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    Kross Q1 FY27 earnings call

    KROSS
    Automobile and Auto Components·27 Jul 2026
    Management Summary

    Kross Ltd reported a strong Q1 FY27, driven by robust revenue and profit growth across its segments, supported by operational efficiencies and strategic capacity expansions. The company successfully commissioned its extrusion line and is on track with other capex projects. Management highlighted positive industry trends, including the 'Parivartan' scheme and expected commodity cost pass-through, while also focusing on export growth and product diversification.

    Highlights

    5

    • Revenue reached ₹185.35 crores, registering a strong 32% year-on-year growth.

    • EBITDA grew by 39.5% year-on-year to ₹225.54 million, with margin expansions to 12.23%, up 63 bps YoY.

    • Profit After Tax (PAT) increased 24.4% year-on-year to ₹133.12 million.

    • The extrusion line has been successfully commissioned and productionized, with positive feedback from fleet owners and fabricators.

    • Exports demonstrated robust growth of 45% year-on-year, with a target to reach 8% of total business in the next two years.

    Concerns

    2

    • The company is facing cost pressures from commodity price increases (steel, LPG, other gases, tooling, oil, and lubricants), though pass-through is expected.

    • While the trailer axles and suspension business grew 34% YoY, the underlying industry growth was in single digits, raising questions about market share gains versus spillover orders.

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹185.35 Cr+32%YoY
    2. 02EBITDA₹22.554 Cr+39.5%YoY
    3. 03EBITDA Margin12.2%
    4. 04PAT₹13.312 Cr+24.4%YoY
    5. 05PBT₹17.827 Cr

    Segment breakdown

    Trailers, Axles, Suspensions, Tipping
    41% Revenue Contribution
    Component Business
    59% Revenue Contribution
    List

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    IPO proceeds for capacity expansion and working capital

    Debt

    Debt disclosed

    Guidance & targets

    9
    CategoryTargetPriority
    Exports
    Export Revenue Contribution
    at least 8%
    		High
    Exports
    Export Revenue Growth
    40-45%
    		High
    Capacity
    Foundry High-Pressure Mold Line Start
    start in Q3
    		High
    Capacity
    Axle Shaft Production Facility Commissioning
    by September 2026
    		High
    Capacity
    Seamless Tube Plant Commissioning
    by quarter four
    		High
    Capacity
    Seamless Tube Production Trials
    some production trials
    		High
    Capacity Utilization
    Tipping Jacks Capacity Utilization
    65-70%
    		High
    Pricing
    Axles Business Price Increase
    another 1% or 2%
    		Medium
    Volume Growth
    CV Business Volume Growth
    grow well
    		Medium

    What to watch in Q2 FY27

    5

    Foundry High-Pressure Mold Line Start

    Q3 FY27
    CurrentExpected to start in Q3 FY27
    TargetOperational in Q3 FY27

    Why it matters

    This will double foundry capacity and is key for future growth and self-reliance.

    A high-pressure mold line for our foundry is expected to start in Q3.

    Risks & concerns

    2
    RiskSeverity

    Commodity price inflation (steel, LPG, other gases, tooling, oil, lubricants)

    Input costs have increased, but management expects pass-through to customers, with steel price pass-through already secured retrospectively. — Management acknowledged

    medium

    Discrepancy between company's trailer axle/suspension growth and underlying industry growth

    Kross grew 34% YoY in trailer axles/suspension, while the industry grew in single digits. Management attributed this to spillover orders from Q4 FY26 and increased capacity, implying it might normalize. — Analyst downplayed

    low

    Q&A highlights

    8

    “So, if we look into our cost, there are basically two most important settlements which are there in the industry. One is with the commodity price increase, that is steel for us. So steel, there has been a very recent settlement which has been given retrospective to all the suppliers. This has just happened around the 15th of July where INR4,700 per kilo has been given. Secondly is because of all the input costs increasing from the month of March right up to now in terms of LPG, other gases, tooling, and oil and lubricants, there is also a talk on the conversion price increase which is supposed to be passed on to the suppliers.”

    Analyst inquired about the impact of cost pressures and the status of OEM settlements, which are crucial for margin protection. Management confirmed retrospective pass-through for steel and ongoing discussions for other input costs.

    asked by Shubhi Gupta

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Financial Performance Overview

    Kross Limited reported a strong Q1 FY27, with revenue reaching ₹185.35 crores, marking a 32% year-on-year growth. EBITDA increased by 39.5% YoY to ₹225.54 million, and EBITDA margins expanded by 63 basis points to 12.23%. Profit After Tax (PAT) grew 24.4% YoY to ₹133.12 million, with a PAT margin of 7.2%. This performance reflects the company's focus on profitable growth and operational efficiency.

    02

    Segmental Performance and Industry Outlook

    The CV segment, including tractors and trailers, showed strong momentum, with the trailer segment performing better than expected. The company's business in axle suspension and tipping jacks is progressing well, with extruded axle beam production started and volumes up 30% YoY. The trailer, axle, suspension, and tipping segments collectively contributed 41% to revenue, while the component business accounted for 59%. Management anticipates continued volume growth across all segments, especially from September onwards.

    03

    Capacity Expansion and New Initiatives

    Kross Limited has successfully commissioned its extrusion line, which is expected to enhance offerings to fleet owners and fabricators. Progress on the seamless tube facility is on track, with the piercing mill received and other mills on high seas, aiming for commissioning by Q4 FY27 and production trials by year-end. A high-pressure mold line for the foundry is expected to start in Q3, doubling capacity, and the axle shaft production facility is slated for commissioning by September 2026. IPO funds have been fully utilized for capacity expansion and working capital.

    04

    Cost Management and Pricing Actions

    The company is addressing cost pressures from commodity price increases, particularly steel, LPG, and other inputs. A retrospective settlement for steel price increases (₹4,700 per kilo) has been secured from OEMs. Discussions are ongoing for conversion price increases to cover other input costs. Kross implemented a 3-5% price hike in its axles business from April 1st and plans another 1-2% increase, expecting competitors to follow suit due to industry-wide cost inflation.

    05

    Export Business Growth and Strategy

    Kross's export business demonstrated significant growth of 45% year-on-year. The company is actively working to increase its export share, targeting at least 8% of total revenue within the next two years. Currently, 4-4.5% of export revenue comes from a European Tier 1 manufacturer for commercial vehicle parts, with new product segments scheduled for H2 FY27, supporting a projected 40-45% export growth for the current financial year.

    06

    Regulatory Environment and 'Parivartan' Scheme

    The government's 'Parivartan' scheme, effective October 30, 2026, is expected to significantly boost the commercial vehicle segment. This scheme prohibits BS4 or older vehicles from entering the Delhi NCR region and offers incentives for replacing old vehicles, including a 10-year road tax holiday, free new vehicle registration, and discounts (5% subsidy, 8% OEM discount). Management believes this, along with GST reforms, will be supportive of the CV industry.

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