the Japanese OEM.
M&A Alloy Wheel Business (Taiwan Collaboration) Joint venture · Pending regulatory

Whereas the Taiwan collaboration is under testing with one of the OEMs, being a safety item, they are taking a little more time. All our parts are safety parts and the customers do take time to test it, so, as and when it comes, even that should start.

Guidance & targets

Revenue

Overall Revenue Growth Revenue · Medium confidence mid-teens

Overall growth in the revenues will be totally as per our guidelines. From the beginning, we have given the guideline of mid-teens and plus this aluminum price impact, that we still hold.

— Kuldip Singh Rathee
Alloy Wheel Business Revenue Potential Revenue · High confidence Rs. 250 crore

Yes. Already that CAPEX that we have done will ensure the revenues of Rs. 250 crore. Whenever the approval comes, we will let you know and I think we are geared up to supply up to Rs. 250 crore.

— Kuldip Singh Rathee
Exports Revenue Revenue · FY26 · Medium confidence cross last year's number

however we do feel that we will cross last year's number.

— Kuldip Singh Rathee

Profitability

EBITDA Margin (without aluminum price impact) Profitability · High confidence 13.7%

But for the significant increase in aluminum alloy prices during the quarter, our EBITDA margin would have been 13.7%.

— Kuldip Singh Rathee
EBITDA Margin Profitability · High confidence maintain present margins

Nitin, we are doing pretty well and we do hope to maintain the present margins.

— Kuldip Singh Rathee

Capacity

Bangalore Plant Capacity Utilization Capacity · Q4 FY26 · High confidence 70%-75%

We have mentioned that in Q2, utilization reached 60% in the Bangalore facility, which we opened on 14th January and in Q4, we are very confident that it will reach 70%-75% capacity utilization.

— Kuldip Singh Rathee
Karoli Plant Capacity Utilization Capacity · Medium confidence 60%-70%

As far as the Karoli plant is concerned, since there is more and more investment going on there, we cannot go by the percentages, but yes, we will probably remain anywhere between 60%-70% capacity utilization.

— Kuldip Singh Rathee

Volume

Two-Wheeler Industry Growth Volume · FY26 · High confidence 7%

Previously 5.8% → 7%

The whole industry is quite bullish this year, so we expect that growth, which has been 5.8% so far overall in the years, maybe it touches 7%.

— Kuldip Singh Rathee
Two-Wheeler Industry Growth Continuity Volume · this year and next year · Medium confidence likely to continue

Well, I can't explain that much, but yes this year and next year, it is likely to continue.

— Kuldip Singh Rathee

Other

Asset Turnover Other · High confidence around 1.75

It will certainly continue like that.

— Kuldip Singh Rathee

New Products

German JV Production Start New Products · H2 FY27 · High confidence early in H2 of next financial year

Well, the JV potential, we will start working next month and we hope to come into production early in H2 of next financial year.

— Kuldip Singh Rathee
Sunroof Cable JV Production Start New Products · H2 FY27 · High confidence in 9 months and in H2 of next financial year

We told you that the Sunroof joint venture will be putting into production in 9 months and in H2 of next financial year, some breakthroughs should come in revenue.

— Kuldip Singh Rathee
New Product Launches New Products · next financial year · Medium confidence next financial year

It will come next financial year because this year, the business plan we are through, what we have projected and given, I think we will be achieving it confidently.

— Kuldip Singh Rathee

What to watch in Q3 FY26

Bangalore Plant Capacity Utilization

Q4 FY26

Current 60% in Q2 FY26

Target 70%-75%

Why it matters

Increased utilization at the new Bangalore facility is key for margin improvement and overall growth.

We have mentioned that in Q2, utilization reached 60% in the Bangalore facility, which we opened on 14th January and in Q4, we are very confident that it will reach 70%-75% capacity utilization.

Risks & concerns

Geopolitical situation affecting exports
medium

Geopolitical issues, particularly related to rare earths and magnets, impacted H1 FY26 export revenue, which declined to Rs. 63 crore from Rs. 74 crore.

Management acknowledged
Aluminum alloy price volatility
medium

A significant increase in aluminum alloy prices impacted Q2 FY26 EBITDA margin by 30 bps, though absolute EBITDA remained stable.

Management acknowledged
Uncertainty regarding ABS mandate implementation
low

Management stated there is a lot of uncertainty regarding the mandatory ABS anti-lock braking systems implementation date (Jan 1, 2026) and will clarify once official notification is received.

Management not addressed

Q&A highlights

4 direct, 1 evasive

Impact of Aluminum Price Increase on Margins and Revenue Direct

Yes, you have very rightly pointed out that if the EBITDA margin percentage gets affected by 30 basis point, even the revenue also goes up by about 2.5% to 3%, that is a very correct observation of yours because of the aluminum price increase.

Clarified the direct financial impact of commodity price fluctuations on both margins and reported revenue.

Asked by Rishi Kapadia

Uncertainty Regarding Mandatory ABS Anti-lock Braking Systems Evasive

Not to our knowledge. And I think this question was asked to the one of the reputed OEMs also, even they could not answer to that. There is a lot of uncertainty. Let the notification come, then only we can clarify.

Highlighted significant regulatory uncertainty that could impact future product mandates and market dynamics.

Asked by Nitin

CAPEX Breakdown and Future Investment Plans Direct

This year we have a plan of around Rs. 450 crore of CAPEX in the complete total year, out of that, Rs. 370-odd crore already released and the rest will be in the second half. Next year will depend because now after doing this CAPEX, we are completely sorted for the growth of the next financial year. As per optimism, whatever the way the situation develops, we will be investing, normally we do invest around Rs. 400 crore every year because on an optimistic note.

Provided clear figures for current and future capital expenditure, indicating capacity expansion and growth strategy.

Asked by Yash Agarwal

Alloy Wheel Business Progress and Revenue Potential Partial

There are two collaborations we are having. In the first collaboration with Taiwan, the product we have already taken out last September, it is under testing for more than around one year. As I said, all of our parts are safety items, so we know it takes a lot of time and we are never in a hurry. The customer has to be fully sure to grant clearance for that, so once the clearance comes, we will start supplies from that collaboration. The second collaboration is from Japan, which is for a particular Japanese customer. This, as I said, the machines will come and installed in Q4 completely. In the Q1, we will be taking out the samples and giving to the Japanese customers. Whatever time they take on the testing and approvals, after that the supplies will start. The moment the approvals come, we will be able to give you the guidelines, otherwise, before that, to give the financial guidelines will be a little premature. Yes. Already that CAPEX that we have done will ensure the revenues of Rs. 250 crore.

Detailed the status of key alloy wheel collaborations and quantified the potential revenue from existing CAPEX, while also highlighting delays due to testing.

Asked by Raghunandan

Capacity Utilization and Margin Parity at New Plants (Bangalore & Karoli) Direct

We have mentioned that in Q2, utilization reached 60% in the Bangalore facility, which we opened on 14th January and in Q4, we are very confident that it will reach 70%-75% capacity utilization. As far as the Karoli plant is concerned, since there is more and more investment going on there, we cannot go by the percentages, but yes, we will probably remain anywhere between 60%-70% capacity utilization. They have already matched the blended level.

Provided specific utilization targets for new facilities and confirmed that their margins are already in line with the blended company average.

Asked by Raghunandan

Export Outlook for FY26 and FY27 Partial

Export front, we were very bullish. We were trying hard on that, but suddenly this geopolitical situation changed, and that has really affected this particular year, otherwise we were very bullish even on this financial year. As per the news, if this rare earth and magnet issue gets resolved, I think the Q4 should be, again, normal. That is why we still believe that we will cross the last year's number, in spite of all the odds against us.

Acknowledged the negative impact of geopolitical events on exports but maintained optimism for recovery by year-end.

Asked by Rishi Kapadia

Cash Flow Generation from Operations in H1 FY26 Direct

Yes, this is mainly due to 2-3 things. One is the inventory increase because this time, festival season. We were expecting very good festival season and GST 2.0 impact, we invented some inventory, so working capital is impacted.

Explained the reasons behind reduced cash flow generation, linking it to strategic inventory build-up for market opportunities.

Asked by Naveen Kumar Dubey

German JV Production Timeline and Potential Partial

Well, the JV potential, we will start working next month and we hope to come into production early in H2 of next financial year. Sir, let it come first. I think we will let you know. There will be many more calls before that.

Provided a timeline for the German JV to commence production but deferred specific financial projections until further progress.

Asked by Vijay Pandey

3 min read 7 chapters

Detailed narrative

Strong Q2 & H1 FY26 Financial Performance

ASK Automotive delivered robust financial results for Q2 and H1 FY26. In Q2 FY26, consolidated revenue grew by 8.5% YoY, excluding wheel assembly business, revenue growth was 16.6%. EBITDA saw a 19.5% YoY increase, and PAT grew by 18.6% YoY, marking the highest ever absolute figures for any quarter. The EBITDA margin for Q2 FY26 stood at 13.4%, an improvement of 124 basis points over Q2 FY25. For H1 FY26, consolidated revenue grew 6.1% YoY, EBITDA by 19.4%, and PAT by 17.5%, with an EBITDA margin of 13.6%.

Positive Industry Outlook and GST 2.0 Impact

The Indian automobile sector showed healthy momentum, with overall vehicle production growing 5.8% in H1 FY26, and the two-wheeler segment matching this growth. Management is optimistic for FY26, projecting the two-wheeler industry growth to touch 7%. The recent GST 2.0 reforms, reducing the rate from 28% to 18% for ASK's products, are expected to significantly boost the aftermarket segment and help gain market share from the grey market, contributing to overall revenue growth.

Strategic Capacity Expansion and Utilization

The company is actively expanding its capacity, with a total CAPEX plan of Rs. 450 crore for FY26, of which Rs. 250 crore has been spent in H1. This includes Rs. 250 crore for the Karoli plant and Rs. 100 crore for the Bangalore plant this year. The Bangalore facility, opened in January, reached 60% utilization in Q2 and is expected to hit 70-75% by Q4 FY26. Karoli plant utilization is projected to be 60-70%. Management plans to invest around Rs. 400 crore annually in CAPEX going forward.

Alloy Wheel Business and New Product Development

ASK Automotive is progressing with its alloy wheel business through two collaborations. Machines for the Japanese collaboration are expected by February (Q4 FY26), with product rollout by April/May and supplies commencing after testing. The Taiwan collaboration product has been under testing for over a year due to its safety-critical nature. The CAPEX already invested in the alloy wheel business is expected to generate a revenue potential of Rs. 250 crore. New products are anticipated to launch in the next financial year.

Green Energy Initiatives

The company is committed to green energy, with its 9.9 MWp solar plant at Sirsa, Haryana, commencing supplies in April '25. Building on this success, ASK Automotive is installing another 11.55 Megawatt captive solar power plant in Rajasthan, which is expected to be operational by Q1 FY27. These initiatives aim to achieve sustainable operational economies and reduce environmental impact.

Export Performance and Geopolitical Headwinds

Export revenue for H1 FY26 stood at Rs. 63 crore, a decline from Rs. 74 crore in the same period last year. This reduction is primarily attributed to the unstable global geopolitical environment, particularly issues related to rare earths and magnets. Despite the current challenges, management remains optimistic, expecting to cross last year's export numbers by the end of FY26, assuming a resolution to the geopolitical situation by Q4.

Aluminum Price Impact on Margins

The significant increase in aluminum alloy prices during Q2 FY26 had a noticeable impact on the company's profitability. Management stated that the rising aluminum prices affected the EBITDA margin by 30 basis points, meaning the margin would have been 13.7% without this commodity headwind. However, it was clarified that the absolute EBITDA numbers remained unaffected, and the company aims to maintain its current margin levels.

This is an AI-generated summary of a publicly available earnings call transcript.

View original transcript