Thanks, Shubham. Good morning, and thanks to everyone who have logged in to Automotive Axles 3Q FY26 Earnings Conference Call.

From the management side, we have with us Mr. Nagaraja, President and Whole-Time Director, Automotive Axles Limited; and we have Mr.

Raman K, Interim CFO of Automotive Axles Limited; and Mr. Kishan Kumar, who is Whole-Time Director, Meritor HVS India.

I would now like to turn the call to Mr. Nagaraja for the opening remarks, followed by Q&A.

Sir, you may begin now.

Thank you, Shailesh. Good morning, everyone.

Wish you a belated Happy New Year 2026. I have with me Mr.

Kishan, General Manager and President, MHVSL, and also Mr. Raman K, our new Interim CFO.

It was an exciting quarter. Started little bit slow, but momentum picked up, and I'm very glad to share with you that we were able to convert most of our order book.

To start with, Raman will quickly go through the financials, and followed by Kishan giving you an update on the market outlook for rest of the year, including how our new products are faring. Over to you, Raman.

Thank you, NG. Good morning, everyone.

Thanks for joining this call. I'll start off with the financial updates.

For the quarter ended Q3, our revenue was ₹562 crores, and including the other income, our total income stood at ₹570 crores, or 5,709 million. Our expense structure has been fairly stable over the past, and we have closed all our expenses at about ₹507 crores, leaving us with the EBITDA of 725 million, or ₹72.5 crores, which is at about 12.9%.

When you compare the sequential quarter, the revenue growth happened at about 21%, and the margin growth has happened at about 26%. We have, on basis points percentage, our margins grew by 52 bps quarter-over-quarter.

Maybe giving you a same year-over-year comparison, I think our revenue grew by about 6% year-over-year, and our EBITDA grew by about 14% year-over-year, and on percentage basis, it grew by 93 basis points. In this quarter, there is an exceptional item of about ₹12 crores, which was an impact on the wage code that we had to take.

The new wage code came into effect on 21st November. We assessed the impact based on the new wage definition, and basis our feedback from our stat auditors, we have taken the impact of about 119 million, close to ₹11.9 crores.

Considering that, our profit before tax is about 512 million, or ₹51 crores, which is at about 9.1%. Comparing to sequential quarter, we had about 10.4% PBT.

Considering this exceptional item, because that exceptional item had an impact of close to about 2% to the margin, but overall the margin has dipped only by about 1.3% quarter-over-quarter. Coming to the PAT, we ended the quarter about 388 million, at about 7% PAT.

Again, that has the impact of the exceptional item of ₹12 crores. I think these were the key highlights of the financials.

With this, maybe I'll turn over the call to Mr. Kishan for the market updates.

Thanks, Raman, and good morning to all. The last quarter was, like Nagaraja said, it started at a pretty reasonable average quarter that we have been seeing in the in the past several years, but after September, post the GST rate cuts, there was real traction in terms of demand, and this came from almost every OEM that we are partnered with, and which translated into a very strong quarter in terms of the volume.

There did have some change in the product mix compared to previous years, which was anticipated, and the overall if I can say the upturn in terms of percentage from where we started to where we ended, we were able to convert most of that. It was a significant ramp-up in terms of some of the products that we have launched recently, and I'm happy that it turned out pretty reasonably well.

Looking forward, the next quarter, which is this quarter, which is typically again a very high quarter in the financial cycle for the several past years, the momentum is going forward. We are expecting it to be better than last year, at least by 5% to 10%.

One thing that we are very closely monitoring is how the OEMs are maintaining their inventory. Far, it is in a very healthy level, there is a real conversion of sales, and I think we're very positive that this quarter will also turn out to be one of the best for the industry.

Thank you.

Good morning, sir. Congratulations on a great set of numbers.

I was just looking to understand our numbers a bit better. When we've said there has been a bit of product mix and we saw good volume growth, can you quantify the volume growth if possible?

How much of our top line growth year-on-year has come from volume and from pricing, if possible?

Thank you. Thank you very much for this.

I will probably also ask Kishan to add comments after that. For us, it's a little bit tricky and a bit difficult for us to quantify the overall growth, with respect to a specific product or product mix.

What I can tell you is the product mix has been positive, and our new product, what we have introduced, MS-185, that volume is getting traction, which along with the operational efficiency, which has really helped us, converting those additional sales. Kishan, would you like to add anything to that?

Yes. Thanks for the question.

The way we look at is, first is, whether do we have the full bandwidth when this product mix change happens. In this case, in the previous quarter, we were able to convert most of the upturn.

The 10% increase what we saw, 10% to 15% increase what we saw in the quarter, we had the products available, we had the capacity to ramp up to that level. Now, what it means to our financials in terms of number is, just as a comparison, again, tandem axles versus a single solo axle.

There is definitely a difference in the per axle realization because of the architecture, the content, and the fact that there is more meat, more material in the tandem. That impact is natural when the product mix change happens.

That is something we have been seeing for a long period of time. In nutshell, I agree with Nagaraja, it's with the mix that we see, this is probably going to be a normalcy.

This is what we have to be ready, and the agility that we have in our product portfolio and the capacity and the overall operations efficiency, is what is driving us to towards the right approach to manage this situation. Thank you.

Sir, if I could, I just had two more questions. One is, if you see Ashok Leyland's data, who, of course, is a major customer for us, I think 60% to 70% of our revenues would be coming from them, in the MHCV segment which we cater to, if you remove their bus volumes, they've been seeing almost 20%, 25% [unclear]...

Ms. Mehta, not audible.

You were not audible. Can you please repeat the question?

Yes. Am I audible now?

Yes.

Yeah. I was talking about Ashok Leyland being a major customer for us.

If I see their volume growth since November has been north of 20% only on the MHCV segment without buses, which, of course, we are we might cater to at some point, but currently, I guess, large chunk of our axles go into the MHCV segment. When can we see, that kind of volume growth come through for us, or would it not convert in the same way?

I can take this, Nagaraja. If I understand rightly, you're if we discount the buses, you're saying you're looking at a 20% 20% to 25% growth in Ashok Leyland MHCV segment.

Can I confirm that, please?

Yes. Yes.

Yes.

Right. I have not even seen the data, but going by what you're saying, if there is a change shift of 20% to 25%, that will translate into volumes considering where we have a single source, which means we are the 100% suppliers.

That is with us. We convert that completely.

That is what we did in the previous quarter. Then there is a common source where the customer has dual sourcing strategy.

They can buy either from us or the competition. That will decide or that will give you a comparison of their strategy versus how we grow along with their requirement or demand.

What we see is depending on what they demand, we need to be close to 99% delivery. That's the target.

That's how the numbers roll up when we look at our financials.

Understood, sir. Sir, could you give any indication on for how many products we would be a single-source supplier, even in percent even in percentage terms or ballpark?

Roughly 30% to 50% is it depends on the product mix again. Roughly 30%

to 50%. Got it.

Sir, lastly on our EBITDA margins, as we mentioned the product mix seems sustainable, these margins would also be sustainable for us, right?

Yes, I think so.

Yeah.

NG.

Raman, go ahead.

Yeah. When compared to last year, I think, as I explained, the margins have grown.

There is the mix is, as they mentioned, that is one very critical factor that helps us, maintaining the margins. You're right there.

Thank you so much for answering my questions. I'll come back in the queue.

Yeah. Thanks for the opportunity.

Sir, just adding to the earlier participant's question, I would like a more detailed and elaborated response on when do you expect the industry growth to reflect in our numbers? Because industry clearly for the last three, four months, be that key customers, even if we are, dual-source supplier to some OEMs, that should effectively reflect in our numbers as well, right?

Just wanted your thoughts on, how you see Q4 shaping up and for FY27, what kind of growth estimates are you all building in?

Kishan, you're taking that? It looks like Kishan has dropped off.

He will join. Let me try to answer this question.

As you can see there in the numbers, if I'm right, our top line has grown, almost by 21% 22% compared to the last quarter. We are expecting this one to continue.

Again, FY27 is, anybody's guess. While we are having a positive outlook in terms of stability, whether we can grow from there, it all depends on the inventory that, all the OEMs are going to end up at the end of this quarter, which probably, we'll get a much better outlook as we near the, last week of March.

Based on the, order book, we think that, this quarter is going to be stable and the next quarter will be probably a little bit flat, just like any other earlier years. The Q2, Q3, Q4 of FY27, we still waiting for the OEMs', outlook so that, we can align our capacities and supply chain to that requirement.

Sir, one more question from my side, that is, sir, I wanted to ensure, do we have the capacities to handle a 20%, 25% ramp-up in Q4, as well as let's say there's a further 8% to 10% jump in FY27 in the market? Will we be able to handle those capacities?

Last question would be on the new product, MS-185. Would like to understand more about that.

What is that product, where does it find its end use, and what traction are we seeing there? That's it from my side.

Okay. Kishan, are you there?

Yes. I got disconnected.

I don't know how much of what I was saying was Yeah.

Yeah. You want to take this call?

Hello. I missed the question.

Okay. Maybe I'll just add it up and then.

The thing is this: our current capacity utilization is around 80%. Again, our capacity is going to go up and down depending upon the product mixes and then, different configuration and, it keeps changing, almost on a weekly basis.

The current outlook, we can say that whatever the demand is there, we probably will be able to meet, most of the, requirement in the short term, unless there is a big change in the, weekly or daily bucket that changes. Capacity-wise, we'll be like we discussed about, we are investing it and, starting from Q1 FY27, and by Q3 FY27, we would have added all the capacities that is required for the, outer outlook of, somewhere around 500,000, MHCV segment.

With respect to MS-185, where it is used and their application and how the traction in the market, maybe Kishan can answer that.

Yes, thank you. It's definitely the trend.

I think we have spoken about this in the previous investor calls as well. The shift in the heavy-duty or high-tonnage vehicles, multi-axles into tractor-trailer, tandem into tractor-trailer, that's going to stay.

Now, where will it reach as a peak, that's anybody's guess today. We think with the share of business that we have with our customers and the plan that we have to ramp up and to meet that demand, we are in fact looking at a demand in 2030, it's five years or four years from today.

That is what our focus is. And 185 is very relevant to the industry, and that'll continue to see the growth.

Where it will stop probably is that, like I said, we will see in the in the coming years when the change in the powertrain, mainly the engine, that will start driving further change in the axle. We have a global portfolio ready for that.

Thank you.

Thanks for opportunity, and congrats for decent set of numbers, sir. Sir, your top line revenue growth was just 6% YoY versus industry growth of 17%.

You had also underperformed in the last quarter as well. Just wanted to understand, is it because of the change in the product mix due to slowdown in the tipper and higher share of the buses?

Just wanted to understand how long it will continue, when will start to outperform versus that industry? What would be the suitable tailwinds, when will start to show the numbers?

Let me answer this first. You are partially right.

The impact happens when our core, which I can say that the tandem and probably the high-tonnage axle, that shifts to a market segment where we are not strongly present, which is today the bus. There was definitely more buses in the last few months and even the previous quarter.

That is not the primary, only reason. The other reason which I was trying to answer in the previous question is, it's also what we do outside the MHCV.

Those markets also influence to some extent our top line. I was talking about the defense and off-highway, where we are present very limited part, and then the export, which has been, I would say, a considerable drop.

All these three, four things put together is why if you just look at MHCV growth and then compare with our top line growth, it'll never match. These industries behave differently.

It is not even just India, it is the global markets that also will have impact on some of these things.

Can you... Go ahead, Kishan.

The second question that you asked was how long this will continue. What is in our control is getting the product there, right?

That's been the focus. We have spoken about bus axle.

There may be a few questions on that. I'm not sure how many of you have seen an announcement that came in about a few weeks ago where the requirement or the mandate is beyond October '26, all the 9+ meter city buses, they have to be low-floor.

We are really evaluating this, what does it mean to the new product that we have in the pipeline. Once we have the clarity, I'm not saying we're stopping anything, it's just how the OEMs will take this and how their architecture will change, that'll define the overall powertrain and the impact on the axle.

Okay. Just wanted to understand the contribution of revenue from the MHCV versus non-MHCV segment, defense and export?

Raman?

Sorry, Kishan. Can I get that question again, please?

What is the contribution of MHCV versus non-MHCV segment revenue? To say that defense plus export.

Okay. See, our export has always been, in the mid-teens, and within the axle segment, predominantly, we are on on-highway segment.

That could be about maybe I would say the off-highway or the defense segment should make us about, another 10% within the axle segment. So, 90%

90% is the MHCV?

Correct, yes.

I'll slightly change that. It varies.

In the recent quarter, if you see, it may be 90% because there's a drop in export, off-highway demand, and defense demand. If all the industries or the other industries come back, it can shift 70-30 or 80-20 also.

Got it. Just wanted to understand, is slowdown in the tractor-trailer is also impacting the overall revenue of the company?

Because that in a tractor-trailer, there's a higher requirement of this axle versus that in a tipper, there's a higher requirement of the axle versus that tractor-trailer. Just wanted to understand, slowdown in the tipper segment is impacting overall revenue?

Yes, you are right. That has an impact.

Can you give me the mix of tractor-trailer, haulage, and tipper revenue in our overall revenue?

Raman,

We generally don't share the customer mix and the product mix because what Kishan was mentioning, it can dramatically change month-to-month, week-to-week. It becomes very difficult for us to segregate and then share that product mix.

Got it. Most probably the last quarter you had mentioned that tractor-trailer total mix is around 30%, 32%.

Most probably the tipper could be 50%?

Again, we don't want to speculate there. I would say that a good percentage of our last month production came out of our prime or prime axle portfolio, that is, tipper axles and then the MS-185.

My last question on that, in this quarter, many OEMs are saying that there's improvement in the demand of the tipper segment, and Ashok Leyland has also launched two new tippers. Just wanted to understand, because of the change in the outlook of the tipper, revenue growth can outperform of your company, as you are saying that a 20%, 25% growth in the next quarter revenue?

Let me correct that. I'm not seeing 20% to 25% growth, but what I am seeing is definitely it's going to be better than the previous quarter fours.

The tipper launches are there from the OEMs, and it'll keep happening. What I would like to end this question is, we are 100% present where there is a new launch with this customer.

Got it. Thank you, sir.

That's all from my side.

Hello, sir. Sir, just to ask very clearly, from all the earlier three, four questions which have been asked, we are a little bit concerned because when we look at the OE growth and when we look at your growth, there is a difference.

Is there any loss of wallet share with Ashok Leyland? Is there any loss of market share with Ashok Leyland, if you could just comment on that?

If not, then maybe you want to comment on the residual 35% of your business, because I think 60% of business is Ashok Leyland. What's happening in the residual 40% of the business for us to understand the deviation between the OE growth and your growth for this quarter or last quarter, whatever?

That would be very helpful, sir, for a more clearer understanding rather than running around the bush, sir.

Let me attempt this question again. If we look at it is not just one OEM.

Last quarter, I think every OEM had a higher demand. Against that demand, our delivery performance was in the north of 97%, 98%, which means to the capacity we had and what we could do to increase and maximize the additional volume that was in the market, we were able to serve that at the rate of 97%

to

98%. This did not result in any drop in the market share of our share of business with the customer.

Of course, there were

mix

changes where single source was the priority. As you understand, no line stoppage is expected, we were able to do that.

The second question is again, which comes again and again, if there was a way to plot our growth removing all other elements from the revenue, which is coming from non-on-highway or MHCV segment, then you will see that it is as on par with the industry growth, right? Provided there is no serious impact from the product mix, mainly the bus, because we've been saying that bus is one thing which we get impacted, and that is where our focus was in launching the new axle.

Whenever there is more bus, yes, we have an impact, but if it is the regular MHCV segment, and if you have seen our product portfolio, we are there from 7-ton all the way up to 70-ton, and every slicing that the market has, we have a product available, except the buses.

In this comment, it's fair to conclude that above 7, 7.5-ton, you are mirroring industry growth rate and you do not have any loss of market share with the main customer and, obviously, the other 30% of the business with some other customer. Is this a fair conclusion?

That is a fair conclusion. Even the other on-highway customers, we are able to meet their demand.

What is not in our control is the other segments, which will not show up in the top line because we don't give that difference of MHCV and the other segments. If you compare growth to growth, let's put it in the terms of number of axles, it is in line with what is the demand.

The other segment is what? Other than MHCV, that's what your reference is?

You have a MHCV business and a non-MHCV business, right?

That's right.

Non-MHCV business is what portion of your revenue?

It ranges depending on how the export market behaves. It can be 15%

to 25%. Whatever deviation...

It is a mix of export, defense, and off-highway.

Perfect. Whatever deviation that we are trying to gauge or see is to do with that 20% of the business.

Yes. Primarily export.

Export is I think it's not just us, I think most of the companies in this domain who are into export, they have seen this reduction.

Correct. Now from a course correction point of view, what do you see on this 20% of the piece, how does it shape up over the next one year?

In the nine-month, if you could tell us this 20% of the piece, what is the shrinkage in this 20% of the piece? If that one number if you give would be very helpful for us to solve this resolve this math.

Raman, I'll turn that question to you. I don't know if we can share that.

Because if one number if you see, if you give us one number, we can stop moving around the bush, we can come to some conclusion.

Maybe I'll try to just...

Yeah. Go ahead, Raman.

NG.

Yeah. See, overall, as we explained, right, the move with the export, can vary depending on a lot of circumstances earlier.

So...

Sir, we are not asking you for the reason. We are just asking you in nine months, what is the drop in the 20% of the revenue?

20% of the business, is there a shrinkage and what is the shrinkage?

See, I will just put it this way, maybe, see, out of the total wallet share, as Kishan mentioned, we have between exports and the other business, we have closer to about 20 somewhere it ranges between 15%

to

25%. When I see a total, nine-month window, this, again, depending on the quarter, there are a lot of other factors that come in.

That's that reason, we are not able to exactly give you how this movement happens, because you have the factor of all the macroeconomic stuffs and everything that's going on.

No problem. Hold.

NG, you

wanted to say something?

No,

nothing.

Please go

ahead. Correct.

One thing that we can assure is we have a complete understanding of how the market is working. I think we'll be in the range of 15% to 25% across in that particular export and the off-highway business that we have.

Perfect. I'm just concluding this: your 80% of the business, which is MHCV, there is no loss of market share.

You have to mirror the OE growth eventually, barring some distortions for a few months here and there based on who has what kind of inventory in the system. The 20% of the piece is where there are variations, and hence the overall revenue growth of Auto Axle at times doesn't mirror the OE growth which we are trying to do.

Correct? Are you constrained by capacity by any bit?

That's broadly right. Yeah.

Are you constrained by capacity for growth?

No. That's what I told, right now we are not constrained.

By Q3 FY27, will be completely, improved our capacity to meet the peak demand in the next three years.

Perfect.

Of course, one comment, assuming that we have been continuously trying to increase our share of business, right now with the kind of line of sight will not be running out of capacity.

Okay. Just three quarters back, my last question, you had talked about two products, 175 axle and 180 axle and a bus axle, which were introduced to your key customer and you were talking about a wallet share rise of about 2%, 3%.

What is a progress there on those new product lines with the customer? Here, we were actually looking at you increasing market share and growing faster because of this product line.

If you want to update us on this.

Sure. There are three products.

One is the brake, 394 brake, which we went into production end of December and this year. The way to look at this brake is this is the next trend, this is the future.

With all the shift that we are seeing, this is going to replace some of our existing volume. It may not be the additional share of business.

This is the trend that is in the industry, and that is why the brake is developed and it is in production now. The second product is it's for the tipper market, which is where our strength is, and this is also going into production this quarter.

It's going to be a pilot production and it'll get into a full SOP. Again, there will be some cannibalization of the existing tipper axle into the new tipper axle.

This is again a upgradation of the technology and making it more suitable for the market. The third product, which is the bus axle, that's the real product gap where we are not present.

This is almost it is ready, I will say it is ready, tested. The concern we have now is this latest mandate from the government that all 9+ meter city buses, they have to be low-floor.

We are re-evaluating what does it mean to the OEM, what will be their powertrain strategy, and then how this may or may not impact us. That's ready, but it's not ready for the launch because we really need to focus on what is the next change coming in.

Okay. Does the first two products, by virtue of their tech advancement, help you gain some share with your OEs, or it's just a continuity of business for you?

It is both, sir. It is both.

I would say it would be the continuity to a large extent because this is a change, this is a brake replacement. Then there is an additional, I would say, 5% to 10% opportunity where it can be applicated to the new vehicles where we are not present today.

The product can serve both.

Got it, sir. This was very helpful.

Thank you, and all the best, sir.

Thank you, sir.

Thank you.

Hello, sir. Thank you for taking my question.

Sir, most of the volume-related questions have been answered, I just wanted to enquire on the raw material side, cost side. Our COGS has improved in the last two, three quarters.

Do you expect this trend to continue, this gross margin improvement trend to continue?

I want to be a little bit cautious here because the way we are reporting our results has slightly changed because of the recent related-party transaction that happened, three quarters ago. Few numbers are kind of moved in and around.

You are right, we have been always focusing because 70+% of our cost is the raw material, we have been always focusing on that, optimize our supply chain, developing an innovative designs, lighter designs so that we can always continue to improve in that. That trend will continue, and as we also look at having a better realization by introducing a new products, so that number will be continuously you're going to see the improvement.

Also considering the nature of our product, okay, there is only so much that we can do, but there is an opportunity over next two to three years to improve in that area as high-performance, high-technology products are going to come in, so that COGS, cost of raw material is going to come down.

Got it, sir. Sir, on in this quarter, there is a significant jump in the other expense.

It has moved to over ₹81 crore versus 60-odd in the last quarter. Can you explain what is the increase in this?

I'll take this question. See, we have already explained, right?

We have the technical fee arrangement with Meritor, whatever is the revenue growth, to that extent, because it works as a percentage on the revenue, you will see the same amount, that will also move in the other expenses. Maybe that is one significant portion.

Given that revenue has grown by about 22%, you would, see a similar kind of a growth there. That's mostly about that.

Sorry, but if I look at YoY, revenue has grown much lesser than this growth in this other expense.

No, yeah, right. Last year, again, we don't have this technical fee arrangement, right?

It is only pertaining to this year. I'm just comparing quarter-over-quarter.

Where the revenue grew by 22%, the cost has also grown in the similar range.

Okay. In terms of Q4, you expect things to go better in our growth to be in line with OEM growth, or you think you will still continue to grow slower than the OEM?

Maybe NG, if you can take that.

I think Kishan has answered it. I think with the current product mix and then our share of business with all the OEMs and with a little bit of flat export and aftermarket outlook, I think we will be in line with the industry, barring those product lines where we are not present.

As long as the tractors and tippers they continue to grow, we will be keeping up with the industry or probably there is a good opportunity for us to also improve in other areas.

Sure, sir. Thank you, and all the best.

Yeah. Thank you for the opportunity, sir, and congratulations for great set of numbers in a challenging environment and constrained product portfolio.

What I would like to ask is that, sir, after this India-US FTA or the deal, whatever you talk about that, and this EU deal, what will be the benefits in the next three to four years for the company?

Thank you for the question. I will start.

Definitely we see this as a much-awaited positive move, both the European and as well as the North America or US specifically. I'll talk about the Europe first.

We don't see a major at least as of now the details available, we don't see a major movement in the way we are actually exporting into Europe, because it's more what we're seeing is the import benefits, which we are not, on our BOM cost if you see, we are almost everything locally, available, we don't see a big change there. Details are awaited, we have to really understand it from a more holistic way.

Coming to the US tariff, it's not just the tariff when it is US. It is it's important to understand what the market is, what is happening in the market there.

As we stand, beginning of February, I think if the market is still expected to be low, and when I say market there, the addressable market for us is in the commercial vehicles, the Class 8, which is the heavy-duty, that is where our strongest presence is. Until unless the market improves, the tariff alone will not drive any major shift.

What we're expecting is with this at least there is some certainty and clarity, and that should help the OEMs there to plan their supply chain, because everything requires four to six months. If they're expecting the market come back in H2, calendar year H2, they have to start putting things in action in March.

We are expecting that will start now. That dialogue has been almost like nothing till now because of the uncertainty, that will come back.

In the overall three- to five-years horizon, I think there are very good opportunities with the ramp-up and everything that we are doing in the plant, that will keep us ready when the market comes back there. Thank you.

Perfect, sir. Sir, starting FY27, can we expect a revenue growth of 10%?

After the new capacity comes in and all this deal starts to kick in in the next calendar year, can we expect a growth of 15%, something like that? Starting FY27 10%, and after that 15% revenue growth possible?

Again, let me take this question. It's more than the percentage, how we are looking at is in two ways.

One is do we have the right capacity and capability to meet the requirement, technical and the capacity requirement both. Second one is what will be the trade-off, if we have to do a trade-off, which we don't want to do, domestic market fluctuation versus the global market.

This is exactly the long-term strategy that we have in place. It is not the 10% or 15%, is it what is our ability to convert the upturn at the best rate.

That's how we are thinking about this, not just the number in the short term or in the one- to two-years horizon.

Perfect, sir. Any new product portfolio from the parent or any new product portfolio you are interest to in the introduced in-house?

I will read this as whether for the current market is there any new product required. Yes, I think the bus axle is the new product.

Looking at the future trend, five years now from now, engines getting into higher horsepower, we already have global products available. They are not localized because the market here is not ready.

When we see this happening, we will start the action of getting those localization plan in place, how we can make it more unique to India. This is something we have been doing for years and years.

The good example is 185. We knew 185 will be required in 2022.

We knew that it's going to be there. That's why we have a seamless launch of that product and we are ensuring that we are ramping up also in the same pace.

2032? 2022 not 2032, right?

No. 2022 we anticipated the MS-185, which is the hot cake now, that is required for the industry, and we had started all our work on that, and the product was ready at least one 12 to 18 months before the demand.

Great, sir. Best of luck for the future, sir.

Thank you so much.

Namaskar, sir, and thank you for this opportunity. Hope I'm audible, sir.

Yes, you are.

Yeah. Thank you, sir.

Sir, as in the discussion, is it clear for us that going ahead, the next year will be the first year where we will be seeing meaningful volume growth because of the fresh capacity addition? Is that understanding correct, first of all?

Let me just talk about this. See, we did not have any capacity constraints for the current market, volumes.

We did not lose any revenue because of the capacity portion of it. Like Kishan has always mentioned, it was a product mix in the industry and at the same time, other than MHCV, whatever the industry impact was there, that is what is kind of a slowing us down in terms of growth or matching with the MHCV, growth.

What we talked about the capacity is basically to look at the future capacity whenever the MHCV market and then export demands come back, next 6 to 12 or 18 months, we will be ready to convert those demands, without having to lose that potential orders.

Okay. Just to simplify it, in terms of tonnages, will there be additional tonnages that we will be adding to our portfolio, or will it only be product mix that is going to change that is also on the advent of demand going ahead?

Let me take this question.

Yeah. Go ahead, Kishan.

Tonnage. I think it will be, at least for the next 12 to 18 months, the tonnage will be the focus, but I think over that period, tonnage will not matter.

What will matter is, tonnage will remain, what matters is the top speed, efficiency, specific to axle efficiency, how much more further we can improve. That is when our next-generation axles will come into play.

Along with that, what the expectation based on the trend is, when we move the average horsepower of the vehicles, which is still in the 200 horsepower today, to 350, 400, that is when the next-generation high-efficiency products will be required. Tonnage, yes, it will remain where it is today.

That may not be a big movement there, because globally also we don't see anything operating on-highway more than 60, 70 ton. I think we have reached that, that is already done.

Now how to make it more efficient, that is the challenge in the industry. I think our portfolio from global experience, it's already there.

How to seed them, how to work with the OEMs, that's the focus we are having.

Hi, sir. Thank you for taking my question.

I have couple of questions. First on, I did some back calculation based on industry growth for our MHCV segment and non-MHCV segment, 20% sales contribution.

Is it correct that our non-MHCV sales has declined by around 20% YoY? That understanding should be correct?

There is definitely drop. I'll start with that.

Whether it is and I am not fully aware of what data you have used for your analysis, but internal analysis shows that it can be 5% to 15% now and also going forward in at least the next couple of months, because that the response I gave in the previous one of the questions...

5% to 15% growth, sir, or contribution?

No, the drop in the non-MHCV revenue. I'm talking about the drop in the export revenue, for example, is in the range of 5% to 15% for us.

Sir. Helpful to know.

Secondly, sir...

This is my second...

Yeah. Good morning.

Am I audible?

Yes, sir.

Thank you for the opportunity. I just wanted a small clarification.

For Q4, the comment was that it is expected to be better by 5% to 10% YoY. Is it in terms of sales, revenue numbers?

You are breaking off.

Hello. Am I audible now?

Yeah. The question was, for Q4, the commentary was that it is expected to be better by 5% to 10% YoY.

Is it in terms of revenue numbers?

I understand the question. Thank you.

It is the industry volume. We are looking at the industry volume.

The revenue will again be a mix of many things that we have been discussing in the previous questions.

Okay. It is a industry is expected to grow by 5% to 10%.

That's right, compared to the previous quarter, yes.

Okay. Thank you.

Yeah. Hi.

The question is that we mentioned about the new product on the bus axle side, and the regulation that is likely to start impacting our product itself. How much tweaking or anything that we anticipate and the timeline that we anticipate once this regulation kicks in?

As a continuity of this particular question, how much of the market share we expect to have for our current largest customer for this particular product itself all together? Any discussions that you've been having on this line as well?

Thank you. The regulation, what it states is from the October '26 onwards, it has to be a low-floor.

When we say low-floor, there is a number associated with that: 400. Now, what we're trying to understand further is this 400, whether it is a completely flat floor or there are steps allowed, because you may have already seen there are low-entry buses, low-floor buses with different architecture and different definition.

Second point here is once that is understood, OEMs will have to look at what tweaks, that you mentioned, right, what tweaks they have to do to meet this requirement. In this exercise, what we will figure out is our current axle, if you really see, it meets most of this 400, depending on how the 400 is defined.

We're trying to get that detailed analysis done. Second, say that we have figured it out and our current product line is matching the requirements, the expected penetration with our largest OEM may be 3% to 5%, because that is the only gap we see, it's 3% to 5%.

Let the third part to your question was if it is not meeting, the tweak, we don't know that yet, whether it's the totally different architecture, whether it will require a complete low-floor, which we have in the global portfolio, whether we need that, we have no idea right now. We are still trying to analyze this in a, detailed manner technically, and also understanding from the OEMs how they will approach this.

Each OEM may approach in a very different way.

Okay. Just to clarify, the 3% to 5% that you mentioned, it is the 3% to 5% market share of the buses portfolio that they have?

3% to 3% to 4% of, yes, our customer's portfolio. Yes, you're right.

Got it. Thank you.

Yeah. Am I audible?

Yeah. Sir, are we in any way losing what we can say losing market to OEM doing their in-source manufacturing for axles?

Is that a possibility? Is that happening in India, where the OEMs are in-house assembling the axles by procuring, let's say, the axle housing, the beam, and the shaft from various other domestic players?

When you,

let me start with what we are seeing globally. We're seeing globally OEMs are actually moving away from doing anything to do with axle.

We have examples in Europe and North America where discussions are going on where OEMs are asking us to do our axles, even including their own design, right? That's the trend, because the focus is on other technology and the other relevant value that they want to create on the vehicles.

Coming back to India, within our existing business, we have this model where we supply as a kit different parts. That's purely basically because of logistics, but every the entire content is ours.

It is not that the modularity what you're saying that doesn't exist in the industry where they pick something from somebody and then try to assemble it themselves, no. It is mostly content is from one supplier, but it is supplied in different conditions.

In the present moment, you're saying that the whole axle is what they look to procure from players like you, right, and not axle components being procured separately and in-house assembled. That would not be the case.

The answer is we are supplying the whole axle and we are also supplying the axles in kits to the same OEM. It is depending on the logistics, their plant capability, what they have in that location, based on that.

The answer is the full content at the vehicle level belongs to us. It cannot be that Supplier 1 or Competition 1 gives something, Competition 2 gives something, and they bring something else and make it a, it doesn't fit that way.

The architecture will be very different.

Just a follow-up on this, who's our current competitor in the domestic market? Who's our current competitor, biggest competitor, since you are dual source as well for many OEMs?

In terms of largest competition we have is the captive OEMs, where we have Tata Motors, Eicher, they do their own axles. If you look at from that way, they are the largest competition.

Of course, as an independent axle, brake supplier, we have multiple. We have Brakes India in brakes, Dana, American Axle, and some pieces in the off-highway segment, which is very small.

For Ashok Leyland?

It's the same names that I mentioned earlier.

Okay. Thank you.

Thank you.

Okay. Thank you very much, once again, having trust in Automotive Axles and continue to be our stakeholders.

Just to summarize it, the last quarter, it was exciting and we were able to convert it. The current quarter is also looking quite positive.

We will do everything possible to make sure that we convert this opportunities, and thank you very much for calling in, and have a great day.

Thank you. Thank you.