Divgi Torq

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.

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.

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.

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.

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.

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.

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.