Carraro India Limited

Carraro India reported a robust FY26, with revenue from operations growing 25% year-on-year to INR2,255.5 crores. This growth was supported by a 19% increase in domestic revenues and a 37% surge in exports. Profitability also saw significant improvement, with EBITDA rising 33% to INR247.5 crores and margins expanding to 10.8% from 10.2% in FY25, driven by operational leverage and cost management. PAT grew 48% year-on-year to INR130.6 crores, with a PAT margin of 5.7%.

The fourth quarter of FY26 continued the strong performance, with revenues from operations up 37% year-on-year to INR606.7 crores. EBITDA for the quarter grew 45% to INR71 crores, leading to an EBITDA margin of 11.6%, up from 10.9% in Q4 FY25. Profit after tax saw a substantial 76% increase to INR41.7 crores, with PAT margin improving to 6.8%. Management attributed the Q4 material percentage increase to an adverse product mix rather than commodity inflation, with typical cost pass-through taking about 3 months.

The agricultural vehicles segment recorded 19% year-on-year revenue growth to INR1,019.2 crores in FY26, primarily fueled by strong demand for four-wheel drive axles. The construction vehicles segment grew 31% year-on-year to INR983.7 crores, despite a 2% decline in the overall domestic construction equipment market. Exports contributed 36% of total revenue, growing 37% year-on-year to INR812.5 crores, with Europe, Turkey, China, Latin America, and the US being key markets.

Carraro India invested approximately INR41.7 crores in capex during FY26, focusing on new telescopic handler axle production, high-performance transmission programs, and incremental manufacturing capacity expansion. The company also secured a business nomination for bull gears valued at INR150 million annually starting FY28 and signed an engineering services agreement worth INR175 million. Raw material localization stood at 78% in FY26 and is targeted to increase to 86-88% over the next two to three years to enhance supply chain resilience and cost optimization.

For FY27, the company anticipates revenue growth in the range of 4-8% (speculative due to volatility) to 8-12% (if conditions normalize), with a long-term target of INR3,500-4,000 crores by FY30. However, management highlighted potential risks from the evolving macroeconomic and geopolitical situation, particularly in West Asia, which could impact production and supply chains in H1 FY27. Despite these uncertainties, profitability is expected to improve.

The company significantly strengthened its balance sheet, with debt-to-equity improving to 0.27x as of March 2026 from 0.42x in March 2025. Working capital days were reduced to 38 from 45 days in FY25, reflecting improved management and operational discipline. The Board recommended a final dividend of INR6.75 per equity share for FY26, representing a payout ratio of approximately 30%, demonstrating a commitment to shareholder returns while supporting future growth investments.