Talbros Auto.

Talbros Automotive Components Limited delivered a robust Q3 FY26, with consolidated revenue growing 8% year-over-year to INR220 crores. This performance was underpinned by improved demand momentum across all major vehicle segments, favorable macroeconomic conditions, and festive demand. The company achieved an impressive EBITDA of INR39.8 crores, translating to an 18% margin, one of its highest to date, attributed to operational efficiencies and a sharp product mix strategy.

The Gaskets and Heat Shields division, the largest contributor, achieved double-digit growth in Q3 FY26. Joint ventures, Marelli Talbros Chassis Systems and Talbros Marugo, also reported strong 25% quarter-over-quarter growth, driven by deeper OEM penetration. The Forging division, however, experienced a temporary slowdown in Q3 due to export-related issues in the European market, specifically with JLR and Dana's restructuring. Management confirmed these issues are resolved, expecting a 5% growth in Forging for Q4 FY26.

Talbros secured new orders totaling INR1,000 crores, to be executed over the next five years, providing strong revenue visibility. A substantial portion, INR700 crores, comprises export orders, including large orders from major OEMs. Additionally, INR100 crores of these orders are specifically for electric vehicle components, aligning with the industry's electrification trend. The Forging division alone secured a INR500 crores order from Europe, and the Gasket and Heat Shields business has INR250 crores in new orders over five years.

To support its growth trajectory and execute the new orders, Talbros plans a capex of INR150 crores for FY27, funded through internal accruals and borrowings. This investment includes INR115 crores for the Forging business to prepare for new orders, INR23 crores for enhancing Marelli's existing plant capacity, and establishing a new facility in Gujarat by year-end 2027 or early 2028 to cater to local customers. These capacity expansions are crucial given current utilization levels of 80-85%.

Exports are a key strategic pillar, contributing 25% to the company's revenue over the 9-month period, with a target to increase this to 35%. Talbros's export portfolio is well-diversified across the UK and Europe, benefiting from the India-linked EU free trade agreement. The company is strategically positioned to capitalize on global supply chain realignments, leveraging its engineering capabilities and cost competitiveness to deepen its presence in the global automotive ecosystem.

Management anticipates a stronger Q4 FY26, with expected year-over-year growth rates of 15% for Gasket, 5% for Forging, over 10% for Marugo, and 20% for Marelli. For the next financial year, the company targets double-digit revenue growth and aims for INR700 crores in Gasket business revenue. The consolidated top line is projected to reach INR1,400 crores by 2028, with a company-level target of INR2,000 crores, reflecting confidence in sustained demand and strategic initiatives.