NDR Auto Components Limited (NDRAUTO) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to NDR Auto Components Q3 and 9M FY '26 Earnings Conference Call. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Rishab Barar, CDR India. Thank you, and over to you, Mr. Barar.

Good day, everyone, and a warm welcome to all of you participating in the Q3 and 9 months FY '26 Earnings Conference Call of NDR Auto Components Limited. We have with us today on the call Mr. Pranav Relan, Whole-Time Director; Mr. Vikram Krishan Rathi, CFO and Vice President; Mr. Rakesh Rustagi, GM, Finance and Accounts; and Mr. Rajat Bhandari, Executive Director and Company Secretary, along with other members of the senior management team. Before we begin, I would like to mention that some statements made in today's discussion may be forward-looking in nature and are subject to risks and uncertainties. A statement in this regard is available in the Q3 and 9 months FY '26 earnings presentation shared with you earlier. We will start this call with opening remarks from the management, following which we will have an interactive question-and-answer session. I now request Mr. Pranav Relan to share some perspectives with you with regard to the operations and outlook for the business. Over to you, sir.

Good day, everyone, and a warm welcome to our Q3 FY '26 earnings conference call. Thank you for joining us today. Let me begin by briefly touching upon our financial performance for the quarter under review. For Q3 FY '26, our total income stood at INR 208.99 crores, registering a growth of 19% year-on-year. EBITDA for the quarter was INR 23.37 crores, with EBITDA margins at 11.18%, and PAT stood at INR 15.19 crores. For the 9 months ended December 2025, total income stood at INR 595.56 crores, a growth of 14%. EBITDA was at INR 66.41 crores with margins of 11.15%, and PAT for 9 months FY '26 stood at INR 43.64 crores. Our PAT for the period under review are impacted by INR 0.65 crores due to the new labor codes. We continue to make strong progress with all our OEMs with both higher volumes as well as increasing the number of models we work with. Our order book as of December 31, 2025, stood at INR 450 crores providing strong medium-term revenue visibility and underlining the confidence OEM continues to place in our capabilities. Our CapEx plan towards the establishment of back-end infrastructure for our new product offerings, namely seat insert, seat trims and frames, ambient lighting, sunshades, seat latches and seatbelt reminder remains on track. Our emphasis continues to be on expanding the content per vehicle we offer and continue to bring to the market disruptive and value-added offerings. The reduction in GST on cars has played a significant role in improvement affordability. It has translated to an increase in volumes for OEMs, which in turn is a positive for the auto component sector, too. On our part, we are well prepared to leverage the significant opportunities we foresee. We have adequate land available for expansion, 26 acres at Aurangabad and 9 acres at Kharkoda, which would help reduce our costs towards setting up or expanding capacities. We remain confident in continuing to deliver strong profitable growth and creating value for our stakeholders. We would now be happy to take your questions.

[Operator Instructions]. The first question comes from the line of Jatin Chawla with [ RTL Investments ].

My first question is on your order book. You said it's INR 450 crores. I think on the call last time also you had given a similar number. So are there no order wins this quarter? Or have you won some orders and some orders have gone into production, which have been kind of taken out?

So we are currently quoting for a lot of business. There has been no new orders in the last quarter. We should update this by next quarter.

Got it. Also, when I look at Maruti production, their numbers from September to December quarter are up by 13% quarter-on-quarter. Even for Bharat Seats on a quarter-on-quarter basis, the revenue increase is 7%. Why is NDR revenue growth kind of lagging on a quarter-on-quarter basis this quarter? Any specific reason?

So we don't want to talk about specific models, but there's a new model that Maruti has launched, which has resulted in a second model not growing as much.

Got it. Got it. And on your PPT, you said there is a kind of progression in Kia's offtake. So this is with respect to Carens or Syros, how are you seeing things?

It's in the newer model that there should be some progress on the offtake.

Next question comes from the line of Vijay with Nuvama.

A couple more questions, sir. So just Maruti Suzuki new model, are you referring to the Victoris models for which we are not present?

Yes, that's correct.

Okay. That will be helpful. In terms of the new upcoming project expansion, can you please highlight what is our expectation for that? What is the potential revenue opportunity from each of those 5 projects expansion?

So the order book is about INR 450 crores. And then there is some more business that we're acquiring at the moment. Once we acquire new business, then we'll give you updated.

I meant, sir, the slide which we have written in the presentation. So there are 5 new projects under implementation. A couple of them are going live. So 1 of them is going live in April 2026 and rest of them are coming live next year. Just wanted to understand the revenue -- potential revenue opportunity from there?

So it's about INR 450 crores that should come from that.

Okay. And when -- so this INR 450 crores will start converting into sales from next year onwards, right?

So there will be some gradual ramp-up. The INR 450 crores will come gradually over the next 2 to 2.5, 3 years.

Okay. So sir, will it -- just want to understand, will the SOP production start from the first half of FY '27 or it's mainly in the second half?

Mostly towards the end of the year.

Okay, sir. In terms of the visibility for 2030, what type of visibility we have to achieve the INR 3,000 crores because our order book is still only INR 450 crores. Just want to understand how we expect to move from what INR 700-odd crores in the last year. Currently, we have done -- for the 9 months, we have done around INR 600 crores. Again, for this year, it will go to around INR 800 crores, which is the run rate plus INR 450 crores that counts at around INR 1,300 crores. So how -- what is the visibility for the INR 300 crores guidance?

Currently, we are acquiring a lot of new businesses. In addition to that, we're focusing on customer and product expansion. As and when it happens, we'll keep on giving you updates.

Next question comes from the line of [ Devant Mehta ] with [ Sahadeva Enterprise ].

I just wanted to know in terms of what are our plans to sort of diversify our OEMs? Do we want to make a Kia, Toyota plant coming up? Do we see maybe by 2030 or later, a point in time when Maruti isn't as big a part of the business as it is today?

So we're continuously working on expanding customers. We've got Maruti, we've got Toyota, we've got Kia, and we're working on adding few more.

Great. That's very reassuring. And just 1 more question, which is slightly vague, but how closely our margins or our business tied to the OEM production volumes as and when there are sort of down cycles in terms of production with OEMs? Would that sort of really affect our OPMs and our margins very massively? Or what is the kind of pricing power essentially that we have as a Tier 2, Tier 1 supplier?

So there shouldn't be a significant impact on our margins. It should not be more than 0.5 or 1% compared to the volume going up or down.

Next question comes from the line of Sahil Sharma with Dalmus Capital Management.

So give us the current capacity and the current capacity utilization?

The current capacity utilizations are about 80% to 85% across all our plants.

Okay. So I think this was the case last quarter as well. So would the capacity constraint be a factor limiting growth right now?

So as soon as we get new business, we are open to expanding capacities.

So right now, there is no constraint as such?

No constraint.

Sure. And just a question on the products that we supply to Maruti. So does all of it go through Bharat Seats Limited? Or do we sell some products directly to Maruti as well?

So most of it, the seat cover and the seat frame goes through Bharat Seats. Apart from that, the shade and some of the BIW parts go directly.

So what would be the proportion of the shades and BIW in overall?

I don't have that off hand, but I will share that with you.

Okay. And what would be the revenues from 2-wheelers in 3Q FY '26 and 9 month FY '26?

The 2-wheelers should be about INR 25 crores, INR 30 crores in the 9 months.

Okay. And are we adding new models or customers in 2-wheelers right now?

That is something we're working towards. I think our focus will be passenger vehicles at first.

Next question comes from the line of Manish Gupta with Equinox Investment Advisors.

In May 2025 con call, there was discussion about the prospects of Bharat Seats, wherein you had shared a top line vision of INR 3,000 crores in about 3 to 5 years. Now after Bharat Seats strong performance in recent quarters, has the aspiration been revised upwards?

The estimation should be about INR 3,000 to INR 3,500 crores in the next 4 to 5 years.

And sir, what would be the reason for Bharat Seats growth in terms of -- is it a passenger vehicle growth? Or is it coming from the railway segment? Could you share something regarding that?

It's all coming from passenger vehicle segment from Maruti Suzuki.

All right. And finally, sir, would it be possible for you to have a con call for Bharat Seats as well?

Sure, we'll look at into that.

Next question comes from the line of Anubhav with Prescient Capital.

Am I audible?

Yes.

So Pranav, I have a basic question that then you are like focusing on adding new OEMs like maybe a Mahindra and Mahindra and passenger vehicles. So compared to somebody like a Lear Corporation, what is our like USP vis-a-vis then that like we can pitch effectively to M&M.? Is it that we are lower cost than them? Or do we have some technology advantage? If you can like throw some light on that, that will be useful.

So our scale in the country should be similar. So our cost competitive should be more. So we'll probably go after a cheaper -- better product -- cheaper product.

Okay. So cost competitiveness is like the main advantage?

Yes.

Get that. And my second question is that this JV with Hayashi that you have and you are focusing on ambient lighting. So can you share some color on like what aspects will this JV be focusing on? Will it be actually like manufacture LED lights? Or will you be focusing on like how the light is mounted in the interior of the car, like -- if you can like give some color on that here?

So it will not focus on LED lights. It will focus on the assembly of the ambient lighting and the mounting of the cost.

Okay. And will that also involve from electronic capability? Or is it more around like just the interiors and mounting?

It will have some electronic capability.

Okay. And my last question is this like, like you are supplying sheet metal and BIW parts to Jimmy. So are you looking at like bidding for some more models for sheet metal and BIW parts from Maruti and other OEMs?

So we are currently bidding for sheet metal and BIW parts for Maruti and Toyota. When there's an update, we'll share with you.

Next question comes from the line of [ Saket Kapur ] with Kapoor & Company.

We hope that you follow -- we can keep up with this format. Sir, firstly, if you could just explain to us the reasons of why the profitability has remained flat Q-on-Q? And in fact, why have we seen the margins under compression quarter-on-Q, that is the September quarter versus the December quarter? And how should the margin profile be likelihood in the coming quarters?

So Q-on-Q is not the best indicator for our margins. Y-on-Y is the best indicator as Q3 tends to be a quarter which has many shutdowns. So our expenses tend to be higher there.

Okay. So can you give a one-off effect on the maintenance shutdown or the things that we have taken and how should things look up in a normal quarter?

So normal quarter would be slightly higher than without the shutdown. That's why we always look at Y-on-Y.

Okay. So when we will be coming up with our fourth quarter, that comparable would be with the last year fourth quarter, that would suffice.

Yes.

And we are in a position -- and with respect to the order -- closing order book position, we are in a position to guide to the path of profitable growth, which we have been executing for the 9 months. So this would be the sum and substance going ahead also?

Yes, that's correct.

Okay. Sir, in the presentation, we have also alluded to this fact of -- in the month for -- we are expected by April '26 to do -- to commensurate our CapEx of INR 80.49 crores in the NDR light and the sunshade part, that is a NDR Hayashi Automotive, I think, so you were speaking about it. So where are we, sir, in terms of achieving the time lines? And what could be the incremental revenue going forward with the ramp-up ahead?

So that's the CapEx that we've approved for the JV. We are currently acquiring a lot of businesses for the JV. We'll share the time line slightly later, towards the end of the year.

Okay. But sir, at an optimum level, what should be the asset turnover with the type of investments we are making at INR 80 crores at the peak capacity and the product profile that we have booked out. What should be the peak revenue?

So the asset turnover should be about 3 to 4.

And the margin profile would be in the same vicinity, the 1 which we are exhibiting in our current portfolio? Or it will be slightly higher?

Yes, it should be similar to our current portfolio.

Correct, sir. Yes, sir. This answers the question, and we hope for the continuity of these factors going ahead also. Looking forward for further discussion. And also, sir, if plant visits can be arranged for interested shareholders or analyst community that would give us more insight into the business.

Sure. Definitely.

Next question comes from the line of Dhananjai Bagrodia with Alchemy.

Hello? Hello?

Yes, we can hear you.

Congratulations on a very, very good set of results. Just wanted to ask you regarding your ROCs and ROEs, do we see that sustainable going out from here?

Yes, that's sustainable.

Okay. And just to understand more regarding that, even with our CapEx and our next projects, we see similar capital discipline and allocation as we've done consistently in the past?

Yes, that's correct.

Okay. Fantastic. And lastly, the rental growth has been higher than peers. Are we giving market share? Or how should 1 look at this?

So we've gained market share in the past. We've acquired a lot of business, and we should continue gaining market share.

The next question comes from the line of Vijay with Nuvama.

Sir, I wanted to understand the business dynamics between NDR Auto, Bharat Seats and Maruti Suzuki. If you can please help me what that. I'm looking at the company newly. I started looking at the company has been around 2, 3 weeks only so just want...

Can you repeat that?

I wanted to understand the business dynamics between NDR Auto, Bharat Seats and Maruti Suzuki. So what are the products we supply to Bharat Seats and what are the products made by Bharat Seats and supply to Maruti?

So NDR Auto does the seat frame and the seat cover. Bharat Seats does the seat foaming and the seat assembly, and that is then supplied to Maruti Suzuki.

And do we get any benefit by keeping it separate, like why we have kept it separate?

So I think that is the seating model, that is how the market in Asia works where the final assembly tends to keep PU foam and tends to also outsource the seat cover and the seat frame.

Okay. Sir, we would like if we can have an plant visit or an interaction on the Bharat Seats as well. That will be pretty helpful going forward.

Sure. We can plan that.

Next question comes from the line of Jatin Chawla with RTL Investments.

So when I look at quarter-on-quarter, your gross margins are down by 100 basis points. Is there any impact of commodities, which will be kind of passed on with a lag? Or this is just normal kind of business mix things?

So it's normal business model mix. It's nothing to do, not with commodities.

And on the last call, you had mentioned that Maruti EV production has started, and you were expecting a scale up from 3Q. So has that scale up started? Or it's kind of been pushed out a little bit?

So Q3 had some scale up. Q4 should have a larger scale up.

Got it. Got it. And given that you have this model scaling up as well as very strong industry demand tailwind, what sort of revenue are you looking for in FY '27? I think this year, we will end with somewhere like a 15% growth. In next year, will the growth be better than that 15%? Or how are you thinking about that?

So we're not sharing any annual guidance at the moment. We're happy to talk about our long-term 5-year vision.

Next question comes from the line of [ Rosita Fernandes ] with Neo Asset Management.

I actually had the similar question, 1 of the analysts just took. The top line guidance I was looking at. So any kind of number or color you could provide on the order book, the pipeline of order book for the short-term way like FY '27, FY '28 basis?

So we don't share that at the moment. So I think our 5-year target is what you're reiterating towards.

Next question comes from the line of Anubhav with Prescient Capital.

Pranav, is there any other JV or possibly acquisitions that we are looking at? Can you share that?

So we are continuously looking at JVs and acquisitions when it converts, then we'll share that with you.

And this JV with Hayashi, what I understand is that Toyota was 1 of the anchor clients. So apart from Toyota, like, have we won any new OEMs, if you can like share some color on that?

So we are working on approaching new customers when it converts, then we'll share that with you.

Okay. And also there was like the possibility of new product introductions also under this JV. Is that also under consideration?

So we started with the ambient lighting, which was a new product for us. The JV has all the products of Hayashi in our scope. We continuously look to expand our product portfolio.

Next question comes from the line of Manish Gupta with Equinox Investment Advisors.

Sir this is, again, regarding Bharat Seats only. The growth that is coming in Bharat Seats, sir, last time you had informed that there was some tire and wheel assembly business also being undertaken in Bharat Seats. So how is that progressing?

So we've got -- that has come last year. We've got a little bit more business with tire and wheel. That should come sometime next year.

And with the seat premiumization happening, do you foresee revenues increasing more than volumes for both NDR and Bharat Seats?

Yes, definitely. In addition to that, we're also expanding our market share.

All right. And sir, what do you think would be the margin trajectory due to this premiumization push? Are the margins expected to rise in the long term -- medium term to long term?

So margins are expected to be similar.

Okay. Between 6% to 7%.

Yes.

All right. And sir, do you expect any strong traction from Vande Bharat seat program? Or that remains a minor part of the overall portfolio?

That remains a minor part of it, and we're currently not focusing too much on that.

[Operator Instructions] Next question comes from the line of Rosita Fernandes with Neo Asset Management.

Is it possible to share any data on market share in your 2-wheeler and 4-wheeler for the segment that you provide?

Sure, we can share that maybe next time.

Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.

Thank you for your time and participation. We continue to be optimistic about the opportunities before us and look forward to sharing these with you as we move forward. Should you need any input or clarification, please write into us or Investor Relations partner, CDR India. Thank you.

Thank you. On behalf of NDR Auto Components, that concludes this conference. Thank you for joining us. You may now disconnect your lines.