Concall AI

Delta Autocorp Ltd — Q2 FY26 earnings call

Call held 21 Nov 2025

Management summary

Delta Autocorp reported robust H1 FY26 financial performance with strong revenue and income growth, alongside stable EBITDA and net profit margins. The company made significant progress in strengthening its operational foundation, including expanding financing partnerships and securing product certifications. However, management faced intense scrutiny from investors regarding substantial share price decline, the slow utilization of IPO funds, and a regulatory notice, which they addressed by detailing future product launches and operational improvements.

Highlights

Total Revenue for H1 FY26 was INR 42.13 crores, marking a 36.59% year-on-year growth.
Total Income for H1 FY26 was INR 43.45 crores, a 40.7% year-on-year growth.
EBITDA margin was maintained at 11% for H1 FY26.
Net Profit stood at INR 3.46 crores with a margin of 8.21% for H1 FY26.
Successfully onboarded 7 new financing partners, enhancing retail conversions and dealer throughput.
Received regulatory approvals for upcoming scooters Infinia and Trento Plus, strengthening the product pipeline.

Concerns

Significant share price erosion, with two-thirds of investor wealth lost within months of IPO.
Received a show cause notice from the Customs Department for INR 76 lakhs due to an inadvertent disclosure miss.
PAT margins slipped from 13% to 8.1% in H1 FY26, attributed to increased marketing, advertisement, and logistics costs.
Approximately INR 26 crores of IPO funds remain unutilized and are held in FDs, raising questions about deployment speed.

Key financials

2 periods

Headline

Total Revenue
₹42.127 Cr
YoY +36.6%
Total Income
₹43.452 Cr
YoY +40.7%
EBITDA
₹4.782 Cr
EBITDA Margin
11%
Net Profit
₹3.459 Cr
Net Profit Margin
8.2%

H1 FY26

Units Sold
5,035 units

What they filed

₹ Cr · quarterly

Line item	Q2 FY25	Q4 FY25	Q2 FY26	Q4 FY26
Revenue	31	52	42	38
Expenses	27	45	39	35
EBITDA	4	7	3	3
Margin	13%	13%	8%	7%
Other income	0	1	1	2
Interest	0	0	0	0
Depreciation	0	0	0	0
Profit before tax	4	8	5	5
Tax rate	24%	22%	25%	34%
Net profit	3	6	3	3
EPS	2.51	3.85	2.26	2.03

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

Share of Units Sold (H1 FY26)

5,035 units Total

Two-wheelers 3,135 units 62.3%
Three-wheelers 1,900 units 37.7%

Capital allocation

high confidence

Capex Capex disclosed
- New product development ₹2 Cr
- Tooling, molds, and setting up new three-wheeler paint capacity
- Working capital to support bulk orders
in terms of investment in new product development, we have invested about INR 2 crores till now, because we are doing it in a phase-wise and milestone-based manner. In terms of working capital, we have almost utilized the entire INR11.46 crores that was raised. And out of the general corporate fund of INR9.34 crores, we have utilized INR7.14 crores yet. And so, the cash that is there in the balance sheet as of now, so that is being put in FDs and it is kept for now there. But as we like, most of the development will be completed across FY '26 and FY '27. So, this cash would be consumed in the next 1.5 years' time, which would definitely translate into a better product portfolio and hence better revenues going forward.
Liquidity Liquidity disclosed IPO funds of INR 26 crores remain unutilized and are currently in FDs, planned for deployment over the next 1.5 to 2 years for product development and capacity expansion. INR 7.14 crores utilized from general corporate fund of INR 9.34 crores.

in terms of working capital, we have almost utilized the entire INR11.46 crores that was raised. And out of the general corporate fund of INR9.34 crores, we have utilized INR7.14 crores yet. And so, the cash that is there in the balance sheet as of now, so that is being put in FDs and it is kept for now there. But as we like, most of the development will be completed across FY '26 and FY '27. So, this cash would be consumed in the next 1.5 years' time, which would definitely translate into a better product portfolio and hence better revenues going forward.

Guidance & targets

Revenue

FY26 Revenue Revenue · FY26 · High confidence INR 100 crores

Like this financial year, we are targeting a revenue of INR100 crores. So, we will be hitting that number.

— Ankit Agarwal
FY27 Revenue Revenue · FY27 · High confidence INR 125 crores to INR 130 crores

And going forward also, we are targeting an aggressive number of INR125 crores to INR130 crores for FY '27 also.

— Ankit Agarwal
H2 FY26 Revenue Revenue · H2 FY26 · High confidence INR 55 crores to INR 58 crores

As I mentioned, the H2 revenue guidance is like, I mean we are targeting something between INR55 crores to like INR58 crores. So we aim to hit about INR100 crores of revenue in this full financial year.

— Ankit Agarwal

Volume

Units Sold Volume · going forward (FY26) · High confidence 15,000 to 16,000 numbers

So, the target remains the same. Like, we will be hitting about 15,000 to 16,000 numbers going forward. So, that is the objective and that is the aim.

— Ankit Agarwal

Margin

Overall Margins Margin · going forward · High confidence 8% to 10%

expect the margins to be in this territory only, like, between, like, 8% to 10% is what we are expecting, depending on the split of orders that we get, like, across B2G, B2B, and B2C.

— Ankit Agarwal
Crossberg Margins Margin · post launch · High confidence 22% to 25%

For Crossberg, the margins would be, like, I mean, as we go in the higher category, the margins would be definitely in terms of numbers and in terms of percentages also, the margins will be high around 22, like, I mean, around 25% or the margins should be there, absolutely.

— Ankit Agarwal

Product Launch

Crossberg Launch Product Launch · Q4 FY26 · High confidence Q4 FY26 (around February)

So, it will happen in Q4 of this financial year, positively. So, around maybe... February of FY '26. So, that's what the target is to launch it.

— Ankit Agarwal
Mini L5 Model Launch Product Launch · Q4 FY26 · High confidence Q4 FY26

The mini L5 model will be launched in Q4 of FY '26.

— Ankit Agarwal
Proper L5 Model Launch Product Launch · H1 FY27 · High confidence H1 FY27

And the proper L5 that we are developing, that will be done in like H1 of FY '27. That will be launched basically by that time.

— Ankit Agarwal

What to watch in Q3 FY26

Crossberg scooter launch and initial sales

Q4 FY26 (around February 2026)

Current In development, targeted Q4 FY26

Target Successful launch and initial sales figures

Why it matters

Crossberg is a premium segment product with high-margin potential, crucial for revenue and profitability growth.

So, it will happen in Q4 of this financial year, positively. So, around maybe... February of FY '26. So, that's what the target is to launch it.

Risks & concerns

Share price erosion and investor wealth destruction
high

Share price has fallen significantly, leading to a loss of two-thirds of investor wealth, causing concern among shareholders.

Analyst acknowledged
Customs Department show cause notice for INR 76 lakhs
medium

A show cause notice was issued in September due to an inadvertent disclosure miss, though management is confident of a favorable resolution.

Both acknowledged
Margin compression due to increased operating costs
medium

PAT margins slipped from 13% to 8.1% in H1 FY26 due to higher marketing, advertisement, and logistics expenses, though cost optimization efforts are underway.

Both acknowledged
Delays in product launches and utilization of IPO funds
medium

IPO funds for new product development are being utilized in a phase-wise, milestone-based manner to ensure product perfection, leading to slower deployment than some investors expected.

Analyst downplayed

Q&A highlights

5 direct

Comparison with Zelio Mobility and utilization of balance sheet cash Direct

our products have traditionally been positioned at the premium end of the segment, both in terms of quality and pricing. But off late, we have made adjustments in pricing. And over the last 3 months, we have already seen good growth in volume in the two-wheeler category. Secondly, as I mentioned in my opening speech, we onboarded 7 new financers in H1 FY '26, which will help us enhancing retail conversions and dealer throughput in the next 2 quarters. Apart from this, we are also in the middle of a planned product portfolio expansion with multiple new models under development. This will begin contributing meaningfully as they launch, supporting sustained scale-up rather than short-term spikes.

Addresses competitive positioning and how the company plans to achieve growth, along with initial details on IPO fund deployment.

Asked by Ayush from Hukam Capital

Investor wealth erosion, unutilized IPO funds, and management's commitment to shareholders Direct

We fully acknowledge that our share price has fallen from the IPO level and we understand the concerns this creates for our valued shareholders. However, top movements in the short term are influenced by many external factors beyond our control. But what remains firmly within our control is how we build and run this company. Over the last six months, we have focused on strengthening the fundamentals, expanding our network, adding trusted financing partners, opening new outlets, improving leadership depth, executing government deliveries with discipline and advancing development across both two-wheeler and three-wheeler portfolio.

Directly confronts significant investor dissatisfaction and outlines the company's strategy to rebuild value through fundamental improvements.

Asked by Amit Bhatt from MIT Engineers

Customs Department show cause notice for INR 76 lakhs Direct

So, there was a show cause notice which was issued to us in the month of September. And it was a genuine mistake at our end. We inadvertently missed it. And this stemmed from our earlier understanding that the disclosure to exchange was required only when an order has been passed against the company. But this is a mistake. And to ensure that this does not happen again, like to ensure full compliance going forward, we have taken immediate corrective actions. Our internal disclosure framework has been comprehensively revised. And all department notices across compliance, finance and tax will now be evaluated strictly under Regulation 30.

Clarifies a regulatory issue, its cause, and the corrective measures being implemented to prevent future occurrences.

Asked by Ayush from Hukam Capital

H1 FY26 units sold, target units, margin outlook, and Crossberg launch/margins Direct

in the first half of FY '26, we have sold about 5,035 units in total across the two-wheeler and three-wheeler category. ... our operating margins have decreased by 3%. This is primarily due to two reasons. Our marketing and advertisement cost has increased by 3% and our logistic expense has increased by 4%. Because this year, like, I mean, we were doing the B2G order and it was based out of Assam. So, there was loss of logistic cost involved in that. On the other side, we have, like, improved margins in terms of COGS. The blended COGS has come down by 2% for this, for H1 FY '26.

Provides specific sales volumes, explains the reasons for margin compression, and details cost optimization efforts.

Asked by Disha from Sapphire Capital

Revenue from government, delays in shareholder information, manufacturing process, and low margins Partial

the first question you asked about the revenue split is about INR21 crores, which has come from the garbage cart. And regarding the update, see, I understand that there has not been consistent communication from our side in the past. Because a lot of the developments that we were developing new products, whether in two wheelers or three wheelers, they were running in the testing and development phase. So, it takes a little time in these things. And they were not at the stage where we were able to give regular updates. But now, as our multiple projects are coming in the completion stage, you will get a timely update from the company in a structured way.

Clarifies the source of government revenue and acknowledges past communication issues, promising improved transparency going forward.

Asked by Kushal from Kushal Digital

IPO funds utilization, sales numbers (2W/3W breakup), capacity utilization, and product launch timelines Direct

out of the 5035 units that we have sold, 3135 units are of the two-wheelers and about 1900 units are for our three-wheelers. Breakup for the two-wheeler as well as the three-wheeler segment. In terms of capacity utilization, yes, capacity utilization in the West Bengal plant is about like 40%-50% at this point of time. In the North India plant, which is in NCR, the capacity utilization is about like 15% till now.

Offers granular details on sales mix, capacity utilization across different plants, and reiterates product launch timelines, addressing key operational concerns.

Asked by Kenil Savla from Arth Investment

2 min read 6 chapters

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.

This is an AI-generated summary of a publicly available earnings call transcript.

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