Talbros Automotive Components Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Talbros Automotive Components reported a strong Q3 FY26 with 8% revenue growth and an 18% EBITDA margin, driven by broad-based demand and operational efficiencies. While the Forging division faced temporary export headwinds, joint ventures showed robust growth. The company secured significant new orders, including for EV components, and outlined a substantial capex plan for FY27 to expand capacity and support future growth, particularly in exports and new segments.

Highlights

  • Consolidated revenue grew by 8% to INR220 crores in Q3 FY26, driven by improved demand momentum.

  • EBITDA stood at INR39.8 crores, translating into an 18% margin, reflecting operational efficiencies and product mix strategy.

  • Gaskets and Heat Shields division delivered double-digit growth in Q3 FY26.

  • Joint ventures Marelli Talbros Chassis Systems and Talbros Marugo reported 25% quarter-over-quarter growth.

  • Secured new orders worth INR1,000 crores over the next five years, with INR700 crores from exports and INR100 crores for EV cars, providing strong visibility.

Concerns

  • Forging division had a slow Q3 FY26, temporarily impacted by export-related factors in the European market.

  • Gasket division's 9M FY26 sales growth was 4%, lower than Q3's 12% growth.

  • Forging division's 9M FY26 revenue slightly declined to INR219 crores from INR221 crores in FY25.

  • EBITDA for Forging division in Q3 FY26 was down to INR12 crores from INR13 crores in Q3 FY25.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹220 Cr
    YoY +7.8%
  • Consolidated EBITDA
    ₹39.8 Cr
    YoY +10.5%
  • Consolidated EBITDA Margin
    18%
  • Consolidated PAT
    ₹27 Cr
    YoY +12.5%

9M

  • Consolidated Revenue
    ₹648 Cr
    YoY +2.2%
  • Consolidated PAT
    ₹73 Cr
    YoY +7.3%

What they filed

Q1 FY27: revenue up 15.0%, net profit up 33.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue215 201 206 207 213 −1%214 +6%237 +15%238 +15%
EBITDA32 33 35 31 32 +0%33 +0%41 +17%39 +26%
Net profit20 19 21 18 20 +0%21 +11%25 +19%24 +33%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Q3 Revenue
₹350 Cr Total
  • Gasket Division ₹153 Cr 43.7%
  • Marelli Talbros Chassis Systems (JV) ₹90 Cr 25.7%
  • Forging Division ₹68 Cr 19.4%
  • Talbros Marugo Rubber Private Limited (JV) ₹39 Cr 11.1%

Order book

high confidence

Total value

₹1,000 Cr

as of 2025-12-31 quantified

Execution

to be executed over the next five years

Composition

Mix 3 segments
  • Forging Division (Europe) ₹500 Cr 57.1%
  • Gasket and Heat Shields ₹250 Cr 28.6%
  • Marelli Stellantis Business ₹125 Cr 14.3%

Share of order book by segment, derived from disclosed amounts

The company has secured significant new orders across various divisions, including exports and EV components, providing strong revenue visibility for the next five years. Commercialization will happen in phases.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹150 Cr New plan — to support growth and new orders across divisions · internal accruals and borrowings
    • Forging business (for new orders, includes machine, plant, machinery, building, infrastructure) ₹115 Cr
    • Marelli capex (capacity enhancement for existing plants) ₹23 Cr
    • New facility in Gujarat (to cater to Gujarat-based customers) ₹12 Cr
    Looking ahead, we are investing in capacity expansion to support this growth with utilization levels already high across divisions, approximately around 80% to 85%. We are looking to have a planned capex of about INR165 crores for the year '27, funded through internal accruals and borrowings. ... No, this figure of INR150 crores includes everything. ... For the forging and the stand-alone business required a capex of around INR115 crores. ... And second is the Marelli capex of INR23 crores. ... Plus we are planning to set up a new facility in Gujarat for this company to cater because we are getting orders, new orders we are getting from the customers who are based in Gujarat.
  • Debt Debt disclosed
    • New borrowing short-term requirement for forging capex ₹25 Cr
    We will take a little bit of debt to take care of the short-term requirement. ... INR25 crores, INR30 crores only.

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · Q4 FY26 · Medium confidence higher growth
    We are seeing this momentum to be even stronger in quarter 4 and expect a higher growth in quarter 4.

    — Anuj Talwar

  • Gasket Business Revenue Revenue · next year (FY27) · High confidence INR700 crores
    And next year, it can be INR700 crores, we can achieve this number because there are new businesses of Kia, which we will start from this month.

    — Anuj Talwar

  • Consolidated Top Line Revenue · 2028 · High confidence INR1,400 crores
    So that means INR200 crores of business would be adding '28. So is it reasonable to assume that by 2028, we would be doing around INR1,400 crores of top line? ... INR1,400 crores of top line in 2028.

    — Navin Juneja

  • Company Level Top Line Revenue · 2028 · High confidence INR2,000 crores
    Or is it fair to assume we will be doing INR2,000 crores of top line at the company level? ... On the company basis definitely. Yes, yes, easily.

    — Navin Juneja

Profitability

  • Consolidated EBITDA Margin Profitability · next 1 year · Medium confidence 16.8% to 17.5%
    But going forward for the next 1 year, I will say it should be between 17% to 17.5% somewhere. It can be 1 quarter, if it comes down to 16.8%, please don't worry.

    — Navin Juneja

Market Share

  • Export Contribution to Revenue Market Share · High confidence 35%
    So we've given a guidance that we will touch export of 35%.

    — Navin Juneja

Volume

  • Gasket Business Q4 FY26 Growth Volume · Q4 FY26 · High confidence 15%
    This quarter, in Gasket business, I'm expecting a growth of 15% as compared to last year in Q4 versus Q4, if I talk about.

    — Navin Juneja

  • Forging Business Q4 FY26 Growth Volume · Q4 FY26 · High confidence 5%
    In Forging business, I'm expecting growth of 5% because it starts moving now and it was flattish last year.

    — Navin Juneja

  • Marugo Business Q4 FY26 Growth Volume · Q4 FY26 · High confidence 10%+
    In Marugo business, I'm expecting again 10% plus growth in this business.

    — Navin Juneja

  • Marelli Business Q4 FY26 Growth Volume · Q4 FY26 · High confidence 20%
    And in Marelli also 20% growth in this business.

    — Navin Juneja

Market context

  • Consolidated Revenue Growth Revenue · next financial year · High confidence double-digit
    So I am targeting double-digit revenue growth definitely for next financial year but I can't give you an exact number.

    — Navin Juneja

What to watch in Q4 FY26

Forging Division Revenue Growth

Next quarter (Q4 FY26 results)
Current Q3 FY26 flat growth, 9M FY26 slight decline
Target 5% growth in Q4 FY26

Why it matters

To confirm resolution of export-related issues and return to growth for a key segment, validating management's recovery outlook.

In Forging business, I'm expecting growth of 5% because it starts moving now and it was flattish last year.

Risks & concerns

  • Forging Division Export Slowdown

    medium

    Temporary impact on Forging division due to export-related factors in European market (JLR issues, Dana restructuring), now resolved.

    Management acknowledged

  • Commodity Price and Currency Fluctuations

    medium

    Can cause temporary dips in EBITDA margins, but managed through product mix and price corrections.

    Management acknowledged

  • Order Book Execution Delays

    low

    Past instances of order cancellations/deferrals, but current capex is tied to specific, phased orders to mitigate risk.

    Analyst addressed

Q&A highlights

8 direct
Gaskets & Forgings Export Mix Direct
In the Gaskets, 15% come from export. And the forging, my export percentage is around 55% is export.

Clarified the export contribution for key segments, which helps understand revenue drivers and exposure to international markets.

Asked by Shikha Mehta

Forging Division Slowdown and Recovery Direct
Yes. I'll just give you more clarity on the Forging. Forging export is 56% and this is a direct export. And we have an indirect export of BMW and other European car manufacturers, which is to the extent of 30%. So 85% to 90% is export this business directly, indirectly. There is a little bit of tapering in demand in the BMW business this year, plus JLR, which we're directly exporting from here got impacted to some problem. ... Now that problem has been resolved. Now it is back online.

Explained the reasons for the temporary slowdown in the Forging division (JLR issues, Dana restructuring) and confirmed that these issues are resolved, indicating expected recovery.

Asked by Shikha Mehta

EBITDA Margin Sustainability and Future Outlook Direct
So I can't give -- I wish it should be 20%. There are a lot of stuff we are controlling product mix that is a part of operation. It will keep on doing that. But going forward for the next 1 year, I will say it should be between 17% to 17.5% somewhere. It can be 1 quarter, if it comes down to 16.8%, please don't worry. It will come back again because some price increases happen, like currency has gone haywire.

Provided guidance on future EBITDA margins, acknowledging potential temporary fluctuations due to commodity prices and currency, which is crucial for profitability assessment.

Asked by Shikha Mehta

Localization of Parts and Import Substitution Direct
We are working on that. In fact, we have given to the OEM some of the products, which are at import substitution at a cheaper cost. They are in the process of testing but they are also in the -- that is primarily what happens only Gasket and nowhere else.

Confirmed the company's efforts in localization and import substitution, indicating potential for new revenue streams and cost efficiencies once products are approved by OEMs.

Asked by Shikha Mehta

Non-Auto Segment R&D and Diversification Direct
We recently entered in the recycling business, as you know that. This, I think, directly or indirectly linked with auto. But the consumption is there in basically tire companies, manufacturing compound companies, et cetera, wherever it is in all segments, be it industrial, be it this home consumer like everywhere rubber is being used. So we have entered that. And at present, we are focusing on this sector only.

Revealed the company's entry into the recycling business, indicating diversification efforts beyond traditional auto components and exploring new growth avenues.

Asked by Shikha Mehta

Capex Deployment and Readiness for Demand Direct
Yes. Of course, we are already ready for that. The process has been started because this capex will happen from 1st January till 31st March '27. There is 15 months capex. The major capex is in the Forging business, we need to get ready for our new order. And this is the first one, which will happen very, very fast. And second is the Marelli capex of INR23 crores. This is primarily for enhancing the capacity of the existing plants. Plus we are planning to set up a new facility in Gujarat for this company to cater because we are getting orders, new orders we are getting from the customers who are based in Gujarat.

Provided a detailed breakdown of the INR150 crores capex plan, its timeline, and how it aligns with preparing for future demand and new orders, including a new facility in Gujarat.

Asked by Shikha Mehta

Gasket Business FY27 Revenue Target Achievement Direct
To our Gasket business, we have done in the 9 months business of INR430 crores, okay? If we add INR160 crores, it should be between INR590 crores to INR600 crores for the year-end. And next year, it can be INR700 crores, we can achieve this number because there are new businesses of Kia, which we will start from this month. Next full year is there with us, plus new businesses we have entered export businesses, which will be converted to commercialization next year.

Clarified the path to achieving the INR700 crores Gasket revenue target for FY27, citing new client wins (Kia) and conversion of export businesses, which provides confidence in future growth.

Asked by Preet

Order Book Execution and Risk Mitigation Direct
Sir, first of all INR1,000 crores means INR200 crores per annum, okay, approximately. So for that, we are doing this capex because what capex we are doing, whatever the businesses we are looking next year numbers, we need to start the production, etcetera, etcetera. We are doing capex of this for that. I just explained the major is Forging, we got INR100 crores per annum order. We are doing a capex, which includes machine -- plant and machinery, also a little bit capex on building.

Addressed concerns about order book execution risk by explaining that the INR1,000 crores order book is phased over five years and capex is specifically tied to these orders, ensuring alignment between investment and demand.

Asked by Preet

2 min read 6 chapters

Detailed narrative

Strong Q3 FY26 Performance Driven by Demand Recovery

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.

Segmental Performance and Forging Division Recovery

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.

Significant New Order Wins and Future Revenue Visibility

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.

Strategic Capex for Capacity Expansion and EV Readiness

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%.

Growing Export Focus and Global Market Integration

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.

Positive Outlook for Q4 FY26 and Next Fiscal Year

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.

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