Rane Holdings Limited

Rane Group experienced a mixed yet encouraging Q2 FY26. Rane Madras reported a total revenue of INR 923.4 crores, marking an 8.4% increase compared to INR 851.8 crores in Q2 FY25. The group's EBITDA margin improved by 18 basis points, reaching 9% from 8.8% in the previous quarter. The automotive industry saw a cautious start due to subdued consumer sentiment, but momentum picked up in the latter half, driven by the festive season and the rollout of GST 2.0.

The Passenger Vehicle segment maintained its growth trajectory, supported by new launches and stable rural demand. The Commercial Vehicle segment continued positive growth, fueled by infrastructure activity and increased government spending. The 2-wheeler segment was the standout performer, achieving record sales in September, though electric 2-wheeler growth was impacted by rare earth magnet shortages. The Tractor segment also maintained strong performance due to favorable monsoon conditions and improved rural incomes.

Despite overall margin improvement, the Brake Component division (erstwhile RBL) faced margin deterioration due to significant raw material cost increases that could not be fully passed on. Rane Steering Systems Limited (RSSL) continues to operate at a low EBITDA margin of approximately 4%, a result of historical pricing decisions and high bought-out component costs. Management is implementing new margin improvement initiatives, including synergy buying and cost reduction for raw materials, with results expected from Q1 of the next financial year, targeting a double-digit EBITDA margin of 11-12% for Rane Madras.

The ZF Rane joint venture's Occupant Safety business demonstrated strong performance, growing 11.5% in the first half of FY26, with expectations for continued double-digit growth. The Steering Gear division also saw sales increase to INR 231 crores in the current quarter from INR 200 crores in Q2 FY25. However, the Commercial Vehicle steering business experienced low single-digit growth. A reported discrepancy in the share of associate profit was clarified as due to the elimination of intercompany profit from Rane Madras inventory during consolidation.

The group is actively focused on debt reduction, aiming for INR 200-300 crores reduction by the end of FY26 and into the next fiscal year, with a more specific target of INR 250-300 crores over the next 18 months. So far, INR 115 crores has been received from the Velachery land sale, which is part of a larger INR 350 crore transaction. Capital expenditure in H1 FY26 exceeded INR 90 crores, which contributed to slower debt reduction in the first half. Rane Holdings aims to achieve zero debt.

Rane Group is strengthening its capabilities in electronics and software integration, lightweight materials, and sustainable manufacturing to remain a trusted and future-ready partner for OEMs. The company aims for a Return on Capital Employed (ROCE) of over 20% for its controlled entities. Management expressed optimism for strengthening demand across all key segments in the second half of the fiscal year, supported by India's position as a global auto component hub.