Automotive Axles Limited — Q3 FY26 earnings call

For us, it's a little bit tricky and a bit difficult for us to quantify the overall growth with respect to a specific product or product mix. What we can -- I can tell you is the product mix has been positive. And our new product, what we have introduced, MS185, that volume is getting traction, which along with the operational efficiency, which has really helped us converting those additional sales.

Clarifies that product mix and new product traction are key drivers, making it hard to isolate volume vs. pricing impact.

Asked by Shikha Mehta

So I have not even seen the data. But going by what you're saying, if there is a change shift of 20% to 25%, that will translate into volumes considering where we have a single source, which means we are the 100% suppliers. That is with us. We convert that completely. That is what we did in the previous quarter. And then there is a common source where the customer has a dual sourcing strategy, they can buy either from us or the competition.

Explains that AUTOAXLES captures 100% of single-source demand, but dual-sourcing strategies with OEMs can lead to variations in growth alignment.

Asked by Shikha Mehta

This did not result in any drop in the market share of -- our share of business with the customer. Of course, there were mix changes where single source was the priority. As you understand, no line stockage is expected. So we were able to do that. And the second question is, again, which comes again and again, if there was a way to plot our growth, removing all other elements from the revenue, which is coming from non-on-highway or M&HCV segment, then you will see that it is as on par with the industry growth, right?

Management denies market share loss, attributing growth deviation to product mix shifts and performance of non-MHCV segments (export, off-highway, defense).

Asked by Pritesh

See, like I will just put it this way. Maybe, see, out of the total wallet share, as Kishan mentioned, so we have between exports and the other business, we have closer to about 20% -- somewhere it ranges between 15% to 25%. So when I see a total 9-month window, so this -- again, depending on the quarter, there are a lot of other factors that come in. So that's the reason we are not able to exactly give you how this movement happens because you have to factor up all the macroeconomic stuff and everything that's going on.

Management explains the variability and macroeconomic influence on the non-MHCV segment, making it difficult to quantify shrinkage precisely.

Asked by Pritesh

So I'll take this question. So see, it's like -- I think we have already explained, right? So we have the technical fee arrangement with Meritor. So whatever is the revenue growth, so to that extent because it works as a percentage on the revenue. So you'll see the same amount that will also move in the other expenses. So maybe that is one significant portion. Given that revenue has grown by about 22%, you would see a similar kind of a growth there. So yes, that's mostly about that.

Clarifies that the increase in 'other expense' is primarily due to technical fees linked to revenue growth, not an unusual cost spike.

Asked by Ankur Kumar

Coming to the U.S. tariff, it's not just the tariff when it is U.S. It's important to understand what the market is -- what is happening in the market there. And as we stand beginning of February, I think the market is still expected to be low. And when I say market there, the addressable market for us is in the commercial vehicle is the Class 8, which is the heavy duty. That is where our strongest presence is. And until unless the market improves, the tariff alone will not drive any major shift.

Management explains that while the deals bring certainty, market conditions (especially in US Class 8 commercial vehicles) are more critical than tariffs alone for driving growth.

Asked by Rakesh Sharma

Let me just talk about this. See, we did not have any capacity constraints for the current market volumes. So we did not lose any revenue because of the capacity portion of it. Like Kishan has always mentioned, it was a product mix in the industry and at the same time, other than M&HCV, whatever the industry impact was there, that is what is kind of slowing us down in terms of growth or matching with the M&HCV growth. What we talked the capacity is basically to look at the future capacity whenever the M&HCV market and then export demands come back in next 6 to 12 to 18 months, we will be ready to convert those demands without having to lose that potential orders.

Clarifies that current capacity is not a constraint, and future capacity additions are for anticipated M&HCV and export demand in the next 6-18 months, not for immediate volume growth.

Asked by Saket Kapoor

When you -- okay, let me start with what we are seeing globally. We're seeing globally OEMs are actually moving away from doing anything to do with axle. So we have examples in Europe and North America where discussions are going on where OEMs are asking us do our axles, even including their own design, right? That's the trend where the focus is on other technology and the other relevant value that they want to create on the vehicles.

Management states the global trend is OEMs moving away from in-house axle manufacturing, which is favorable for component suppliers like Automotive Axles.

Asked by Akash Vora