Good evening to everyone and welcome to Q3 and 9-month FY26 earnings call of ASK Automotive Limited. From the management, we have with us Mr.

Kuldip Singh Rathee, Chairman and Managing Director; Mr. Prashant Rathee, Joint Managing Director; Mr.

Aman Rathee, Joint Managing Director; Mr. Naresh Kumar, Chief Financial Officer; and Mr.

Manoj Sharma, Chief General Manager, Investor Relations. Before we begin the call, I would like to mention that some of the statements made during the call may be forward-looking in nature and hence it may involve risks and uncertainties, including those related to the future financials and operating performance of the company.

Please bear with us if there are any call drops during the course of the conference call. We would like to ensure the call is reconnected at the earliest.

I would now like to hand over the call to Mr. Kuldip Singh Rathee, Chairman and Managing Director, for his opening remarks.

Thank you, and over to you, sir.

Thank you, Mr. Rishabh.

Good evening, ladies and gentlemen. It's my great pleasure to welcome you all to our Q3 and 9-month FY26 earnings conference call.

I hope you have had the opportunity to review the detailed presentation submitted to the exchanges and available on our website. The Government of India's GST 2.0 reform marks a pivotal milestone that is set to elevate the Indian automobile industry and energize the broader economy, given the sector's deep forward and backward linkages.

Now, let me begin by sharing a quick overview of the broader industry as reported by SIAM. The Indian automobile sector witnessed healthy momentum in 9 months FY26, with overall vehicle production across all segments registering a robust year-on-year growth of 9.3%.

The two-wheeler segment matched the overall vehicle production growth at 8.8% on year-on-year basis. We are optimistic that the growth momentum will remain in the coming quarters as well, supported by stable macroeconomic conditions and GST 2.0 reforms that have improved overall affordability and consumer sentiment.

The two-wheeler industry closed 9-month FY26 with a strong production volume of 19.6 million units, up from 18 million units in 9-month FY25. In Q3 alone, production touched 6.8 million units, as compared to 5.9 million in the same quarter last year.

Looking ahead, we believe that the industry will continue to gain from the far-reaching macroeconomic policy reforms undertaken by the government, particularly GST 2.0 reforms, personal income tax rationalization announced in the Union Budget 2025-26, successive rate cuts and liquidity enhancement measures by the Reserve Bank of India. These have positively impacted consumer purchasing power and improved access to the vehicle financing, created a conducive environment for the sustained demand.

Rising rural income will also be beneficial for the two-wheeler sector. Since all our products were under the category of 28% GST, hence the reduction of GST rate from 28% to 18% is helping us to outgrow in the Indian aftermarket and gain more market share from grey market operators and duplicators.

With this positive background, we remain optimistic about the growth trajectory of the sector in the coming quarters. Before we move on to ASK's business performance, we would like to highlight that our 9.9 MW solar plant at Sirsa, Haryana, has started supplies from April 2025.

We are excited with the results in terms of sustainable operational economies. Happy to announce that company is installing one more captive solar power plant of 11.55 MW at Rajasthan, which is expected to be operational by Q1 FY27.

This reflects ASK's special focus on green energy. Moving on to business updates.

I am delighted to share with you that we had a strong finish to the third quarter and 9 months of the year in both revenue and profitability. This marks our ninth consecutive quarter of robust performance since the company's listing.

During Q3 FY26, we delivered revenue growth of 28%, excluding wheel assembly business. The wheel assembly strategic reduction was 51.5%, and thus our consolidated published revenue has grown by 18.5% on year-on-year basis.

We achieved growth of 26.8% in EBITDA and 21.3% in PAT on year-on-year basis. This is the highest ever absolute revenue, EBITDA, and PAT earned by us in any quarter in the past.

We continue to outperform the two-wheeler industry in terms of vehicle production growth during Q3 FY26. Further, we have achieved the EBITDA margin of 13.4% in Q3 FY26, representing an improvement of 88 basis points over Q3 FY25.

Our EBITDA margin is affected by aluminium alloy prices. Upward increase in prices of aluminium affects our EBITDA percentage because of denominator effect.

However, our absolute EBITDA number remains the same. With this strong performance on profitability, our earnings per share in Q3 FY26 has increased to ₹4.05 per share against ₹3.34 per share in the same period last year.

Improvement in margins is mainly driven by better economies of scale due to higher volumes, benefit from increasing capacity utilization at Karoli and New Bangalore facility, and strategic reduction in low value-added wheel assembly business. As a result, in 9 months of FY26, we delivered revenue growth of 18.6%, excluding wheel assembly business.

Because of wheel assembly strategic reduction by 52.8%, the consolidated revenue, which is published, has grown by 10.2% on year-on-year basis. Achieved growth of 21.9% in EBITDA and 18.8% in PAT on year-on-year basis.

We have delivered EBITDA margin of 13.5%, an improvement of 130 basis point on year-on-year basis. With strong performance on profitability, our earnings per share in 9-month FY26 has increased to ₹11.45 per share against ₹9.64 per share in the same period last year.

Our all three product segments performed well in Q3 and 9-month FY26 in terms of revenue growth. We have sustained our market leadership position in the advanced braking system.

Our advanced braking system revenue grew by 22% in Q3 and 12% in 9-month FY26 on year-on-year basis. The aluminium lightweighting precision solution revenue grew by 36% in Q3 and 24% in 9-month FY26 on year-on-year basis.

The safety control cable revenue also recorded growth of 22% in Q3 and 10% in 9-month FY26 on year-on-year basis. In the unstable global geopolitical environment due to tariff and other issues, our revenue from exports were at ₹100 crore against ₹108 crores last year in the same period.

However, based on Q3 FY26 performance, we do feel that we'll touch the last year's number. Thank you very much for your patient hearing.

With this, we leave the floor open for question and answer.

Thank you, sir, for the opportunity. Congratulations to you and the entire team for the strong numbers.

My first question was on the capex side. The new capex of ₹35 crore and increasing the capacity to 32 crore brake shoes and pads.

How much would now the total capex be for FY26 and also your thoughts on FY27 capex? Even for FY26, if you can also provide a breakup of capex, that will be very useful.

We will close the FY26 capex. We had planned ₹450 crores initially in the FY26.

However, we try to economize wherever it was possible. Then another capex of ₹40 crores we did for to set up the solar power plant, which was not scheduled initially.

With this extra capex, but still we'll close the capex at ₹500 crores.

Noted, sir. How do you see it for FY27?

FY27

capex will be less. We intend to be within limits of ₹400 crores only.

Got it, sir. On brake pads, approximately what would be your market share?

See, the brake pads' overall market is less than that, our market share should be around between 10% to 12% or something.

Got it, sir. Congratulations on the performance on exports in this quarter.

You had earlier spoken about the Ford order. Would that be commencing by end of FY26?

How do you see that Ford order commencing and ramping up over FY27 and '28? Also because of this order, would you expect FY26 exports to be flat?

See, FY26 exports, as I mentioned, will be flat. However, the exports to Ford have already started.

The containers are going. Because of the great uncertainties created by the tariff issues, not only by US, but also by Mexico where some parts were going, and they have also imposed higher 50% duties, so.

Still we are very hopeful that since our product is highly technical, we feel there'll be some smooth supplies in the FY27.

Got it, sir. Just a last question.

Can you share how was the utilization at Bangalore and Karoli plant this quarter?

Yes, sir. In this quarter, we have reached between 75% to 80% capacity utilization in the Bangalore plant.

Now it's almost fully operational Bangalore plant. The capacity utilization in Rajasthan plant remains at 65% only because in that we are waiting for some new items to be started, which are likely to start in the H2.

Got it, sir. Thank you.

Thank you so much and wishing all the best.

Thank you, sir.

Yeah. Hi, sir.

Congratulations for the strong set of numbers. I had two questions.

First question is related to the margin. Our alloy wheel business is 50% of the revenue currently, and aluminium prices have gone up, but we don't see the much of impact on the margins.

Have we taken any price increases in that?

No, Mr. Naveen, we have not taken any price increase so far.

The margins that you see is already down by at least 30 to 40 basis point because of the aluminium price increase. The revenue has gone up by that much, and the EBITDA margin has come down by 30 basis point.

What you see the EBITDA margin in this quarter of 13.4% would have been 13.7% or 13.8%, had the aluminium prices have not sky

rocketed. Okay.

The second question is on the same frame alloy wheel business. We have done that Japanese collaboration, and how is that progressing, sir?

That is progressing pretty well. We are going to take out the first product in February, before February end.

There'll be testings for few months and we hope to start the supplies in the start of H2.

Okay. Thank you, sir.

That's it from my side.

Hi, sir. Thank you for taking my question.

Sir, two questions. One was on the commodity prices, sir.

How are we tackling this increased commodity inflation, especially on the aluminium side? Do we have any hedge or is it a pass-through?

How should we look into that?

The aluminium prices are pass-through month-on-month, we are not very much affected on that account. That's what we said that the absolute EBITDA numbers remaining the same, only the percentage of the EBITDA has gone down by 30 basis point.

Sir. Secondly, sir, our new plant which we are setting up, this will be again solar, will be powered by solar.

Is there any extra incremental capex because of the solar situation, because the cost of solar panel has gone up? Can you confirm the incremental economics there?

No, we are not incurring any extra. There's no impact because the project is getting almost complete.

All the supplies had already come before the price increase. This new solar plant will be set up within the stipulated budget.

Okay. Sir, is it possible if you can give us an outlook for the remainder of fourth quarter and going into FY27, a slight breakup for the two-wheelers, especially in the rural and urban side?

That will be pretty helpful. No,

as regards the coming quarter is there, we have very strong projections from the OEMs and even the independent aftermarket is looking very, very good because of the GST reduction from 28% to 18% in our line. We are very bullish even on this Q4.

As regards the next year, we are very bullish on that because we feel that this two-wheeler story will continue because it has started continuing only after a gap of many years. Even the next year seems to be very good.

Sir. Thank you.

Hi, sir. Thanks a lot for the opportunity.

Sir, a few questions. First to begin with on the alloy wheels itself, while you've alluded some timelines to our Kyushu Japanese JV, if you can throw some light on the Leo, the Taiwan JV that we were working for.

Any progress on that front? That would be my first question.

Taiwan the thing is going on well. That's under testings.

There were a few amendments to be done. We have already done those amendments.

I have explained it in every call that this being a safety item, any hurried call we cannot take. Let the customer take the call, but we are very confident that all the results will definitely come in the Taiwan collaboration also, positive results will come.

Okay. Sir, the second question is about the sunroof cable JV that we did and then some sort of supply was expected from 1H FY27.

Where are we on that journey? Is it on track or is there any initial letters of commitments by the OEMs, if you can throw some light there?

We are very much on track on that. Already the machines have come, the set up and is there and I think all our samples etc.

Production will come out in the Q2 of FY27 and the supply should start in the H2.

Sir, by roughly what would be the addressable revenue size for us because?

Addressable revenue size is not too big. Addressable revenue size is about 100 cr.

That's all. See I told in that last call that we don't do many things just for the sake of money.

We take pride in saying that this is a Atmanirbhar Bharat project and we'll be the first one to indigenize in the country.

Surely. Sir, the last question is about the AISIN JV.

There also we had commented about some appointment of some 40, 50 odd dealers for aftermarket TV penetration. Where are we on that aspect?

That is ramping up now slowly and gradually. Maybe in the first quarter of next year, we'll break even in that.

Okay. Sir.

Thanks a lot for this.

Thank you.

Good evening, sir, and congratulation for the great set of results. I just wanted to know your view on any update on the draft ABS regulation, which were meant to be implemented by the 1st Jan.

Do you have any update on that?

Now there is no update from the government. I think it was a draft which is now hanging because on the request of the OEMs.

Also in the quarter 3, we have seen that the two-wheeler ICE segment growth outpaced the two-wheeler EV segment. Mainly maybe because of the GST benefit, the ICE segment is doing better in the two-wheeler side.

Do we expect this trend to continue going forward?

You are right because now that the gap is very less because of the GST reduction. That way, I think ICE sector is rather in a stronger position.

What are your expectations for the Q4 two-wheeler production growth estimates? Have you revised it higher as compared to the last time?

We know our projections. We always say we will grow in mid-teens and we'll be growing in mid-teens.

Sir. Thank you from my side.

Debt levels, our debt equity never increases 0.5 and we will remain below that in spite of the extra expenditures on capex that will be increasing this financial year. It's always one year of EBITDA normally, it's close to that.

I just also wanted to understand what would be your ideal capacity utilization across your various plants on a blended level?

See the economies of scale come when we are overall 80% capacity utilization. We love to do that.

However, we put up the next plant much before because we are suppliers to all our prestigious customers and direct online and just in time supplier. We keep always some extra capacities.

Okay.

Good evening, sir, and thank you for the opportunity and congratulations for very good numbers. Sir, just wanted to understand the growth in the ABS segment and the ALP segment that we've reported.

Ideally, in the braking segment, we usually have some growth around the two-wheeler industry, but this time it's much much higher. If you could help us with the reason and also the aluminium segment has grown a little higher than our run rate for the last two, three quarters.

Just the reasons for that and do you expect that these growth rates will sustain?

See, there has been an impact on the Indian aftermarket. As I have mentioned many times that the reduction of GST, we were unfortunate to be on the 28% bracket.

Now that it has come down to 18%, we are giving a tough fight to the grey market operators which are prevalent in the country. I think we are grabbing more and more share from them.

That there is a very huge growth in the Indian aftermarket. That's the main reason.

Plus, our ICE OEM players, their duty was also reduced from 28% to 18%, their numbers have also increased tremendously. In the Q3, even they grew by 15%.

Similar reasons apply for the aluminium segment?

Aluminium segment, we have similar reasons, or even otherwise there so the work can come from anywhere, that's a very flexible and great opportunity. That is why we call it the sunrise industry.

Got it, sir. Got it.

Thank you, sir. Thank you.

Sir. Am I audible?

Yes, please.

Yeah. Sir, thanks.

Congrats on the good set of numbers. I just wanted to get a picture on after the GST rate cuts, how is the sentiment going on with the OEMs?

Are we seeing any particular better demand from two-wheelers or PVs or anything like that? If you could just give some thoughts on it.

See, after the reduction in GST, two-wheeler demand is really picking up, both at the OEM level and the independent aftermarket level. It has been a real big boost to the two-wheeler sector.

Okay. Sir, if not in Q4, but FY27 onward, do we expect some revision in our growth guidance from mid-teen digits to somewhere around high-teen digits or anything like that?

Or do we expect some more?

We always expect mid-teens and we are happy to achieve that. Because, see, we are outgrowing the market.

You will appreciate that. Even this year, in spite of such good times, the two-wheeler sector in 9 months has grown only by 8.8%, and whereas we have grown substantially higher.

Right, sir. Sir, if I could just ask one more thing.

With the ABS thing going on, if the draft has not been announced by the government, what is going on with the OEMs right now? What is the sentiment with the two-wheeler manufacturers?

We had any conversation with them and is there any kind of thing you have discussed on how?

No, no. I've repeatedly said that we'll talk on this hypothetical question and we'll discuss when the final notification comes because our OEMs are already in discussion with the government that it's not practical.

Let the result come out of that.

Because

we are not aware what they are discussing with the government.

Okay. Thank you, sir.

Yeah. Thanks for the opportunity, and congratulation on great set of numbers.

I wanted to know about your EBITDA margin guidance, since we have ramped up the Bangalore facility and Rajasthan facility is expected to ramp up. Are we thinking of revising our estimates upwards going in FY27 or are we maintaining around 13.7% thereabouts?

No, we had given a guidance of 13.7%, but that gets affected at least by 30 basis point because of the denominator factor of the aluminium price increase. That 13.7% becomes 13.4% and we are very hopeful that we'll try to maintain around that only in the next financial year.

Okay. You highlighted that the aluminium prices are a pass-through on a month-on-month basis.

Eventually the margin will come back to what we were guiding for initially. Is that understanding correct?

No, no, that understanding is not correct. The contribution that we get for doing the job remains the same.

When the aluminium prices go up, the EBITDA margin's percentage goes down, but the absolute EBITDA remains the same.

Okay. Got it, got it.

That's it from my side. Thank you.

Sir, thank you for the follow-up. Just want to confirm about the launch pipeline for the new products in the next year.

We have sunroof, we have two programs of alloy wheels. If you can just confirm when can we expect commercial production or mass production for both?

Both the programs we'll be launching in start of H2.

Okay. Okay.

Both elements, the element with Taiwan, the one element with the Japanese company, both will come in the second half only?

Yes, second half they can come. They will come in second half after due testing.

Even this sunroof cable will also come. That will also come.

Sir,

generally, how much time does it take for the full ramp-up? When can we expect?

We are prepared from day one. We are prepared today also because we have already invested everything.

Once that testing is complete, then we'll immediately gear up.

Okay. Thank you, sir, and all the best for.

Thank you. Thank you.

Yeah. Thank you so much for taking my questions and congratulations on good sets of numbers.

Sir, my first question is on wheel assembly business. By when can we expect that this would kind of completely phase out?

The customer has assured that by March end, the balance will also go, which is about 48%. Let's see.

Once the customer takes it back, we'll be announcing in the next call. If the customer takes it back in March, then next year also you will see the same presentation from our side that actual, excluding wheel assembly, this is the growth, and without wheel assembly, published is this much.

All right. Thank you, sir.

Sir, my second question is on your ROCE. You are currently delivering 27%, 28% of ROCE and despite capacity utilization of your two plants at lower levels.

What do you expect, can ROCE go ahead from current levels, or 27%, 28% is something which could kind of build in?

I hope, Rishi, you are satisfied with 27% ROCE. That's a tough job to achieve, which we are achieving.

Second thing, I would correct that one plant has already gone to 80% capacity utilization, only one is left now at 65%. ROCE will remain.

This will be difficult to maintain 27%, but we make all-out efforts to maintain 27%.

Okay. Sir, lastly, just the clarification.

Would aluminium inflation would lead to roughly 2% revenue inflation as well, or it would be less than that?

Certainly. Certainly.

One side it leads to revenue inflation, the other side it leads to reduction in the percentage of EBITDA margin, not the absolute, but percentage of EBITDA margin.

Okay. Quantum would be just 2% roughly, right?

Three three, you can say 3%.

2% to 2%

to 3%, yeah.

Okay. Thank you so much.

Thank you, everyone, for such a patient hearing, and I would like to once again reassure you that the future looks very bright. As you know that I am always an optimist, our Q4 is going to be very bright, and even the next year seems to be very good.

On that positive note, I would like to end and thank you. Thank you very much once again.