ASK Automotive

The Indian economy demonstrated resilience in FY26, projected to grow at an impressive 7.6% GDP, driven by robust domestic demand and government policies. The two-wheeler industry mirrored this strength, closing FY26 with a strong production volume of 26.7 million units, up from 23.9 million units in FY25, surpassing the previous peak of FY19. This growth was further supported by GST 2.0 reforms, which reduced the GST rate from 28% to 18% for certain products, benefiting the aftermarket segment.

ASK Automotive delivered robust financial results for Q4 and FY26. In Q4 FY26, consolidated revenue grew by 35.3% year-on-year, with net revenue (excluding pass-through and wheel assembly reduction) up 30%. EBITDA reached Rs. 140 Cr, a 31.1% year-on-year growth, though the margin was impacted by 80 basis points due to alloy price volatility. For the full year FY26, consolidated revenue grew by 16.2% (20.1% net revenue), with EBITDA at Rs. 551 Cr, up 24.1% year-on-year. EPS increased to Rs. 15.08, up from Rs. 12.56 in the prior year.

The company is actively pursuing green energy initiatives to enhance operational sustainability. Its 9.9 megawatt solar plant at Sirsa, Haryana, has been fully operational since April 2025, contributing to sustainable operational economies. Furthermore, a second captive solar plant of 11.55 megawatt in Bikaner, Rajasthan, is progressing well and is expected to be commissioned in Q2 FY27, underscoring ASK Automotive's commitment to environmental responsibility and cost efficiency.

All three core product segments demonstrated strong performance, outperforming the overall industry growth of 11.8% in FY26. The advanced braking system revenue grew by 17%, aluminium light-weighting precision solutions by 30%, and safety control cable revenue by 14% year-on-year. Notably, the independent aftermarket segment achieved a significant growth of 24.7% in FY26, largely attributed to the benefits of GST 2.0 reforms, which allowed the company to capture market share from grey market operators.

While the company achieved a Q4 EBITDA margin of 12.1% and an FY26 margin of 13.1%, these were impacted by the pass-through effect of significant increases in aluminium alloy prices. Management noted a conscious loss of Rs. 5 Cr in Q4 due to abrupt price hikes in March that could not be immediately passed on. However, price increases implemented in April are expected to correct this. The company aims to sustain current EBITDA margins and gradually improve them in subsequent quarters, despite input cost pressures from minimum wage increases, which are expected to be compensated by OEMs.

ASK Automotive is expanding its manufacturing capabilities, with the Bangalore plant reaching 90% capacity utilization. The Karoli plant, currently at 65% utilization, is set to see higher utilization with alloy wheel supplies to a Japanese customer beginning in H2 FY27. The company plans a capex of Rs. 400 Cr in FY27 for new plant capacities, funded by internal accruals. Strategic partnerships, including one with Lioho and Kyushu for alloy wheels and a cable JV with TD Holding, are progressing, with contributions expected from H2 FY27.

Management expressed confidence in maintaining a 'mid-teens' revenue growth trajectory for FY27, driven by new product introductions, increased content per vehicle, and new customer acquisitions. They anticipate 20% export growth in FY27, contingent on geopolitical stability. The strategic reduction in the low-margin wheel assembly business, which will be nil from April 1, 2026, means that the real growth for FY27 will be 4% higher than the reported year-on-year growth. The company expects continued outperformance of the industry through these initiatives.