JTEKT India

JTEKT India reported a sales growth of 5.6% for the first half of FY26, significantly outperforming the Passenger Vehicle market growth of 1.6% during the same period. EBITDA margins showed an improvement in Q2 FY26, reaching 7.2% compared to 5.3% in Q1 FY26. However, the H1 FY26 EBITDA margins stood at 6.3%, a decline from 7.6% in the previous financial year (FY25). This margin compression was attributed to a 0.8% increase in employee costs, a 0.2% rise in manufacturing costs due to higher power tariffs and new production lines, and a 0.2% increase in material costs due to an unfavorable product mix.

The company is actively pursuing significant capacity expansion. The sixth manual gear line at the Dharuhera facility became operational in August '25, boosting production capacity from 28 lakh to 32 lakh units. Additionally, the third CPS line commenced operations in July-August 2025, increasing capacity from 10 lakh to 15 lakh units. A second CVJ line at Dharuhera is expected to be operational within 1-2 months, which will expand CVJ capacity from 3.7-4 lakh units to 7.5-8 lakh units. Total capital expenditure for H1 FY26 was approximately INR 118 crores, against a cash generation of INR 72 crores, leading to an increase in bank borrowings by INR 76 crores.

JTEKT India is focusing on enhancing its role in the global supply chain. The company secured a purchase order from JTEKT Brazil for steering manual gears, with supplies expected to commence from June or July next year. This initiative is projected to start with 1 lakh units and has the potential to grow to 5 lakh units, contributing up to INR 150 crores in revenue within 2-3 years and increasing export contribution to overall sales to 6%. Management aims to increase the overall export contribution to total sales from the current 4% to between 8% and 10%. The company is also working to overcome challenges like reciprocal tariffs that impacted U.S. exports, which were INR 298 million in H1 FY26 compared to INR 512 million last year.

The company anticipates improved market conditions in the second half of the financial year, driven by the Indian wedding season, positive agriculture cash flows, and new product launches. New business from Maruti Suzuki (e-Vitara, Victoris) contributed INR 260 million in H1 FY26, supporting a 5% growth in the Maruti Suzuki and Toyota segments. A new Maruti Suzuki variant, similar to e-Vitara, is expected to launch around August '26. JTEKT India is also supplying for Tata Coral (an EV vehicle) and expects new EV models from Honda next year.

To enhance competitiveness and secure cost advantages for Constant Velocity Joints (CVJ), JTEKT India is undertaking backward integration for forging critical CVJ parts like JF outer and JPL. Approximately INR 55 crores from the rights issue proceeds have been allocated for this project, primarily for importing machines. This facility is expected to have an installed capacity of 4 lakh to 5 lakh units, covering the company's total requirement for these parts. Management expects this project to be completed soon, contributing to both domestic market growth and overseas supply.

JTEKT India is establishing a new manufacturing facility in Gujarat, announced in October 2024, to cater to the expansion of OEMs in the Western region. A major portion of the rights issue proceeds, INR 114 crores out of INR 249 crores, has been allocated for the construction of the building and utilities. Factory designing has been completed, with full-fledged construction expected to commence in December 2025 and building completion by early 2028. The company has committed INR 250 crores for this project, which is deemed crucial for future growth.