Menon Bearings Limited — Q3 FY26 earnings call

As I've told you last time also in the earnings call, we have already started additional business with one of the major customers from U.S.A., that is Allison Transmission, and that alone business has added value of more than ₹2.5 crores a month. Apart from that, Federal-Mogul DRiV is also there, and other customers also added in the fold of our company so far as exports are concerned. So we hardly have any impact due to the tariffs imposed by the U.S.A. On the contrary, our exports are poised to grow further in future as well.

Explains the drivers of strong export growth and clarifies minimal impact from tariffs, highlighting key customer wins and future growth potential.

Asked by Bhargav Buddhadev

Apart from that, we focus on product mix improvement, yield, then yield optimisation and then cost efficiency to mitigate impact. And we are constantly having a vision on the raw material prices and to ensure that through the process improvement and yield improvement our margins will not be affected to the greater extent. Maybe some dent can be there, but it will not have a major impact due to passing off the burden on the customers as well as reduction in the raw material consumption and process improvements.

Addresses a critical sector-wide concern, detailing strategies like partial pass-through, process improvements, and customer relations to maintain margins, and mentions moving to monthly price revisions.

Asked by Bhargav Buddhadev

Yes. Actually, now we are almost reaching ₹1 crore every month in Brakes. We are continuously working on our marketing. There are two OEMs. I won't take the names now, but we have gone and had very positive discussions with them. Maybe by next meeting, we can give you more maybe business also might start or we'll give you more positive news on that. And regarding railway, we're still in the dynamometer like already start ordered the dynamometer, maybe three to four months for the dynamometer. So maybe by next one year, we'll see a more huge growth in Brakes business.

Provides an update on a nascent but high-potential segment, indicating significant progress and future growth drivers including railway and two-wheeler segments.

Asked by Bhargav Buddhadev

In Menon Bearings, bushing and washers, we are around 90% and in aluminium, aluminium castings we are around 65%. And Brakes, we are around at 60%, 65%. So there is still a lot of room for future expansion. Like we can like what numbers we have given for 2027, we don't have to go for a major new capacity.

Gives insight into current operational efficiency and future growth headroom without requiring immediate major new capital expenditure.

Asked by Raghav Maheshwari

See, benefited from strong execution, healthy OEM demand and stable export orders. While we may not see the same growth rate every quarter, we believe the current run rate is sustainable. Over the medium term, we expect growth to be in line with industry trends supported by exports, new customer additions and gradual improvement in the replacement market.

Explains the factors contributing to improved profitability and provides confidence in the sustainability of current margin levels, linking it to broader market trends.

Asked by Raghav Maheshwari

You see in some of the components where we were not having a good amount of value addition, we have taken a conscious decision to part away with those components. And at the same time, we are in the process of developing almost eight parts for domestic companies. And that business is likely to grow further and the mix-up of the business of export and domestic will remain same. The pie will remain same over a period of time.

Clarifies a strategic shift in the Alkop segment to focus on higher-value products and new domestic developments, even if it means a temporary decline in some existing domestic business.

Asked by Himanshu Upadhyay

You see, we have already given the order for dynamometers and another two, when we ordered last time to one of the manufacturers of dynamometers, but unfortunately since he had to leave the country and go to U.S.A., he could not complete that. Because of that, it is delayed. We have now given to another manufacturer and he has given the assurance that it will be completed within a period of four months from now.

Addresses a specific operational challenge impacting a key growth area (railway business) and outlines the steps taken to resolve it with a new, clear timeline.

Asked by Shubham Jain

On a consolidated basis, the cash conversion, whatever you are telling you, it will drop down from 180 days to almost 30 days. That is amazing we can save much so far as interest is concerned on working capital. At the same time, while we will be saving huge costs on account of interest, because of ex works, we will have to shell with some of the margins so far as shipment costs are concerned, tariff is concerned, then interest is concerned. So maybe around some of the business will be impacted by 15% probably. But at the same time, margins will remain same because we will be reducing the cost by about 20%. On the contrary, 5% margin will be increased.

Highlights a significant operational efficiency gain and financial benefit from shifting export terms to ex-works, improving liquidity and profitability, and detailing the expected margin impact.

Asked by Raghav Maheshwari