Divgi Torq — Q4 FY26 earnings call

Call held 2 Jun 2026

Management summary

Divgi TorqTransfer Systems reported a landmark FY26 with record-high revenues of INR375 crores, up 56% YoY, and a sharp 90% increase in PAT to INR47 crores, driven by strong performance in Transfer Cases and Components. The company also saw robust Q4 FY26 results with significant YoY growth in revenue and PAT. While the EV segment faced headwinds due to delayed product launches and flat industry growth, the company made strategic progress in expanding its EV portfolio and securing new orders, including a significant Japanese OEM nomination.

Highlights

  • FY26 Revenue reached an all-time high of INR375 crores, growing 56% YoY, bringing trajectory back on track.

  • FY26 PAT increased by over 90% to INR47 crores, reflecting strong operating leverage and optimized business mix.

  • Q4 FY26 revenue grew 78% YoY to INR113.8 crores and PAT grew 189% YoY to INR15.5 crores, demonstrating strong momentum.

  • Secured exclusive Transfer Case orders for Mahindra's Scorpio pickup and Tata Motors' Yodha pickup platforms for Indonesia exports.

  • Nomination received from a leading Japanese OEM for transfer case development for a global pickup truck platform with SOP targeted in FY28-29.

  • Components segment grew 124% in FY26, with exports contributing 18% of total revenue, up from ~6% previously.

Concerns

  • EV transmission segment remained relatively subdued and range-bound in FY26 due to lengthened development cycles at Tata Motors and flat industry growth.

  • EV volumes were impacted by delayed customer vehicle testing for a new product, pushing production to next month or July.

  • Competitive intensity in the EV market is high, with other players like Mahindra and MG Motors having strong offerings.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹113.8 Cr
    YoY +78% QoQ +18%
  • EBITDA
    ₹27.8 Cr
    YoY +92% QoQ +19%
  • EBITDA Margin
    24.5%
  • PAT
    ₹15.5 Cr
    YoY +189% QoQ +32%
  • PAT Margin
    13.6%

FY26

  • Revenue
    ₹375 Cr
    YoY +56%
  • EBITDA
    ₹92 Cr
    YoY +58%
  • EBITDA Margin
    25%
  • PAT
    ₹46.9 Cr
    YoY +92%
  • PAT Margin
    12.5%

What they filed

Q1 FY27: revenue up 90.3%, net profit up 177.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue54 53 58 72 83 +54%91 +72%108 +86%137 +90%
EBITDA11 9 9 14 17 +55%18 +100%22 +144%37 +164%
Net profit8 5 5 9 11 +38%12 +140%15 +200%25 +178%
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

SegmentFY26 Revenue GrowthFY26 Volumes
Transfer Case66%52,000 units
EV Transmission10%24,000 units
Components124%13,00,000 units
Exports——

Order book

high confidence

Total value

₹100 Cr

as of 2026-03-31 quantified

Inflow this quarter

₹100 Cr

Newly secured component programs are expected to contribute annual revenues nearing INR100 crores.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Gross ₹0 Cr · 0.0× EBITDA
    Importantly, this growth has been achieved while maintaining financial discipline, a debt-free balance sheet and continued investments in a strong debt-free balance sheet, disciplined capital allocation and investments in technology, engineering capabilities, leadership strengthening and future-ready mobility platforms.
  • Dividend ₹3.27/share (final)
    The Board of Directors has recommended a final dividend of INR3.27 per equity share of INR5 each for FY '26, subject to shareholders' approval.
  • Liquidity Liquidity disclosed The company expects to maintain a healthy net cash position even after factoring in future expansion plans and increased working capital requirements.
    And even after factoring in future expansion plans and increased working capital requirements associated with growth, the company expects to maintain a healthy net cash position.

Guidance & targets

Export Contribution

  • Export Revenue Contribution Export Contribution · medium-term · High confidence 20-25%
    Export contribution increased significantly, crossing 20% in Q2 FY '26, while the company continues to maintain a medium-term target of 20% to 25% export contribution to overall revenues.

    — Jitendra Divgi

EV Volumes

  • EV Volume Growth (new model) EV Volumes · next month or July · High confidence doubling
    But the vehicle testing, I think, took longer than we had thought it would. So next month or definitely by July, this new model will be going into production, and we are expecting almost a doubling of the EV volumes.

    — Jitendra Divgi

DCT Revenue

  • First Revenue Trickle DCT Revenue · calendar year · Medium confidence middle to second half of next year
    In low modest volumes, if our program management is successful, we could see the first revenue trickle happening maybe middle to second half of next year, calendar year and the big volume coming a year after that.

    — Jitendra Divgi

4-wheel drive potential

  • Potential Annual Revenue 4-wheel drive potential · Medium confidence INR300 crores
    I think we have called out a potential of around INR300 crores on the 4-wheel drive.

    — Jitendra Divgi

Automatic Transmission Volume

  • Potential Annual Volume Automatic Transmission Volume · Medium confidence 80,000 to 100,000 per year
    The automatic transmission number is extremely conservative. That is about -- the number we put up there is for about 80,000 to 100,000 per year.

    — Jitendra Divgi

What to watch in Q1 FY27

EV Volume Growth (new model)

Next month or July 2026
Current Subdued, new model delayed
Target Doubling of EV volumes

Why it matters

This is a direct short-term volume growth driver for the EV segment, which has been subdued, and its realization will indicate the segment's recovery.

So next month or definitely by July, this new model will be going into production, and we are expecting almost a doubling of the EV volumes.

Risks & concerns

  • Lengthened development cycles and flat industry growth in EV segment.

    medium

    EV transmission business remained relatively subdued due to lengthened development cycles at Tata Motors and flat industry growth in FY26.

    Management acknowledged

  • Delayed customer vehicle testing for new EV product.

    medium

    A new EV product launch was delayed due to prolonged customer vehicle testing, impacting FY26 EV volumes.

    Management acknowledged

  • Competitive intensity in the EV market.

    medium

    The EV market is highly competitive, with strong offerings from players like Mahindra and MG Motors, making market share gains challenging.

    Management acknowledged

  • Brand perception of Indian companies in global markets.

    low

    There is a need to gradually overcome existing brand perceptions about Indian companies in international markets to secure more global business.

    Management acknowledged

Q&A highlights

8 direct
Volume numbers for Transfer Case, EV, and Components segments. Direct
Yes. So I think -- and here, I'm kind of speaking from memory. This year we have accomplished about 50,000, 52,000? ... I think it was about 24,000. ... Over 1 million. ... 3.3 million. ... Over 13 lakhs.

Provides specific volume data for key segments, clarifying the growth drivers for FY26.

Asked by Karan Gupta

EV Capacity Utilization. Direct
Yes, we are just -- we're still around 25% capacity utilization. ... 25% to 30%.

Highlights significant headroom for growth in the EV segment without immediate further capital expenditure, indicating future efficiency gains.

Asked by Karan Gupta

Indonesia Orders status and FY27/FY28 Revenue Outlook. Direct
No, it is on track for FY '27. ... First is we have won a new 4-wheel drive contract on the Tata Sierra at Tata. The second one is there is an uplift on the volumes coming from the U.S. on a particular Ford application at one of our Tier 1 customers there. Third, the global pickup truck at Mahindra is going into production, and we have been requested by Mahindra to support their overseas facility in South Africa for this purpose.

Confirms Indonesia orders are on track for FY27 and details multiple new growth drivers beyond Indonesia for future years, including new contracts and export opportunities.

Asked by Mihir Vora

Purpose and scope of US subsidiary investment. Direct
See, the U.S. presence is like the beachhead, if I can use an Americanism. It's our initial beachhead. And 2 of our most experienced people will go on the ground by July, August in the U.S. ... This INR3 crores is just an initial setting up of offices, infrastructure, maybe a small warehouse to keep exhibits and things.

Clarifies the initial purpose and scale of the US subsidiary, focusing on market understanding and program management rather than immediate large-scale manufacturing.

Asked by Mihir Vora

Preference for organic vs. inorganic growth in the US market. Direct
Right now, our preference is to grow. Given the size of the business and the way we work, our preference is to sort of do this organically.

Sets the strategic direction for US market entry, emphasizing organic growth over acquisitions due to cultural adaptation challenges and focus on maximizing business impact.

Asked by Mihir Vora

Indonesian Government's stance on orders and media narrative. Direct
Yes, yes, yes. So there was a certain amount of media narrative that was being pushed. But I think it was, how should I say, a little frivolous and somebody thought that they could create this narrative and create some impediments for the Indian OEMs. But I think what has been overlooked in all of this is that our companies have been -- it has been a very above-the-Board kind of process.

Addresses concerns about potential political interference or delays in the Indonesian orders, reassuring that the process was fair and on track and that Indian companies won competitively.

Asked by Jai Prakash

EV platform onboarding timeline and challenges. Direct
Now it is this design, 90 to 120 kilowatt, which goes across these 4 platforms that was in vehicle testing at Tata, which took longer than expected. But we have successfully finished all our testing. We've got production part approval. So it's reasonable to say that in the -- in FY '27, we will see the volumes coming from these applications.

Explains the reasons for subdued EV volumes (delayed vehicle testing) and confirms that new platforms (Nexon, Curvv) will start contributing volumes in FY27, providing clarity on future EV growth.

Asked by Amit Dhameja

Potential annual revenue targets from new programs. Direct
For example, if we were to win a global 4-wheel drive business at, let's say, 200,000, which is about 16,000 units a month, which we have. It's realistic. We can easily scale up to that level. That would represent an opportunity of almost INR800 crores if we were to win 200,000.

Provides insight into the company's long-term revenue potential from new programs, particularly in automatic transmission and global 4-wheel drive, indicating significant upside beyond current estimates.

Asked by Kashish Shah

4 min read 7 chapters

Detailed narrative

Overall FY26 Performance and Recovery

Divgi TorqTransfer Systems achieved a landmark FY26, delivering its highest-ever total revenue of INR375 crores, marking a robust 56% growth over FY25. This strong performance followed two subdued years, indicating a significant recovery driven by execution and accelerated momentum across multiple growth drivers. The company also reported a healthy EBITDA of over INR92 crores (nearly 25% margin) and a sharp 90% increase in PAT to almost INR47 crores, reflecting strong operating leverage and optimized business mix. The quarterly revenue run rate nearly doubled from INR55 crores to over INR110 crores in Q4 FY26, which saw a 78% YoY revenue growth and 189% YoY PAT growth.

Transfer Case Business Growth and Strategic Wins

The Transfer Case business remained a strong and strategic vertical, witnessing a sharp recovery and emerging as the primary growth driver in FY26. Volumes returned close to FY23 levels, with a 66% YoY revenue growth in FY26, reaching 52,000 units. The company secured exclusive Transfer Case orders for Mahindra's Scorpio pickup and Tata Motors' Yodha pickup platforms for Indonesia export programs. A key strategic milestone was the nomination from a leading Japanese OEM for developing transfer cases for a global pickup truck platform, with SOP targeted in FY28-29, demonstrating significant technological advancements like Torque-on-Demand with M-Lock technology.

EV Transmission Segment Developments and Future Outlook

The EV transmission business remained relatively subdued in FY26, with revenue growing 10% YoY and volumes around 24,000 units, primarily due to lengthened development cycles and flat industry growth. However, the company made strategic progress by expanding its EV portfolio across multiple Tata Motors platforms, including a new design for Nexon and Curvv models, which received production approval and are expected to contribute volumes in FY27. Divgi TTS successfully developed an advanced 120-kilowatt transmission system and maintains a 25-30% capacity utilization, indicating significant headroom for future growth.

Components and Export Expansion as Key Growth Drivers

The Components segment emerged as a major growth engine, demonstrating robust performance with a 124% revenue growth in FY26, driven largely by exports. Export contribution to overall revenue increased significantly from approximately 6% to 18% in FY26, crossing 20% in Q2 FY26, with a medium-term target of 20-25%. This growth is attributed to increased volumes, deeper engagement with global Tier 1 customers like BorgWarner and Magna, and the company's ability to provide integrated engineering and supply chain solutions. Newly secured component programs are expected to contribute annual revenues nearing INR100 crores with volumes exceeding 1 million parts annually.

Manual Transmission and New Business Opportunities

The Manual Transmission and Synchronizer business saw its revenue nearly double in FY26, driven by increased synchronizer opportunities and new business wins on key components. The company is leveraging its application engineering capabilities and high localization to position itself as a reliable partner for OEMs. Divgi TTS is currently negotiating a significant opportunity with a leading Indian OEM to supply a full manual transmission for light and medium trucks, with potential volumes of up to 100,000 units per year, addressing quality and delivery concerns and offering a unique opportunity.

Strategic Focus on Automatic Transmission Localization

Divgi TTS views the automatic transmission market in India as a rapidly growing segment, driven by SUV demand and preference for ICE powertrains. Recognizing the negligible local content and Indian OEMs' demand for local solutions, the company is in advanced discussions for a technology transfer agreement with a leading global OEM. The strategy aims for deep localization of key subsystems, not just manufacturing, over the next 3 to 5 years, to build an ecosystem in India and position Divgi TTS as a deeply aligned Tier 1 supplier for Indian OEMs' global expansion.

Globalization Strategy and US Market Entry

The company is actively pursuing globalization, expanding its international footprint across North America, Europe, and Asia Pacific. The Board approved the incorporation of a wholly-owned subsidiary in the United States, with an initial investment of INR3 crores for setting up offices and infrastructure. This US presence, with two experienced personnel on the ground by July/August, aims to better understand the market, facilitate program management, and deepen customer engagement, with a strategic preference for organic growth. The company is also exploring opportunities in the Chinese EV market for mechanical systems.

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