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    Uniparts India Limited

    UNIPARTS
    Automobile and Auto Components·21 Nov 2025
    Management Summary

    Uniparts India reported a strong Q2 FY26 with revenue growing 14.6% YoY to ₹283 crores and EBITDA expanding 53% YoY to ₹63.9 crores, leading to a 22.6% EBITDA margin. The company remains net debt-free with a healthy cash balance and a robust new business pipeline of ₹200 crores. While the global off-highway market shows signs of stabilization, particularly in construction, the North American large agriculture segment remains soft.

    Highlights

    5

    • Q2 revenue of ₹283 crores, reflecting 14.6% year-on-year growth.

    • Q2 EBITDA stood at ₹63.9 crores, up 53% year-on-year.

    • EBITDA margin expanded to 22.6% in Q2.

    • Company remains net debt-free with a net cash balance of ₹226 crores as of September 30, 2025.

    • New business awards pipeline robust at around ₹200 crores.

    Concerns

    3

    • Global economic slowdown, geopolitical uncertainties, evolving trade tariffs, persistent inflation, and elevated interest rates remain key monitorables.

    • North America large agriculture market continues to be soft with a forecast of high double-digit degrowth.

    • Aftermarket growth is subdued in Europe due to higher inventory and in the US due to past tariff impacts, though recent ruling is positive.

    What Changed2

    vs Q3 FY26

    Guidance items5 → 11 (+6)Risks discussed3 → 4 (+1)

    Key financials

    Single quarter

    07 metrics
    1. 01Revenue₹283 Cr+14.6%YoY
    2. 02EBITDA₹63.9 Cr+53%YoY
    3. 03EBITDA Margin22.6%
    4. 04Net Cash Balance₹226 Cr
    5. 05Operating Cash Flow₹34 Cr

    Segment breakdown

    Construction
    40% Share of Total Business
    Large Ag
    17% Share of Total Business
    Small Ag
    25% Share of Total Business
    Warehouses (Channel)
    50% Share of Sales
    Direct Exports (Channel)
    25% Share of Sales
    Local Sales/Production (Channel)
    25% Share of Sales
    List

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    ₹6 crores

    Debt

    Net ₹-226 crores

    Returns FYTD

    ₹139.25 crores

    Liquidity

    Cash ₹226 crores

    Company is net debt-free with robust cash flows.

    Guidance & targets

    11
    CategoryTargetPriority
    Growth
    Overall Growth
    double-digit growth
    		High
    Growth
    Aftermarket Segment Growth
    single digit
    		High
    Growth
    Overall Growth
    mid-teens growth
    		High
    Growth
    Overall Growth (vs. end market)
    7-10% over our end markets
    		High
    Growth
    New Business Contribution to Growth
    11-12%
    		High
    Growth
    Large Ag (North America)
    double-digit degrowth
    		High
    Growth
    Overall Growth
    better
    		High
    Profitability
    EBITDA Margin
    18%
    		High
    Profitability
    EBITDA Margin
    20%
    		High
    Profitability
    Normalized EBITDA Margin
    18-19%
    		High
    Revenue
    Peak Revenues
    FY27 or mid-FY28
    		Medium

    North America Large Ag Market Bottoming Out

    Next quarter / FY27
    CurrentSoft, high double-digit degrowth in FY26
    TargetSigns of bottoming out, potential for growth in FY27

    Why it matters

    Improvement in this large segment is crucial for overall growth recovery.

    FY26 will see double-digit degrowth, but hopefully💬 the bottoming out will happen and then we will start seeing growth in FY27.

    How to verify

    key_financials.segment_breakdown[name='Large Ag'].metrics[label='Growth']

    Risks & concerns

    4
    RiskSeverity

    Global Economic Slowdown & Geopolitical Uncertainties

    Listed as key monitorables alongside trade tariffs, inflation, and interest rates. — Management acknowledged

    medium

    Softness in North American Large Agriculture Market

    Forecasted high double-digit degrowth due to subdued commodity prices, high input costs, and high second-hand inventory. — Management acknowledged

    high

    Aftermarket Growth Subdued by Inventory & Tariffs

    European aftermarket customers have higher inventory, and US aftermarket faced tariff impacts, though recent ruling is positive. — Management acknowledged

    medium

    Persistent Inflation and Elevated Interest Rates

    Listed as key monitorables impacting the global environment. — Management acknowledged

    medium

    Q&A highlights

    8

    “our material cost as a percentage of revenue, typically, it is in the range of about 35% to 37%. And this has eased to about 32.5% in the first half and in the Quarter 2, it was about 30.5%. This is largely due to the rupee depreciation, which has improved inventory valuations across our US and European businesses.”

    Explains the significant margin expansion, attributing 85-90% to FX movement and the rest to product mix/tariffs, and clarifies one-time OPEX increases.

    asked by Viraj

    2 min read7 chapters

    Detailed Narrative

    01

    Q2 FY26 Financial Performance Highlights

    Uniparts India delivered a strong Q2 FY26, with total revenue reaching ₹283 crores, marking a 14.6% year-on-year growth and a 1.3% quarter-on-quarter increase. EBITDA for the quarter stood at ₹63.9 crores, up 53% YoY and 11% QoQ, with the EBITDA margin expanding to 22.6%. The company maintained a net debt-free status, holding a net cash balance of ₹226 crores as of September 30, 2025, and generated ₹34 crores in operating cash flow.

    02

    Industry Overview and Segment Performance

    The global off-highway equipment market is stabilizing, with construction equipment showing encouraging signs, driven by AI infrastructure spend in North America and green power focus in Europe. The North American large agriculture market remains soft, facing high double-digit degrowth, while European large agriculture is faring much better. Small Ag markets, particularly in India and Europe, show better outlooks, with India expecting 4-7% tractor volume growth.

    03

    Gross Margin Expansion and Operating Expenses

    The company's gross margin reached historical highs in Q2, with material cost as a percentage of revenue easing to 30.5% (from 35-37%). This improvement is primarily attributed to rupee depreciation (85-90% impact) and to a lesser extent, product mix and tariffs. Operating expenses saw a slight increase due to actuarial valuations and one-time📎 expenses. Management expects normalized EBITDA margins to be in the 18-19% range, with a long-term target of 20%.

    04

    Strategic Outlook and New Business Wins

    Uniparts continues to focus on deepening customer partnerships and expanding its footprint in large agricultural and construction segments. The new business award pipeline remains robust at ₹200 crores in annualized potential value, reflecting strong customer confidence. The Mexico warehouse became operational in October 2025, enhancing customer delivery capabilities.

    05

    Capital Allocation and Shareholder Returns

    CAPEX outflow for Q2 was ₹6 crores. The company remains net debt-free with a net cash balance of ₹226 crores, demonstrating robust cash flows. The board approved and paid an interim dividend of ₹37.7 crores for FY26, along with a special dividend of ₹22.50 per share, totaling ₹101.55 crores, paid in October 2025, reflecting a commitment to disciplined capital allocation.

    06

    Tariff Impact and Dual-Shore Manufacturing Model

    The dual-shore manufacturing model (India and Mexico) provides flexibility and risk diversification, mitigating tariff-related challenges for US customers. Management confirmed that tariff impact🌐s are managed to be P&L neutral through transparent customer agreements. A recent US government ruling reducing duty on certain tractor parts from 50% to 25% is seen as a positive for the US aftermarket segment.

    07

    Inorganic Growth Strategy

    Global inorganic growth remains a core part of Uniparts' strategy, focusing on areas like fabrication, hydraulics, and PTOs. The company seeks strategic acquisitions that unlock value, are ROE/ROCE-accretive, and help extend system boundaries, rather than deep turnaround stories. Despite dividend payouts, the company's debt-free status and cash position ensure it is not constrained in pursuing suitable acquisition opportunities.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.