Detailed Narrative
H1 FY26 Financial Performance and Growth Drivers
Delta Autocorp reported H1 FY26 total revenue of INR 42.13 crores, marking a 36.59% year-on-year growth, with total income at INR 43.45 crores, up 40.7%. EBITDA stood at INR 4.78 crores with an 11% margin, and net profit was INR 3.46 crores, achieving an 8.21% margin. The company sold 5,035 units in H1 FY26, comprising 3,135 two-wheelers and 1,900 three-wheelers, indicating stable performance aligned with its development phase.
Strategic Initiatives and Operational Enhancements
The company onboarded 7 new financing partners in H1 FY26 to enhance retail conversions and dealer throughput, including Kotak Mahindra Bank and Punjab Kashmir Finance. Upcoming scooters Infinia and Trento Plus received NATRAX and ICAT approvals, strengthening the product pipeline. Delta Autocorp also completed Assam government orders, including a repeat supply of 402 units and delivery of 2,000 garbage carts, demonstrating B2G execution capability.
Margin Dynamics and Cost Optimization
H1 FY26 operating margins decreased by 3%, primarily due to a 3% increase in marketing and advertisement costs and a 4% rise in logistics expenses, particularly from B2G orders out of Assam. However, the company improved COGS by 2% and reduced employee costs by 1% and interest costs by 0.65%. Management expects overall margins to stabilize between 8% to 10% going forward⏳, with Crossberg targeting higher margins of 22-25%.
Product Development and Launch Pipeline
Delta Autocorp is progressing with a diversified product lineup. The Crossberg and Infineon two-wheeler segments are slated for launch in Q4 FY26 (around February 2026). The Mini L5 model will also launch in Q4 FY26, followed by the proper L5 in H1 FY27. Further, one new scooter is planned for H2 FY27 and another for H1 FY28, with the entire development cycle spanning 18 to 22 months.
IPO Fund Utilization and Capital Allocation
Out of the INR 11.46 crores raised from the IPO, nearly all has been utilized for working capital. From the general corporate fund of INR 9.34 crores, INR 7.14 crores have been utilized. Approximately INR 2 crores has been invested in new product development, with remaining funds placed in FDs. The company plans to deploy the remaining IPO funds over the next 1.5 to 2 years for new product development, tooling, molds, and setting up a new three-wheeler paint capacity.
Investor Concerns and Management Response
Management acknowledged significant investor concerns regarding the substantial decline in share price and the perceived slow utilization of IPO funds. They clarified that product development is milestone-based to ensure quality, leading to a phased deployment of funds. Regarding a Customs Department show cause notice for INR 76 lakhs, management stated it was an inadvertent error and they are confident of a favorable resolution, having previously won a case for INR 1.96 crores.