Detailed Narrative
Strong Q4 & H2 FY26 Performance
Kross Limited concluded FY26 on a strong note, with Q4 FY26 sales growing 22% year-on-year to INR 225.4 crores. The second half of FY26 saw a significant revenue increase of 49.2% over H1 FY26, reflecting strong momentum driven by a favorable macroeconomic environment, GST rationalization benefits, and a robust recovery in the commercial vehicles segment. For the full year, the company registered a top-line growth of 8.5%, with total revenue reaching INR 673.2 crores.
Profitability Expansion
The company demonstrated strong profitability, with Q4 FY26 EBITDA growing 25% year-on-year to INR 33.6 crores, and EBITDA margin expanding by 41 basis points to 14.9%. PAT for Q4 FY26 increased 31% year-on-year to INR 22.4 crores, with PAT margin at 10%, up 69 basis points. For the full year, EBITDA was INR 87.9 crores (up 8.2%) and PAT was INR 55.2 crores, with a PAT margin of 8.2%, up 46 basis points year-on-year.
Segmental Growth & New Product Traction
The auto component sector, particularly tractor, commercial vehicles (M&HCV), and trailer segments, witnessed a strong recovery. The company successfully launched and validated its Tipping Jacks product, selling 75-80 units in Q4 FY26 and targeting 300-500 units per quarter in FY27. The Axle Beam Extrusion plant has been commissioned, with sales expected to commence in May 2026, further strengthening its position in the trailer ecosystem.
Strategic Capacity Expansions & IPO Utilization
Kross Limited is undertaking significant capacity expansions, including a High Pressure Mold Line operational by September 2026 to double casting capacity, and a new Robotic Forging facility for Rear Axle Shafts also ready by September 2026. The seamless tube facility construction is almost complete, with equipment dispatch in May and full operationalization targeted for Q4 FY27, with revenue contribution from FY28. The company confirmed 100% utilization of its IPO proceeds for these strategic initiatives.
Capital Expenditure Plans
The company incurred approximately INR 100 crores in CAPEX for FY26. For FY27, a CAPEX of approximately INR 100 crores is planned specifically for the seamless tube unit, with an additional INR 20-25 crores allocated for maintenance and upgrades in other businesses like machining and new casting lines. These investments are aimed at supporting future growth and enhancing production capabilities.
Commodity Headwinds & Margin Outlook
Despite strong demand, Q4 was challenging due to the Middle East conflict, LPG shortages, and substantial increases in commodity prices and consumables. Management anticipates margin pressure in Q1 FY27 due to steel price hikes (INR 3-5/Kg) effective April and other cost increases, with OEM pass-through being retrospective. However, for the trailer axle and suspension business, price hikes have already been passed on to fabricators. The company aims to maintain 14-15% margins in future quarters.
Tractor & Export Segment Targets
The company aims to increase the tractor segment's contribution to 15% of total revenue over the next two years, up from the current 9%, through new customer additions and product diversification into forgings, shaft components, and casting parts. Exports contributed 4% to FY26 revenue, with plans to increase this contribution in the next two years, leveraging secured orders from European Tier-1 customers.