ASK Automotive Limited — Q4 FY25 earnings call

Call held 14 May 2025

Management summary

ASK Automotive delivered a strong Q4 and FY25, exceeding margin guidance with robust revenue and profit growth. The company saw significant improvements in its financial health, including a credit rating upgrade and reduced debt. Strategic partnerships and manufacturing expansions are underway, though a shift in the low-margin wheel assembly business will impact FY26 revenue but improve overall margins. The company remains optimistic about the Two-Wheeler and EV market outlook.

Highlights

  • Q4 FY25 Revenue grew 8.5% YoY, with EBITDA up 24.7% and PAT up 20.6%.

  • Q4 FY25 EBITDA margin expanded 162 bps to 12.5%.

  • FY25 Revenue grew 20.2% YoY, with EBITDA up 42.7% and PAT up 42.5%.

  • FY25 EBITDA margin reached 12.3%, an improvement of 193 bps YoY, surpassing guidance.

  • CRISIL Ratings upgraded long-term credit rating from "AA-" to "AA".

  • Debt to equity improved to 0.38x in FY25 from 0.42x last year, and ROCE improved from 23.64% to 27.5%.

  • Declared a dividend of 75% (Rs. 1.5 per equity share).

Concerns

  • Shift of 60% of the low-margin wheel assembly business from Q4 FY25 will impact FY26 revenues by approximately Rs. 300 crore.

  • Exports remained stagnant at Rs. 147 crore in FY25 compared to Rs. 174 crore last year, attributed to the dynamic and unstable global geopolitical environment.

  • The EV market still constitutes less than 5% of the total Two-Wheeler industry, with price cap issues potentially hindering faster growth.

Key financials

2 periods

Q4 FY25

  • Revenue Growth
    8.5%
    YoY +8.5%
  • EBITDA Growth
    24.7%
    YoY +24.7%
  • PAT Growth
    20.6%
    YoY +20.6%
  • EBITDA Margin
    12.5%

FY25

  • Revenue Growth
    20.2%
    YoY +20.2%
  • EBITDA Growth
    42.7%
    YoY +42.7%
  • PAT Growth
    42.5%
    YoY +42.5%
  • EBITDA Margin
    12.3%
  • EPS
    ₹12.6
  • ROACE
    27.7%
  • ROAE
    26.5%
  • ROCE
    27.5%

What they filed

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

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue884 814 735 727 827 −6%860 +6%891 +21%987 +36%
EBITDA88 79 72 81 78 −11%89 +13%87 +21%91 +12%
Net profit58 54 47 54 53 −9%61 +13%61 +30%61 +13%
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

SegmentRevenue Growth (Q4 FY25)Revenue Growth (FY25)
Advanced Braking system9%16%
Aluminum Lightweighting Precision Solutions21%28%
Safety Control Cable1%14%

Capital allocation

high confidence
  • Capex ₹450 Cr
    • Karoli plant expansion ₹200 Cr
    • Bangalore plant expansion ₹100 Cr
    • Alloy wheel plant for Japanese collaboration ₹150 Cr
    I am delighted to share with you that we had a strong finish to the fourth quarter and full year in both revenue and profitability. This marks our sixth consecutive quarter of robust performance since the company's listing last year. During Q4 FY25, we delivered a growth of 8.5% in revenue, 24.7% in EBITDA and 20.6% in PAT on year-on-year basis. We continued to outperform the Two-Wheeler industry in terms of vehicle production growth during Q4 FY25. Additionally, we delivered an EBITDA margin of 12.5% in Q4 FY25, representing an improvement of 162 basis points over Q4 FY24. As a result of strong performance in Q4 FY25, we have surpassed our FY25 EBITDA margin guidance by achieving a full year EBITDA margin of 12.3%. Our revenue has grown by 20.2%, EBITDA by 42.7% and PAT by 42.5% in FY25 on year-on-year basis. Our EBITDA margins for the year stood at 12.3% in FY25 with an improvement of 193 basis points on year-on-year basis. Our aim is not only to sustain this level of EBITDA margins, but to improve gradually in the subsequent quarters, depending upon the growth of the Two-Wheeler industry in FY26. This strong performance on profitability, our earnings per share in FY25 has increased to Rs. 12.6 per share against Rs. 8.8 per share in the same period last year. Our all three product segments performed well in FY25 in terms of revenue growth. We have sustained our market leadership position in the Advanced Braking system. Our Advanced Braking system revenue grew by 9% in Q4 and 16% in FY25 on year-on-year basis. The Aluminum Lightweighting Precision Solutions revenue grew by 21% in Q4 and 28% in FY25 on a year-on-year basis. The Safety Control Cable revenue also recorded growth of 1% in Q4 and 14% in FY25 on year-on-year basis. As mentioned in DRHP, our Wheel Assembly business has very low margin and we were requesting the customer for the last two years to shift this business to someone else. Now the customer has shifted 60% business from Q4 FY25. In FY26 it will impact our revenues by approximately Rs. 300 crore. However, our EBITDA margins will improve by 80 basis points on account of this. In the dynamic and unstable global geopolitical environment, our revenue from exports remained the same at Rs. 147 crore against Rs. 174 crore last year also. As expressed in the previous interactions, I am delighted to share that we have achieved double digit margins at 12.5% in Q4 and 12.3% in FY25 compared to 10.3% in last year. Improvement in margins during FY25 were mainly driven by better economies of scale, improved volumes, better product mix to the customers and continued focus on cost optimization. We have delivered strong returns in FY25 with ROACE at 27.7% and ROAE at 26.5%. We have also improved our debt profile with debt to equity reducing to 0.38x against 0.42x last year. Our average debt to EBITDA is at 0.83x in FY25. The Board has recommended a dividend of 75%, i.e. Rs. 1.5 per equity share on the face value of Rs. 2 each. I would now like to give you updates that our Bangalore facility started commercial production on 14th January 2025, and ramping up fast. This will be our eighth manufacturing facility and the third one in South India. Our largest manufacturing facility at Karoli, Rajasthan, with an investment of Rs. 4.9 billion as on 31st March, 2025, is ramping up fast to deliver future growth. Some more key new initiatives to be highlighted are, we signed Technical Collaboration Agreement with LIOHO, Taiwan, to manufacture Two-Wheeler HPDC alloy wheels in February 24. The capacity is already built up and the product is under testing. We entered into a strategic partnership with Kyushu Yanagawa Seiki Co. Ltd., Japan, in March'25 for high pressure die casted alloy wheels for Two-Wheelers. We also signed a joint venture agreement with AISIN Group, Japan, a top 10 global Tier 1 auto component supplier to market and sell passenger car products in independent after market in April'24. Product range unveiled at Bharat Mobility Global Expo 2025, the products have been launched in market in April 2025. Largest manufacturing plant at Karoli, Rajasthan, with investment of Rs. 4.9 billion up to 31st March 2025, is ramping up fast to deliver future growth. Bangalore facilities started commercial production 14th January 2025 and ramping up fast. These initiatives underscore ASK Automotive's commitment to innovation, sustainability and market leadership. Thank you very much for your patient hearing. With this we leave the floor open for question-and-answers. Thank you. Yes, this is entire. That's what we propose to do. As I said that we will be making additional capacities. And out of that the bigger amount of about Rs. 150 crore to Rs. 200 crore will be for this alloy wheel plant for the Japanese collaboration, of which we will see the results in the next financial year.
  • Debt 0.8× EBITDA
    We have also improved our debt profile with debt to equity reducing to 0.38x against 0.42x last year. Our average debt to EBITDA is at 0.83x in FY25.
  • Dividend ₹1.5/share (final)
    The Board has recommended a dividend of 75%, i.e. Rs. 1.5 per equity share on the face value of Rs. 2 each.

Guidance & targets

EBITDA Margin

  • EBITDA Margin EBITDA Margin · FY26 · High confidence 14%
    However, we are aiming to achieve 14% EBITDA margins in this coming financial year.

    — Kuldip Singh Rathee

  • EBITDA Margin Improvement EBITDA Margin · FY26 · High confidence 150 bps
    I said that we will be improving by 150 basis points, so that becomes 13.8%. And I said out of this 150 basis points, 80 basis points will come because the wheel assembly has gone, and 70 basis points will come for the internal more efficiencies and economies of scale.

    — Kuldip Singh Rathee

Revenue Growth

  • Overall Revenue Growth Revenue Growth · FY26 · Medium confidence mid-teens
    I can only assure you that we will be growing in the mid-teens and we will outperform the market, outperform the industry again in this financial year because we have the confirmed orders to that extent.

    — Kuldip Singh Rathee

Two-Wheeler Industry Growth

  • Domestic Two-Wheeler Industry Growth Two-Wheeler Industry Growth · FY26 · High confidence 6-8%
    Well, as far as the Two-Wheeler industry is concerned, we are also very hopeful that it will grow about 6% to 8%, what Hero has said.

    — Kuldip Singh Rathee

Karoli Plant

  • Peak Revenue Potential Karoli Plant · Long term · High confidence Rs. 1,100-1,200 crore
    And the peak potential of the Karoli plant will be around Rs. 1,100 crore to Rs. 1,200 crore, which we will see in the times to come.

    — Kuldip Singh Rathee

Bangalore Plant

  • Revenue Potential Bangalore Plant · Long term · High confidence Rs. 400-500 crore
    So it will give us a revenue of approximately Rs. 400 crore to Rs. 500 crore or so.

    — Kuldip Singh Rathee

  • Capacity Utilization Bangalore Plant · End of Q4 FY26 · High confidence 60-70%
    And even this new plant in Bangalore, we expect by end of the last quarter of FY26 we should have a capacity utilization of 60% to 70%.

    — Kuldip Singh Rathee

Capex

  • Total Capex Capex · FY26 · High confidence Rs. 450 crore
    You mentioned that you are going to spend some Rs. 450 crore this year CAPEX spend, so is that entire amount we are going to be spending in FY26? Yes, this is entire. That's what we propose to do.

    — Kuldip Singh Rathee

ROCE

  • ROCE ROCE · Next year · High confidence close to 27.5%
    I may assure you that next year also we will be doing very well and we will be achieving an ROCE close to this with the debt to equity also further improving and the performance growing on a very sound footing.

    — Kuldip Singh Rathee

What to watch in Q1 FY26

HPDC alloy wheel product testing and approval

June/July end
Current Under advanced testing
Target Clearances received

Why it matters

Successful approval will enable supplies in H2 FY26, contributing to new revenue streams from strategic collaborations.

the alloy wheels with high pressure die casting that we made with the Taiwan technology is under an advanced stage of testing. And we hope to get the clearances by June or July end. And we are confident of starting the supplies in the H2 of this financial.

Risks & concerns

  • Revenue impact from wheel assembly business shift

    medium

    Customer shifted 60% of low-margin wheel assembly business from Q4 FY25, leading to an approximate Rs. 300 crore revenue reduction in FY26, though it will improve margins by 80 bps.

    Management acknowledged

  • Stagnant export revenue due to geopolitical environment

    medium

    Exports remained flat at Rs. 147 crore in FY25 compared to Rs. 174 crore last year, attributed to the dynamic and unstable global geopolitical environment, though management is optimistic for FY26.

    Management acknowledged

  • Small EV market size and potential price cap issues

    low

    The EV market constitutes less than 5% of the total Two-Wheeler industry, and price cap issues might hinder faster growth, but ASK Automotive is fully hedged by supplying to both ICE and EV segments.

    Management acknowledged

Q&A highlights

8 direct
Yanagawa tie-up potential and market for die-casted wheels Direct
Yanagawa is a Japanese company and already is supplying to the Japanese OEM suppliers with this technology. We have made this tie up to supply to some Japanese manufactures. The potential of it is of the scooter alloy wheels, which is around Rs. 2,000 crore market overall.

Provides insight into a new strategic partnership and the potential market size for the new product (HPDC alloy wheels).

Asked by Mahesh Atal

Impact of wheel assembly business shift on revenue and margins Direct
The wheel assembly business has gone from March only. So there's not much to be seen in the last Financial Year25. However, in the Financial Year26, as I just said, the revenue will drop by Rs. 300 crore. However, the margins will grow because of the wheel assembly by 80 basis points.

Clarifies a significant change in business mix, quantifying the revenue impact and the positive margin effect for FY26.

Asked by Naveen Dubey

Karoli plant capacity utilization and peak revenue potential Direct
The peak potential of the Karoli plant will be around Rs. 1,100 crore to Rs. 1,200 crore, which we will see in the times to come. At the moment, the Karoli plant, we have revenues of about Rs. 500 crore to Rs. 600 crore, and it's operating on 50% capacity utilization.

Provides clear metrics on the largest manufacturing facility's current status and future potential, indicating significant headroom for growth.

Asked by Abinash Swamenathan

Reason for two HPDC collaborations (LIOHO and Yanagawa) Direct
we have the first-mover advantage with that technology and we want to be the best in the class. That has been the philosophy of the company. So we will imbibe both the technologies. And the Japanese player will be feeding the Japanese Customer more, and the Taiwanese player will be feeding the rest of the market, that has been the philosophy behind it, number one.

Explains the strategic rationale behind multiple partnerships for similar technology, highlighting market segmentation and ambition.

Asked by Abinash Swamenathan

FY26 EBITDA margin guidance and drivers Direct
I said that we will be improving by 150 basis points, so that becomes 13.8%. And I said out of this 150 basis points, 80 basis points will come because the wheel assembly has gone, and 70 basis points will come for the internal more efficiencies and economies of scale. However, we are aiming to achieve 14% EBITDA margins in this coming financial year.

Provides detailed breakdown of margin improvement drivers and a clear target for FY26.

Asked by Bismit Nayak

Growth in cable business and debt reduction Direct
In cable we have grown 14% which is not less, mid-teens growth for the full year... our debt to equity has reduced from 0.42x to 0.38x. So, our financials have improved and our debt to EBITDA has also reduced which is about 0.8x.

Addresses concerns about a specific segment's growth and provides positive updates on the company's improving debt profile.

Asked by Mahesh Atal

Bangalore plant scaling and future investment Direct
in the till 31st March we have invested Rs. 155 crore in the Bangalore plant... And we will be investing Rs. 100 crore more this year. So that will be an investment of about Rs. 250 crore. So it will give us a revenue of approximately Rs. 400 crore to Rs. 500 crore or so.

Details the investment and revenue potential of a new key manufacturing facility.

Asked by Naveen Dubey

Future of EV scooter market and ASK's supply Direct
we are doing supply to EV scooters also... EV market still is less than 5% of the total Two-Wheeler market... We are also the same ratio we are supplying to the EV players, all EV players. So we are fully hedged whether the ICE grows or the EV grows, we are supplying to everyone.

Clarifies the company's position and strategy regarding the EV market, indicating a hedged approach.

Asked by Ashok Shah

3 min read 7 chapters

Detailed narrative

Q4 & FY25 Financial Performance Highlights

ASK Automotive reported a strong Q4 FY25, with revenue growing 8.5% and EBITDA increasing 24.7% year-on-year. PAT also saw a 20.6% rise. The EBITDA margin for Q4 FY25 stood at 12.5%, an improvement of 162 basis points over the previous year. For the full fiscal year FY25, the company achieved a revenue growth of 20.2%, with EBITDA and PAT growing 42.7% and 42.5% respectively, leading to an EBITDA margin of 12.3%, surpassing its guidance and improving by 193 basis points year-on-year. EPS for FY25 increased to Rs. 12.6 from Rs. 8.8 in the previous year.

Industry Outlook and Growth Drivers

The Indian automobile sector demonstrated healthy momentum in FY25, with overall vehicle production growing 9.1%. The Two-Wheeler segment was a key performer, with production growth of 11.3% and domestic sales up 9.1% year-on-year, driven by rising rural demand and consumer confidence. Management anticipates continued domestic growth of 6-8% for the Two-Wheeler industry in FY26, supported by a good monsoon forecast, potential interest rate cuts, and government tax benefits. Exports for the Two-Wheeler segment also saw an impressive 21.4% increase year-on-year.

Strategic Partnerships and New Product Initiatives

The company entered into a strategic partnership with Kyushu Yanagawa Seiki Co. Ltd., Japan, in March 2025 for high-pressure die-casted alloy wheels for Two-Wheelers, targeting a Rs. 2,000 crore scooter alloy wheels market. Additionally, a joint venture with AISIN Group, Japan, was signed in April 2024 to market and sell passenger car aftermarket products. A technical collaboration with LIOHO, Taiwan, for Two-Wheeler HPDC alloy wheels is also underway, with capacity built and products under testing, expected to begin supplies in H2 FY26. These initiatives aim to leverage first-mover advantage and expand product offerings.

Manufacturing Capacity Expansion

ASK Automotive is actively expanding its manufacturing footprint. The Bangalore facility, its eighth plant and third in South India, commenced commercial production on January 14, 2025, with an investment of Rs. 155 crore to date and an additional Rs. 100 crore planned for FY26, aiming for Rs. 400-500 crore in revenue potential and 60-70% capacity utilization by Q4 FY26. The largest plant in Karoli, Rajasthan, has seen an investment of Rs. 490 crore by March 2025, with another Rs. 200 crore planned for FY26, currently operating at 50% utilization with a peak revenue potential of Rs. 1,100-1,200 crore. Total CAPEX for FY26 is projected at Rs. 450 crore.

Financial Health and Capital Structure Improvement

The company's financial health significantly improved, with CRISIL Ratings upgrading its long-term credit rating from "AA-" to "AA". Debt to equity ratio reduced to 0.38x in FY25 from 0.42x in the previous year, and average debt to EBITDA improved to 0.83x. The Return on Capital Employed (ROACE) stood at 27.7% and Return on Equity (ROAE) at 26.5%, reflecting strong capital efficiency. The company also recommended a dividend of 75%, or Rs. 1.5 per equity share on a face value of Rs. 2. ROCE improved from 23.64% to 27.5% in FY25, with management expecting similar levels next year.

Product Segment Performance and Business Mix Changes

All three core product segments showed strong revenue growth in FY25: Advanced Braking system grew 16%, Aluminum Lightweighting Precision Solutions grew 28%, and Safety Control Cable grew 14%. However, the company is strategically shifting away from its low-margin wheel assembly business, with a customer moving 60% of this business from Q4 FY25. This shift is expected to reduce FY26 revenues by approximately Rs. 300 crore but will improve overall EBITDA margins by 80 basis points, contributing to the targeted 14% EBITDA margin for FY26.

EV Market Engagement and Future Outlook

While the EV market currently accounts for less than 5% of the total Two-Wheeler industry, ASK Automotive is actively engaged, supplying to 80% of the organized EV market. The company's content per vehicle is higher in the EV segment due to aluminum lightweighting components. Management expressed optimism for the EV market's growth, noting that the company is "fully hedged" by supplying components for both ICE and EV vehicles, ensuring resilience regardless of market shifts. Despite potential price cap issues, the company aims to benefit from the EV sector's expansion.

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