Thank you, Danesh. Good evening, ladies and gentlemen.

We welcome you to the first earnings call of Tenneco Clean Air India Limited. Today, we will be discussing the results for the quarter and half year ended 30th September 2025.

I take this opportunity to introduce the management team. I have with me Mr.

Arvind Chandra, Whole-Time Director and CEO, Mr. Manavendra Chhabra, Chief Financial Officer.

The presentation on the business and financial performance is available on the company's website and on the website of the stock exchanges as well. We will begin with Mr.

Chandra providing a business update, followed by Mr. Chhabra covering the financial results.

This should approximately take about 15 minutes, after which we will open the floor for Q&A session of about 45 minutes. With that, I would now hand it over to Arvind.

Yeah. Thank you very much, Roopali.

Good evening, everybody. First, let me start by wishing you all good health and happiness.

Let me be the first to wish you a very happy new year for 2026. Thank you all for joining us for Tenneco Clean Air India's first earnings call as a listed company.

This is a very important moment in our journey, and the strong IPO reception with subscriptions of over 61 times reinforces the trust placed in us by customers, our partners, and now our shareholders. As we begin this new chapter, our focus remains on strengthening the business through consistent execution and building on the capabilities that have shaped our performance over the years.

Tenneco India has always had a clear and simple purpose: to be the most trusted partner of and the world's best manufacturer and distributor in the transportation industry. We engineer and manufacture the critical systems and products that make mobility cleaner, safer, and more comfortable.

Our product portfolio spans two integrated pillars: Clean Air and Powertrain Solutions, where we support OEMs in increasingly complex emission, efficiency, and durability requirements; and Advanced Ride Technologies, where our suspension and ride performance systems play a central role in delivering comfort and handling, especially as the India market continues to premiumize in the coming years. These pillars come together through a shared engineering and manufacturing backbone, reinforced by global R&D support with 5,000+ patents and four decades of experience operating across the Indian automotive market.

Being part of the Tenneco Group gives us the scale and engineering depth of a multinational leader, enabling us to bring cutting-edge technology and manufacturing best practices into our India operations. We have established a strong market leadership across our four product categories.

In Clean Air, for example, we lead the market in India for commercial trucks and off-highway OEMs, while in Advanced Ride Technologies, we are number one in the supply of shock absorbers and struts for passenger vehicles. This leadership is a result of decades of manufacturing excellence and sustained collaboration with OEMs across segments.

What differentiates our model is the way this ecosystem is structured. We bring global R&D, local application engineering, simulation and testing, and manufacturing together with a unique operating model across 12 plants and two R&D centers located close to OEM bases.

This gives us the ability to make more affordable products, which our customers want, reduce validation costs, pursue lightweighting technologies, and enable faster time to market. In manufacturing, we bring high safety and zero-defect processes discipline in our continuous endeavor to be the most trusted partner for our OEMs.

This approach has helped us build longstanding partnerships of an average of 20 years with the country's major passenger, commercial vehicle, and off-highway OEMs, and these relationships continue to strengthen as their platforms evolve and require more advanced content. When we look at the broader industry, the trends are very supportive.

Demand for passenger and light commercial vehicles in India is good, driven by a shift towards larger and more premium models, rising expectations around safety and comfort, and increased disposable incomes. Stricter emission standards are also raising the need for more advanced Clean Air and powertrain solutions across all vehicle segments.

In parallel, India is emerging as an important export hub for global OEMs, thanks to our engineering talent, competitive cost base, and resilient supply chain. These shifts align very closely with our strength and strategy to be the export hub for the world for both third-party exports and to our global plants.

With our leading positions in several of our core product areas, our exports already reach 20 countries and are poised to grow further. Financially, we delivered a solid performance in Q2 and H1, with value-added revenue growing 8.9% and 8.2% year-over-year, and clearly outperforming the served applicable market growth.

Our EBITDA and PAT margins remained at strong levels throughout the period, demonstrating the quality of our earnings and the inherent resilience of our operating model. On capital efficiency, we continue to post numbers in cash conversion cycle, free cash flow generation, debt to equity, and ROCE numbers that are industry-best in class.

Mahendra Chhabra, our CFO, will walk you through the financials and the key drivers in more detail. Now, I'm also very happy to report that we have secured important strategic wins of 98.4 billion INR, which is 98 9,840 crores in incremental lifetime bookings, including 17.6 billion INR of exports, which is about 1,760 crores.

These are on top of the 43.8 billion value-added revenues from FY '25, which is 4,380 crores. These are additive to that.

These bookings include a strategic Clean Air business entry into a leading Japanese passenger vehicle OEM, which was previously untapped white space for us. It also includes another major Advanced Ride Technologies win with a prominent Indian OEM, thereby further securing our number one position in shock absorbers in India.

These bookings represent lifetime value-added revenue potential from awarded programs, which are yet to start production, and materially enhance the company's revenue visibility over the next five to six years approximately. Finally, I want to acknowledge the contribution of our people.

The strength of Tenneco India lies in its engineering and manufacturing teams: the engineers, the technicians, the operators, the supervisors, the managers across our various sites. They are the ones who ensure precision, reliability, innovation, and continuous improvement every single day.

As we have transitioned into a listed company, their daily dedication, the velocity of decision-making, and the tenacious execution remains the bedrock of our culture and hence, our performance. With that, thank you once again for your time.

I will now hand you over to our Chief Financial Officer, Mahendra Chhabra, who will take you through our financial performance for Q2 and the first half of FY '26. Mahendra, over to you.

Thank you, Arvind. Good evening, everyone, and thank you once again for joining us in today's call.

Let me walk through walk you through the financial highlights of Tenneco Clean Air India Limited for quarter two, as well as H1 FY 2025-26. Keeping this discussions aligned to our value-added revenue or VAR, which is our most appropriate representation of our operating performance, given the pass-through nature of substrate or precious metals.

It has been a strong quarter and a strong half year as far as financial performance is concerned. I'll start with quarter two first.

For quarter two For quarter two FY 2025-26, value-added revenue stood at 11,515 million, a growth of 8.9% year-on-year, and it has been supported by stronger customer demand across key programs, both in domestic as well as export markets. EBITDA for the quarter was at 2,168 million, up by 5.7% year-on-year, with margin strong margins at 18.8%, while PAT was at 1,507 million, up by 9.9% year-on-year, and the in terms of percentage, it was at 13.1%.

Reported revenue from operations for Q2 was 12,806 million, up by 9.6% year-on-year, reflecting steady momentum across the business. That In terms of half one FY 2025-26, our value-added revenue was 23,181 million and a growth of 8.2% year-on-year.

In both the periods, quarter two, as well as H1 FY '26, our growth exceeded the served market growth of PV, CV, OH, and industrial, which grew 5% in quarter two and 4% in H1, underscoring the strength of our demand profile. For H1, EBITDA was 4,457 million and a growth of 6.6% year-on-year, with strong margins at 19.2%.

PAT for the half year was 3,188 million, 10.9% up year-on-year, with margins at 13.8%. For the first half, revenue from operations stood at 25,663 million, growing 5.2% year-on-year.

Our profitability in H1 reflects the benefit of top-line volume growth, product mix improvement, operational and capital efficiencies, and PAT margins expanded by 30-odd bps year-on-year. This was aided by the stable raw material cost and higher interest income during the period.

These factors collectively supported healthy financial performance, both for quarter two as well as H1 FY 2025-26. In terms of operational and capital efficiency, we maintained a strong return on capital employed profile and continued to operate with negative working capital intensity.

Our cash conversion cycle for half one stood at -22 days, underscoring the capital-efficient nature of our business model. We continue to stay debt-free and have been meeting all our requirements in terms of capex as well as working capital through internal accruals.

Further, we have very healthy fixed asset turnover ratio, which is resulting from the efficient capital investment through standardization and modular approach in manufacturing. Looking at our segments, Clean Air and Powertrain Solutions delivered revenue of 5,702 million in quarter two, growing 3% year-on-year, while Advanced Ride Technologies delivered 5,813 million, up by 15.4%.

This has been supported by overall volume growth and increasing demand for dynamic suspension components and continued momentum in exports. On the balance sheet, we continue to operate with financial discipline.

Operating cash flow for the half one was 11,220 million, supported by our efficient working capital cycle. Capex for the period stood at INR 246 million, and that is in line with planned investments across our facilities as well as localization roadmap.

Just to summarize the financial performance, for Q1 and H1 FY 2025-26, it demonstrated steady revenue growth, consistent profitability, and continued balance sheet strength. Mix optimization and operational discipline supported our margins, while a capital-efficient model enabled strong ROCE and a negative working capital cycle.

With that, we believe the business remains well-positioned as we move into the second half of the year. Thank you, and with that, I would hand it over to Roopali.

Hi. Am I audible?

Thank you for the opportunity, and congratulations on the great set of numbers and the bumper listing. My first question is related to the export order book.

Could you please help us understand the execution timeline of it and also outline which products are part of this order and the key markets or the location you'll be supplying to? Thanks.

Is that Ravi?

Yes, Ravi. Yeah.

Hi, Ravi. Nice to meet you.

Very good question. Look, like I said, we've had a very, very good order booking cycle, right?

If you look at our order booking formula. Everything that is not in production and has been booked as of September 30th, 2025, right?

These are lifetime revenues, right? Typically in automotive, we know a program life is five to seven years.

Obviously, commercial trucks might be a little bit longer, some can be a little bit shorter, overall five to seven years. Our exports order book comes in two parts.

One is the exports to third-party OEMs, and the second one is exports for our own Tenneco India exporting back to Tenneco global. Right now the good thing is we're seeing exports on both sides, Clean Air and Powertrain as well as ART, which is Advanced Ride Technologies business.

We are booking business fast. A lot of these bookings are coming from third-party exports.

I, obviously, cannot reveal the customer names because we don't have the permission yet. Suffice to say that exports is going to grow much, much, much faster than our domestic business simply because we're starting from a low base.

If you remember in our road shows and press conferences, we always said, look, we started from a low base of only 5% product exports, and now already if you look at our Q2 numbers, we're already somewhere around 7% or 8%, right? That percentage of exports as part of the total pie is growing slowly, and the other great thing about exports is exports are coming in at nice margins, right?

As the nice margins come in, the product mix will also help us improve our margins over time. Now typically it takes about a year, year and a half to kind of test the product, validate it, homologate it, and then into production.

You would expect to see a lot of these start to come in in late '26, '27, '28, and so on. That's why it's because we have a longer sales cycle.

Obviously, I cannot give specific customer names and so on, but all I will say is that, a, they are growing faster than domestic business at a very high CAGR, b, they are more profitable, and they include both Clean Air and Powertrain and the Advanced Ride Technologies business, and including full products, as well as you can call it semi-finished, subassemblies, components, like for example, Advanced Ride Technologies there's products like rods and sintered parts that will actually benefit even our European brothers and sisters division to be more competitive as they buy from us and then sell back to their OEMs, right? That's also another area of growth.

As third-party exports go, Tenneco India through Tenneco global in terms of full finished goods, look, as well as semi-finished, subassemblies, and components. That's why it's so exciting for us, because India obviously has the labor arbitrage, right, the advantage of the lower labor cost.

Also, because of technology equalization, right? 5, 10 years ago, India was always behind technology, but now in both Clean Air, Powertrain and in Advanced Ride Technologies, if you look at what products we sell to our local OEMs in Clean Air, for example, which is BS VI.2, the same product with the same technology and the same legislation can also be exported to Europe as part of Euro 6, right, and their own version of real driving emissions.

Same thing on the shock absorber, Advanced Ride Technologies side, right? We can also export the same technology like the semi-active suspension that we're selling to our Indian OEMs also to our European OEMs.

It's a very exciting phase for us, and thank you for asking the question, Ravi.

Thanks for that detailed explanation. My second question is regard to the margin.

What were the margin for the Clean Air segment and the Advanced Ride Performance segment in this quarter? Also if you can share full-year guidance or directional outlook on the margin front?

Thanks.

Okay. Ravi, hi.

This is Mahendra. As far as the BU-wise margins margins are concerned, we as a management team have not yet closed on that.

We we would be disclosing the margin at an overall level, not at an BU or the segments level. If you've answered about the like margins at a business unit level.

In terms of the full-year guidance on the margin, so as we have got listed very recently. There are certain costs related to operating as a listed public limited company, for example, management costs, the statutory compliance costs, and other costs like related to legal, IT, and all.

We expect EBITDA to be a bit soft, but with the increasing the best revenue in the coming years, these additional costs will get absorbed as we progress and we'll come back to the same levels. Hope that helps.

Thanks. Thank you so much.

I'll fall back in the queue.

Hi. Sir, thank you for taking my question.

My first question is on the capacity expansion side. You highlighted earlier that you'll be extending capacity almost doubling the capacity over next 3 to 5 years.

Can you just talk about where are we right now and if we are putting up new plants or just expanding in the current capacity, maybe separately on Clean Air and suspension both?

Yeah. Thanks, Vipul, for asking the question.

This is Mahendra. Good news is the order book visibility that we have and that we have disclosed.

Considering the growth plans and order book visibility that we have, we would be investing in the expansion both for capacity increase and also in the expansion related to technologies. We know especially in Advanced Ride Technologies, this technology is from conventional to semi-active suspension system, we have to invest towards that as well.

We would be investing in line with our growth plans that we have, including putting up the new plant in the coming years. Right.

Any plant [unclear] Yeah, sorry. Sorry, Vipul.

Just to finish that, also, some of that capex growth, right, will also come from transfer of capex from other Tenneco regions into India simply because we can make it much cheaper and more affordable out of India, right? That way we get the benefit of the lower capex.

That's one of the reasons why if you notice, our ROCE numbers are always very, very high, right? Very exciting, very nice numbers.

It's a combination of normal volume growth of India, which is the expansion capex, then there's technology-related capex, which is related to more advanced dynamic suspension, for example, or into gasoline particulate filters for GPF. The other thing is the capex transfer that happens from moving a lot of the equipment from maybe Europe and other regions to India and then exporting back from here.

That again gives us nice margins and we're very excited about that, yeah. Just to add to that, again, the way we do the capital investment, you look at the way our FAR is.

Our capital investment has always been pretty efficient through standardization and modular approach. Since we do not have any debt and we're kind of generating good cash flow generations, we intend to meet all our capex requirement in the coming years from our internal accruals.

Sure.

Understood. Thanks for that detailed answer.

My next question is on the export side. Will you be disclosing your exports numbers going forward, maybe separately for you gave regular numbers for Clean Air and suspension separately.

Will it be possible to give separate export numbers as well for both segments?

I think that's not a bad idea. I think that's a good suggestion.

I think we can look at it. Right now because we're just starting our journey, right?

Vipul, if you remember from the road shows and the press conferences, historically with Tenneco, if you go back let's say a decade, exports was never a focus. It was always local for local, right?

It was Europe for Europe, US for US, China for China. Now for the first time in Tenneco India has become Tenneco India for the world, which means clean export.

If you're competitive, you can export to third-party OEMs, and you also get to support other regions to enable them from being competitive, right? The Tenneco Europe benefits from having Tenneco as a supplier of everything from subassemblies to components to even finished parts, right?

At some point, I think when we get some critical mass, we could possibly separate that. In any way, right, it's a very, very exciting story for us, and that's what makes us grow our business much, much faster because it is the labor advantage plus technology equalization.

Also, don't forget many customers themselves, right? If you look at the Western OEMs, are all pushing for India to be an export base.

By default, the business is being forced to come to India just because Western OEMs are asking for a contingency planning, they want to diversify their supply chain risk. That also benefits us, right?

Very good question. Let's think about it.

I think it's not a bad idea, but let's aim for critical mass. Once we have some good bookings, we're starting to see a lot of export bookings, I think once that solidifies into a nice number, we could possibly separate that and show that in future earnings

calls.

Thank you.

Actually, that would be really really helpful if you can give order book as well in Clean Air and your ART division. That will be really helpful just to understand because both businesses are very different in nature.

That will be really helpful. That's all from my side.

Understood. Thank you, sir.

Thank you.

Hi, sir. Am I audible?

Yeah. Yeah.

Congratulations on a great listing. A couple of questions.

Largely on the order book side. The 9,800 crore order book, majority is from the domestic.

Number one, this is because we booked certain projects from the Japanese OEM in their business. Is that a major chunk of potential business that we can get from them?

I'm just trying to assess that is there a potential to significantly increase our order wins in that specific OEM's wallet share?

Yeah. The 98.4, right?

So 9,840 crores, right? That is lifetime revenue, it represents all booked business before September 30th, 2025, that are not yet in production, right?

It is a pretty long laundry list of many, many acquisitions or many, many business wins. The reason we called out the Clean Air business win with this Japanese OEM is because it is so strategic for us that getting a foot in the door of this OEM opens us up to a huge opportunity in terms of growth in terms of market share, right?

The fact that this customer said, okay, you can be part of our supplier panel gives us that entry. Yes, to answer your question, huge opportunity for growth in Clean Air because of this strategic So that's why we call it a strategic win in the white space.

White space is an area where we've never been allowed to play in for whatever historical reasons, but now that we are a key member of the panel, we are allowed to play and also grow and participate in RFQs, etc., etc. This is a huge win for us.

The other win being consolidating our position at a very, very well-known Indian OEM for shock absorbers. We're basically constantly inching our way up the market share, right?

We're already number one in shock absorbers. We're kind of taking it to the next level slowly, slowly, slowly, slowly, adding a few percentage points of market share is what's happened.

I think shock absorbers we're already about 52% you would have seen from the DRHP to the RHP. That 48% already gone to 52% market share, which is again from CRISIL, right?

CRISIL has given us that. Anyway, I think to answer your question these wins are very strategic and allow us to grow faster in the next few years, yeah.

Is it fair to assume that these order wins are not counted in the lifetime order book? No,

they are. They are all part of the 9,840.

The reason we just called them out is because these two wins have the ability to take us further into the panel in a bigger way, right? Some order books are more let's say visible and successful for us than others, right?

Sure. Secondly, on the export front, more of a group thing, we're expecting export growth to be much, much higher than the domestic growth.

Is this group that we're expecting largely because they're consolidating the global operations in India and making India the export hub, or is it incremental order wins in the wallet share of existing customers around the globe?

It's all of the above. Let's start with third-party OEMs, right?

By the way, some of it is not even to do with costs, right? It's global OEMs, Western OEMs saying that, hey, Tenneco, we want you to put more business into India because we want to source product out of India for export to either an engine plant at a customer or a assembly plant at the customer, right?

This is coming from an edict from the customers themselves saying we want to use India as an export hub, right? Because again, it's you can call it a China+1, sort of a diversification strategy, and this comes from post-COVID when there was a big supply chain issue.

If you remember the years after COVID, there were huge supply chain issues and they don't want to be in that situation anymore. Why is India a great export hub?

One, access to engineering talent, access to operations talent. India scales much better than any other country after China, right?

Also, the big resource raw material, the ability to get at a affordable cost. That is driven by third-party OEMs, okay?

Now even internally to answer your question, even internally, yes, there is going to be consolidation in the Tenneco Group, but don't forget the Tenneco Group is a $17-18 billion company, right, in terms of total revenue, and in terms of value-added revenue, it's around 14 billion or so. Still, 14 billion compared to our size, we are only about 500 million versus the corporate value-added revenue of 14 billion, right?

There is a lot of opportunity for consolidation. There is a lot of opportunity for labor cost arbitrage.

There is a lot of opportunity for bringing business to India and using it as an export hub to support our own Tenneco operations in Europe and the US and help them become more competitive. Don't forget that even Western OEMs are putting a lot of price pressure, right?

Price, price, price. It's all about cost with the latest technology, right?

We in India can be a very good supplier of these either components, subsystems, assemblies, and even finished products. My job is to make sure we have technology ready, and luckily we happen to have excellent R&D centers.

We have two state-of-the-art R&D centers for Clean Air, Powertrain and for suspension, what you call Advanced Ride Technologies. Because of the strength of the local engineering team, the application engineering team, we are able to deliver these kinds of mandates even coming from our Tenneco Group to us saying, okay, can you make this product at a certain price?

We're able to deliver that. Those two put together give us excellent export traction over the next few years.

Sure, sir. Thanks for the answer.

Just a clarification. Would it be possible to share out of the 1,750 crores that we booked currently in this quarter for exports in order wins, how much would be from third party and from the Tenneco group company?

I I think I guess we've not reported that. We we can think about how to report that, but roughly and simply, the growth is coming actually on both sides equally.

Don't forget that this is just not a you know Advanced Ride Technologies business. Because of technology equalization, right, the same BS VI.2 with RDE, what you supply to the let's say commercial trucks or even OEMs, you know Indian OEMs, the same product can be exported back to Europe.

Even Clean Air and even Powertrain has a lot of potential for exports. I think in that 1,760, I I won't I won't be able to tell you the exact numbers split, but let's put it this way, the growth is coming from both engines nicely and coming both from third-party OEMs and from our own domestic let's call it Tenneco to Tenneco, right?

Tenneco India to Tenneco Global, right? It's it's it's firing on all all cylinders, if I might say.

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

Thank you so much, Jimit.

Hello, sir. Thank you for taking my questions.

I had two questions. One was on precious metal cost, which has been on the rise since the middle of Q1.

Since the royalties are linked to revenues from operations, what impact do you see on margins in that sense? That's one.

Let's first go ahead with one, and then I'll ask the second question.

Mahendra, you want to take it?

Sure. As we know, like being substrate part of pass-through, which we buy at the direction of the customers and we recover the money from the customer side, and it doesn't really impact the profitability in terms of absolute, but yes, in EBITDA margins, it make our profitability look it gives a right picture.

Now in terms of royalty, we are paying 2.5% royalty to our corporate, which is which is kind of it is it is being a related party transaction. It has been there's been a benchmarking that has been done.

It has been evaluated by a third independent third party and approved by the board, independent board. Now in terms of this royalty, yes, we know that we have been paying this royalty on the overall revenue from operations, and the benchmarking was done considering the that we would be paying royalty on the overall revenue and not on the VAR.

No, and just to add, the impact on margin, to answer your question, the impact on margin is little to nothing. Why?

Because first of all, precious metals content itself is a small part of the total, and on top of that, the 2.5% of that delta is going to come to nothing, right? If you just do the mathematics, it's nothing.

Plus, don't forget in return for just that 2.5%, which is fairly middle of the fairway for royalty, there are companies, MNCs that are as high as 5-6%. So 2.5% is what fairly average, and for that, we get access to thousands of patents and the fact that we are able to win all of this technology, new technology business with the wind that I put in the press release is purely because of the access to technology that our corporate parent Tenneco gives to us, right?

The benefits are far far more than this small royalty that we pay out. That's my point, yeah.

Thanks.

Understood, sir. The second was on the EBITDA for last year.

We've reported 18.6% for the full year, and as I see, the first half EBITDA margin is 19.5. Is there an element of seasonality in the margins, or was there some higher margin business that were done in the first half, and that is why we see the margins to be slightly subdued in the second half?

Go ahead,

Mahendra. Yes, our margins in the first half they have been really good.

If you compare to the previous year where we were at 18%, we are better off. One of the main reasons for that has been the increase in the exports, where we got really good margins on those exports.

In terms of going forward, like I said, we have become a publicly listed company now. There are certain costs that are related to running such an organization, and for example, the cost of the senior management, compliance, legal, etc.

related costs. We would be incurring these costs, and EBITDA margin could be a bit soft in the next couple of quarters.

As the business grows, we would be able to absorb these costs with the incremental revenue and the margins that we make, and we should be coming back to the same levels.

Understood, sir. Thank you so much, and all the best.

Thank you, Pradip.

Hi, sir. Thank you for the opportunity.

Sir, can you please highlight what is driving the performance at the ART segment, and what is the mix of different type of tech within the ART segment?

I can sort of start it off, Mahendra, if you want to add anything, right? Is it Himanshu?

Himanshu, right?

Yes. Himanshu, great question.

Look,

Advanced Ride Technologies in India right now, 95+% of the business is conventional shock absorbers, right? These are fairly commoditized everybody uses them, has been using them for decades.

What's happening in India right now is a massive disruption, okay? I think primarily driven by benchmarking that's done by our Indian OEMs finding out that their competitors overseas are able to make advanced suspension in vehicle prices that are quite affordable.

This is like a an eye-opener, right? This has prompted several of our top Indian passenger vehicle OEMs to really start thinking about, you know what, if we don't disrupt ourselves, then we're going to be in trouble.

In India, we ride handling, comfort while sitting in a vehicle is the last remaining area for disruption, right? We've had everything.

We went from small cars to SUVs, we then to connectivity and Bluetooth. We went to excellent interiors, sunroof, ADAS has come, emergency braking, but that last remaining frontier happens to be Advanced Ride Technologies.

As Advanced Ride Technologies have come in, as you move from conventional to like a frequency-dependent damping, which is still mechanical, and then you move into like an active or a semi-active or an active suspension, which requires more electronic controls, you find that the basic shock absorber accessory, paraphernalia grows, right? The content per vehicle starts growing dramatically.

Even more so when it comes to an electric vehicle, because of the way the vehicle's dense and it's bigger lower center of gravity needs a more robust suspension. The point I'm making is that as the technology roadmap advances from a basic conventional shock absorber to a more active suspension, and that's happening very rapidly.

In the next few years, you're going to see everybody and their brother, every OEM, trying to push this in a big way because they have to keep up. It's a survival thing.

Our margins will also track up simply because there are not that many suppliers out there who can provide such advanced technologies, including electronic controls, who can system integrate, etc., right? We have that natural advantage, and the best news is these technologies are already pre-validated.

They are proven technologies. We're not coming in and we're not like using the customer as a guinea pig, right?

We have already been in something that works elsewhere in other regions. I think from a trend point, we're excited because the growth rate for Advanced Ride Technologies, because of the fast disruption, is going to be faster.

It's going to take us to a place of higher margin because there's not that many competitors, at least for now, and the fact that we have a higher velocity of execution. Why?

Because we're a single company. We don't have any joint ventures between us and the Tenneco Group.

It is literally me calling up my boss and saying, hey, I need this technology to be localized very quickly, and with the strength of our local Indian application engineering team, we're able to bring that to market fastest. More than anything else, our Indian OEMs want something, but they want it now.

They want the Advanced Ride Technologies now, and they're not willing to wait for like a two or three years. They want it like within months, right?

We're able to do that uniquely. That's sort of the to answer your question.

Yes, margins will go up, but it will take some time, but the adoption rate will be faster simply because it's it's a survival thing for our OEMs, yeah.

Okay. Thank you.

How much was the listing expenses, and which line item you have included that in?

Listing expenses were to be borne by the selling shareholder, so that's not part of my P&L.

Okay. Sir, can you highlight what was the growth on the export side for this quarter?

We don't have the growth number because we are not publishing the growth. If you were there earlier, there was a question earlier from one of the people that we should call our exports separately.

Right now it's still at a very nascent stage, but it's growing very, very fast. I think for a future earnings call, we might call that out separately, and we might also publish growth rates, etc.

That would be kind of nice to do. We'll take notes here, and we'll make sure that we have something on export growth as well.

Okay. Thank you, sir.

Thank you very much, Himanshu.

Yeah. Hi, sir.

Thanks for the opportunity, and congratulations on the successful listing. Just one, kind of follow-up question on one of the earlier comments.

What kind of headwind should we, kind of expect in terms of the margins, given the listing compliance costs, etc. that you talked about as one of the reasons for margins being muted going forward for the near term?

Because generally, such costs actually doesn't kind of show up to be a material headwind for many of the companies that go IPO. Just wanted to understand that bit.

I'll start, maybe Mahendra, you can add. Look, there are two different costs, right?

One is the listing itself, and that's paid for by the promoter, right, selling shareholder. This cost, what we're talking about, which has a sort of a soft impact on EBITDA, is because of the hire of new leaders, right?

There's also strengthening of HR, IT, finance, legal, because once you go to a public entity, you have to hire certain key resources to manage things like compliances and HR, labor laws, etc. You are held to a higher level of scrutiny, which requires you to add certain headcount, and plus of course, there are also auditors and external consultants, advisors, and so on.

These are sort of cost additions that happen when you move from a private to public entity. However, having said that, once we add these costs, they will be pretty flat-ish because the revenue growth will absorb these costs progressively, right?

It's just a matter of a few quarters when the revenue growth catches up and we're able to absorb this much better. It's not material enough where you have to panic or anything.

It's very, very minimal. We are adding leadership very carefully to make sure that we meet the needs of a public entity from a board and statutory, etc.

perspective. At the same time, we're going to stagger it over time so that it doesn't hit us severely in any specific quarter.

In terms of headwinds, right? Our headwinds are more about the general market.

What happens to commercial trucks? If, for example, the road infrastructure is going to a five-year low, then commercial trucks won't seem to be growing in a big way, or there's a slowdown in the passenger vehicle segment, especially the B, C, and D segments.

Our headwinds are more to do with the market and how the market would behave. There's also some headwinds around this labor code announcement, but that just happened a few days ago, most companies around India are trying to figure out what this means for us, right?

Every company will be affected by these new labor laws. Our headwinds are more macroeconomic related that affects everybody, not just us.

We're not so worried about our own internal growth strategy simply because, like I said, we are already winning a lot of market share. We are growing with new technologies, with third-party OEMs, and we're also growing in exports.

All of those three are areas for growth. Of course, there's a lot of white spaces that is untapped between Clean Air, Powertrain as well as Advanced Ride Technologies.

Mahendra, you want to add something?

No, I think Arvind has covered that. The cost of running a public limited company, like Arvind mentioned, one we have been carefully kind of incurring these costs, and this will come over a period of time.

By that time we get these costs in our P&L, the revenue and profitability will be able to absorb these additional costs. There won't be any major impact on the P&L on account of these costs.

Yes, these are essential costs that we need to incur.

Sure. No, that helps quite.

Just wanted one more clarification in terms of what's the internal understanding in terms of the timeline for the TREM emission norms? Because I understand that is one, kind of meaningful trigger for us in terms of our Clean Air business.

What's the current understanding on that?

Great question. Now look, it depends on when the norms happen, right?

TREM V is where we have our strongest position, right? The TREM V forces a DOC, DPF, and SCR, where we are very, very strong, right?

We're just waiting for the legislation to come in, and it might be 2027. It might be early or late 2027.

We think it'll be around 2027, and that's when those norms will very positively impact our sales revenue. We are, like I said, every time a legislation changes or there's complexity, we come out on top.

This is the history of Tenneco. We have grown our market share over several years purely because of legislation, where we can meet the affordability criteria, right?

We can reduce weight. We can make it lightweight.

We can respect the packaging environment of the customer vehicle architecture, and we can deliver faster time to market. Time to market is so important for the OEMs, right?

Because we resonate on all these four or five key dimensions, our ability to win every time that the legislation change becomes much more stronger, right? That's how we've captured market share.

Like on commercial trucks, we're leading the market there as well, right? Very, very high market share, which you've seen in our RHP as well.

I think the timeline, I couldn't tell you. It really depends on when the legislation will be announced.

I think again, somewhere around 2027. Once that comes, then we are in very good shape because then we will have a lot of content growth for Clean Air within TREM V.

Sure. Fair to assume that this forms part of our order book that you've disclosed?

The TREM V

Yes, there are lots of TREM V order books in here as well, yes. Good observation, yeah.

Okay.

I'm just saying the order book is just a snapshot in time, right? After September 2025, we will still be booking lots and lots of business, so that's already set in motion.

There will be more legislation-related bookings, for example, CAFE norms, right? There will be some more CAFE norms related bookings for passenger vehicles.

There might be something around BS VII that might, for example, if they do a watered-down BS VII, if we've heard about some discussions around them pulling ahead some of these legislations forward. If that happens, then we will be growing obviously on commercial vehicle side.

Same thing on the shock absorber, Advanced Ride Technologies side. Depending on how quickly the OEMs want to disrupt themselves in the comfort area or the dynamic suspension area, we will be there to support them.

Sure, great. Thanks,

Arvind.

Thanks, Rahul. All the best.

Hi, sir. Can you hear me now?

Jimit, we can hear you.

Thanks for the opportunity again, sir. Just circling back to the export front.

Is there a particular timeline that the management or the promoters has in mind who kind of consolidated the plants into India? Maybe the customers are pushing for it.

Maybe we want to leverage the recent listing to kind of have a stronger growth in fact by manufacturing more over here and shutting down a couple of plants overseas which are less cost-efficient?

One of the core values of our company is organizational velocity and tenacious execution. These are the two main values.

You wouldn't have seen values like that in any other company, right? We have very interesting set of values.

Organizational velocity really talks about what it takes for other companies three years, months. For us, it takes weeks.

We make our decisions very, very fast. Tenacious execution means the high level of accountability and transparency and the discipline, the daily discipline that comes with executing, right, the program or a task.

If you look at our group performance, forget India for a second, if you just look at the Tenneco Group, they've made an amazing transformation at the group level. India's success, right, the Tenneco India success is a subset of the fantastic success that the group is also having.

You can go online and check what they've done to their EBITDA margins in just three years. It's insane how wonderfully our global CEO, Jim Voss, and the executive leadership team have led this company into a one of the best transformations in the auto industry, right?

India has also done very well over the last three years. We've achieved very nice EBITDA margins.

I think to answer your question, that high velocity and disciplined, tenacious execution will ensure that looking at a clean-sheet approach, we are always looking at ways in which we can make a higher enterprise value for our overall Tenneco Group. If that means moving more business to India quickly, we will do that, and this is happening already.

I can tell you that, right? Now just the third-party OEM, yes, there's a push, but it takes some time to test the product, validate the product, homologate the product.

If now you're moving, let's say, the same part from Europe to India, and then it has to be validated, and then the customer has to accept all the logistics and etc. That takes a little bit of time, but I'm just saying that from the fact of building India as an export hub, there's this tremendous drive from our Western OEMs to push more and more business to India.

Those two, the Tenneco internal need to achieve higher enterprise values, that automatically puts India in a very favorable spot from the labor arbitrage standpoint. Secondly, OEMs, customers themselves pushing to say, hey, I want this out of India.

I want to have a supply chain diversification, which is not just cost, but also contingency planning from a supply chain standpoint, right? All those will help our exports go faster.

I cannot tell you whether it's going to happen in 2 years, 3 years. All I will say is that the velocity is there at both sides to happen from the internal Tenneco Group, as well as the third-party OEMs.

Sure, sir. Secondly, on the Advanced Ride Technologies systems, sir, you mentioned that all of the Indian OEMs trying to go for more of a semi-automatic from mechanical suspension point of view.

Are there any tangible things that we can track, namely RFQs, the change in RFQs as a percentage? Let's say if there's a X number of RFQs which were for advanced right or the semi-automatic technologies, where are they now?

Is it a 2x or a 3x increase in RFQs? Are other OEMs also trying to Jimit,

we can't hear you anymore. Jimit, sorry, but we are not able to hear you.

I'll answer this question anyway. I think, Jimit, I got your question, right?

I think what you're saying is, is it possible to get better RFQ visibility on the technology disruption that's happening, right? Look, the technology disruption is already set in motion, and I won't take the name of the customer, but you can just YouTube this or Google it, and you'll know who's leading it from an Indian OEM standpoint.

It's very clear. I think that disruption's already started.

Already conventional shock absorbers have given way to more like frequency-dependent damping, and that's already starting to become more transient as semi-active suspension starts to take off, right? We're taking this very, very seriously.

We want to localize this and bring this to the Indian OEMs as quickly as possible. I think all I would say is this is that all it takes is one Indian OEM to say, you know what, I'm doing this, and their main marketing blitz is all about the ride quality, right?

Ride quality, comfort, convenience, and that's the fact that they are making this the main differentiator for our end user, which is the car drivers and the passengers and so on. For us, that itself means that all the other OEMs who are either fast followers or slow followers, they will have to do it.

Otherwise, they will be left out. From a marketing perspective, you don't want to be the last remaining OEM who says, I still sell basic shock absorbers from the 1990s or 2000s, right?

You have to kind of move with the time, and the global technology is already moved in that direction. In China, for example, they've already moved to dynamic suspension.

I think that thing is going to get disrupted really fast. Whether we can give you exposure or not, we'll have to discuss that, because a lot of these are confidential RFQs.

We will tell you, I think whenever we book something that is new technology or let's say a disruption, we will make it apparent through an order book announcement maybe once every six months or so, because these things have their own timelines in terms of getting the RFQs quoted, winning business, etc., etc., right? We'll figure out a way through our order book to give you some understanding of what that is.

Hi. Thanks for the opportunity.

If I look at your two segments, the growth in Clean Air and Powertrain Solutions was only 3% year-over-year, so that's actually slightly underperformed the industry. What would be the reason for that, and what trend do you see going forward?

Would this segment also pick up, or it would largely grow in line with the industry?

Look, don't look at it just as a quarter, right? You have to look at this with Clean Air and Powertrain, you have to zoom out, right?

You have to zoom out and look at the bigger picture. There will be exports, there will be more growth happening in the near future.

It's more of a quarterly thing, and again, you have to remember that in some cases because of this AC cabin requirement, right, many OEMs pulled ahead a lot of their volumes to Q1 because they wanted to sell as many vehicles as possible without the AC cabin, because AC cabin means you have to pay another, I don't know, 60, 70, 80,000 rupees. I think before that legislation kicked in in around July-August, a lot of the commercial truck OEMs pulled ahead.

You'll notice that our CAPG probably did better in the prior quarter than this one. In any way, don't worry about it too much, because you have to kind of zoom out and look at the bigger picture of the market itself.

Yes, commercial truck is a little bit slower, and we are affected more by it because we are a bigger presence in commercial truck, like in Clean Air. Our exposure to passenger vehicle side is we don't have a very high market share, but we will be growing market share there as well in passenger vehicles, but because of the slowdown in or let's call it a lackluster performance in commercial trucks, that has affected our Q2 performance.

If you look at the H1 in totality, H1 is okay for commercial truck Clean Air and Powertrain, right? My suggestion would be zoom out always for our kind of a business because we are long sales cycle, that usually one quarter doesn't tell the whole story.

Sometimes there's a lot of pull-ahead, sometimes there's a pushback. In this case, like commercial truck, there was a pull-ahead because of the legislation coming in on the AC cabins for commercial trucks.

Mahendra, you want to add something?

Okay. No, yeah, that's that.

Okay.

All right, thank you.

Thank you so much.

Thank you, Danesh. That concludes the Q&A session.

The recording of this call will be available shortly on the company's website. Thank you all for your participation.

We really appreciate that, and have a good evening, please.