Revenue
Margin
Demand
Guidance
Tone
Metrics raised 2
- FY27 revenue growth guidance raised to high-teens (from mid-teens)
- FY27 capex guidance raised to ~₹700 crore (from ₹450–500 crore)
Event Participants
Executives
5 Aman Rathee, Kuldip Singh Rathee, Manoj Sharma, Naresh Kumar Sharma, Prashant Rathee
Analysts
8 Yash Agrawal, Naveen Kumar Dubey, Joseph George, Mrunmayee Joglekar, Raghunandhan, Ronak Mehta, Vaibhav Mehta, Vineet Agarwal
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Net Revenue | ₹1,358 crore | +25.3% YoY; underlying growth ~52.1% ex-alloy passthrough; wheel assembly closure (Apr 1, 2026) a −6.6% drag |
| Advanced Braking Systems Revenue | — | +48% YoY; sustained market leadership; highest content per vehicle with Honda |
| ALPS Revenue (Aluminum Light Weighting Precision Solutions) | — | +75% YoY; HPDC alloy wheel ramp-up at Karoli; EV exposure rising |
| Safety Control Cables Revenue | — | +20% YoY; sunroof cable supplies begin H2 FY27 |
| Exports | ₹39 crore | +18% YoY (vs ₹33 crore in Q1 FY26); Ford export order ramping |
| EBITDA | ₹164 crore | +32.7% YoY; margin 12.1% (~+70bps YoY); margin % compressed by alloy passthrough denominator; normalized 13.5–14% |
| PAT | ₹85 crore | +28.8% YoY; 11th consecutive strong quarter since listing |
| EPS | ₹4.32 | vs ₹3.35 in Q1 FY26 (+29% YoY) |
| Industry Two-Wheeler Production | 72.5 lakh units | +22.8% YoY (SIAM); total vehicle production +22.1% |
Geographic & Segment Commentary
- Advanced Braking Systems (ABS): Revenue grew 48% YoY in Q1 FY27, with market leadership sustained. Honda, the largest and most prestigious customer, carries the highest content per vehicle, which will continue across its new model launches. Pass-through on alloys is back-to-back and fully hedged.
- ALPS / Alloy Wheel: Revenue grew 75% YoY; HPDC alloy wheel supply to a Japanese customer commenced from Karoli under the Kyushu Yanagawa technical collaboration. Taiwanese partner alloy wheel remains in final testing (safety item). Confirmed alloy wheel orders are ₹70–90 crore for FY27 and ~₹250 crore for FY28; Karoli utilization rose to ~75% (from 60–65% last quarter), targeting 80% by Q4 FY27.
- Safety Control Cables: Revenue grew 20% YoY; strong sunroof cable orders received, with initial supplies from H2 FY27 and substantial ramp-up expected in FY28.
- Wheel Assembly (strategically closed): Low-margin business fully wound down from April 1, 2026—a ~6.6% drag on reported revenue growth; closure complete.
- Exports: ₹39 crore in Q1 FY27 (+18% YoY); management guided +20% growth for FY27 with Ford exports of ₹40–45 crore this year and ~₹60 crore in FY28; a large export order is under negotiation.
Company-Specific & Strategic Commentary
- Alloy-passthrough hedging: 100% back-to-back passthrough with customers, fully hedged—protecting absolute EBITDA. Margin percentage moves inversely with alloy prices (12% at peak prices; expected 13.5–14% as prices normalize).
- Capacity expansion & new plant: A new order from an existing (unnamed) customer necessitates an urgent new Bangalore plant, to be operational before March FY27. Capex guidance revised from ₹450–500 crore to ~₹700 crore, funded by internal accruals and term loans; debt-equity to stay below 0.5.
- Karoli ramp-up: Monthly revenue climbed from ~₹60 crore to ~₹110 crore; management targets ~₹1,500 crore turnover from this plant in FY28; ~20% land scope remains at Karoli.
- Green energy: Sirsa 9.9 MW solar plant fully operational; Bikaner 11.55 MW plant to commission in Q2 FY27; combined investment payback of 5–5.5 years.
- Aisin JV: Ramping with more products in pipeline; profitability expected by end FY27 (trading-led); FY28 revenue guidance to be shared in Q4 FY27 call.
- Industry tailwinds: GST 2.0 rate cut on two-wheelers (28%→18%), personal income tax rationalization, RBI rate cuts/liquidity measures, Eighth Pay Commission expectations, and easing monsoon deficit supporting rural demand into the festive season.
- Workforce: Headcount crossed 9,000+ (from ~7,000 in Feb), driven by Karoli (1,500+ recruits) and Bangalore; likely to cross 10,000 in FY28.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY27 Revenue Growth | High-teens (revised from mid-teens) | Driven by 2W industry momentum (>20% production growth), GST 2.0, easing financing, monsoon recovery; management expressed confidence |
| EBITDA Margin | ~13.5–14% normalized | Expected as aluminum prices cool from ₹365 peak; contingent on geopolitical resolution (e.g., Hormuz) |
| Alloy Wheel Revenue | ₹70–90 crore FY27; ~₹250 crore FY28 | Confirmed orders; dependent on customer ramp-up |
| Exports | +20% FY27; Ford ₹40–45 crore FY27, ~₹60 crore FY28 | Ford order ramping; new large export order in negotiation |
| Capex | ~₹700 crore FY27 | Revised from ₹450–500 crore for new Bangalore plant; funded by accruals + term loans |
| New Bangalore Plant | Operational before March FY27 | For new order from an existing customer; being set up urgently |
| Karoli Capacity Utilization | ~80% by Q4 FY27 | Up from ~75% currently; order visibility through Q4 |
| Debt-Equity | Below 0.5 | Despite higher working capital debt from commodity spike |
| Aisin JV | Profitability by end FY27; FY28 revenue guidance in Q4 call | Trading-led, profitability not expected to be significant |
Risks & Constraints
| Risk | Context |
|---|---|
| Aluminum / Geopolitical Volatility | Post-Feb-26 West Asia conflict spiked alloy prices to ₹365/kg with supply constraints; prices now >10% lower, but management flagged that a Hormuz re-escalation would delay margin normalization to 13.5–14% |
| Monsoon / El Nino | Early-season monsoon deficit threatened rural two-wheeler demand; late June–July rains eased conditions, but rural offtake into the festive season remains a watch point |
| ABS Regulatory Mandate | Mandatory ABS draft regulation still pending (possible revised draft); scope/timing uncertain—management not commenting until final rules |
| EV Transition | EV penetration ~10–11%; one large EV customer underperforming, distorting reported EV/ICE growth splits; mix volatility risk |
| Aisin JV Losses | JV still loss-making; profitability only expected by FY27 year-end with limited scale (trading-led) |
| Working Capital & Debt | Commodity spike lifted working capital needs; gross debt rose in Q1 and will rise further with ~₹700 crore capex (term loans); D/E guided below 0.5 |
Q&A Highlights
Alloy passthrough & margin math
- Question: Of the ~33% revenue inflation, how much relates to the braking division? (Raghunandhan, Vama Research)
- Answer: Not calculated segment-wise; management estimate put braking impact at ~28% on its 48% growth (Kuldip Singh Rathee, Naresh Kumar Sharma).
- Question: Stripping 33% passthrough from revenue gives ~15.7% EBITDA margin—is the math right and sustainable? (Joseph George, IIFL Securities)
- Answer: Calculation is roughly correct but includes opening inventory; 15% is not sustainable—normalized margin is ~13.5–14% (Naresh Kumar Sharma, Kuldip Singh Rathee).
- Question: Any pending passthrough with a lag? (Ronak Mehta, ICICI Securities)
- Answer: No—all passthrough received back-to-back, fully hedged (Kuldip Singh Rathee).
Orders & capacity
- Question: Alloy wheel FY27-28 revenue, Ford orders, new wins? (Raghunandhan, Vama Research)
- Answer: ₹70–90 crore FY27 and ~₹250 crore FY28 confirmed alloy wheel orders; Ford exports ₹40–45 crore FY27 and ~₹60 crore FY28; a new order from an existing customer triggered an urgent Bangalore plant (Kuldip Singh Rathee).
- Question: New orders ICE or EV? Taiwanese partner status? Sunroof cables? (Mrunmayee Joglekar, Asset C. Mehta Investments)
- Answer: Broad-based ICE and EV with substantial EV in ALPS; Taiwanese alloy wheel in final testing (safety item); sunroof cables won good orders—supplies start H2 with substantial growth next year (Kuldip Singh Rathee, Manoj Sharma).
- Question: Karoli/Bangalore utilization and FY27 capex? (Raghunandhan, Vama Research)
- Answer: Bangalore near optimum; Karoli at ~75% (from 60–65%), targeting 80% by Q4; new Bangalore plant before March FY27; capex revised to ~₹700 crore (Kuldip Singh Rathee).
Funding & balance sheet
- Question: How will the new capex be funded? (Vineet Agarwal, Bajaj Auto Ltd)
- Answer: Internal accruals largely sufficient; external financing—term loans for machines—as needed for cash-flow management (Naresh Kumar Sharma, Kuldip Singh Rathee).
- Question: Debt increase vs March FY26 level? Debt-equity? (Naveen Kumar Dubey, Nuvama Financial Services)
- Answer: Debt rose due to working capital from the commodity spike; specifics to be released in Q2 statement; D/E will stay below 0.5 (Kuldip Singh Rathee).
Margin recovery & outlook
- Question: H2 FY27 growth drivers given a high base? (Naveen Kumar Dubey, Nuvama Financial Services)
- Answer: Economy growing ~6.7% with GST cut and percolating liquidity; El Nino concerns largely diluted; full-year growth will be high-teens (Kuldip Singh Rathee).
- Question: Can gross margin return to ~34% and EBITDA to 13.5–14% over 2–3 quarters? (Naveen Kumar Dubey, Nuvama Financial Services)
- Answer: Yes once prices cool; aluminum off >10% from ₹365 peak; final outcome depends on geopolitical events (e.g., Hormuz) (Kuldip Singh Rathee).
Aisin JV & workforce
- Question: Aisin JV revenue, margins, profitability timeline? (Ronak Mehta, ICICI Securities)
- Answer: Ramping with more products; profitability expected by end FY27 (trading-led, not significant); FY28 revenue guidance in Q4 call (Naresh Kumar Sharma, Kuldip Singh Rathee).
- Question: Workforce up from ~7,000 to 9,000+? (Naveen Kumar Dubey, Nuvama Financial Services)
- Answer: Karoli added 1,500+; two big plants (Karoli, Bangalore) drove the jump; count may exceed 10,000 in FY28 (Kuldip Singh Rathee).
Other clarifications
- Question: Quantify solar energy cost savings? (Vaibhav Mehta, Axis Mutual Fund)
- Answer: Cannot quantify precisely; investment payback is 5–5.5 years (Kuldip Singh Rathee).
- Question: Honda content per vehicle? Export outlook? Alloy-wheel revenue guidance unchanged? (Yash Agrawal, Nirmal Bang Securities)
- Answer: Honda has highest content per vehicle (largest/prestigious customer) across new models; exports +20% FY27 with a large export order being negotiated; today's alloy-wheel/revenue guidance stands (Kuldip Singh Rathee, Naresh Kumar Sharma).
- Question: Why isn't EV growth higher given ~10–11% penetration? (Yash Agrawal, Nirmal Bang Securities)
- Answer: One large EV customer underperforming, distorting growth percentages (Kuldip Singh Rathee).
Key Takeaway
ASK Automotive delivered a record Q1 FY27 with net revenue up 25.3% YoY to ₹1,358 crore (underlying ~52% organic growth ex-alloy passthrough, offset by the wheel-assembly closure), EBITDA up 32.7% to ₹164 crore and PAT up 28.8% to ₹85 crore—the 11th straight strong quarter since listing. All segments beat 22.8% two-wheeler production growth: ABS +48%, ALPS +75%, cables +20%. Management raised FY27 revenue guidance to high-teens (from mid-teens) on GST 2.0, RBI easing and new wins—HPDC alloy wheels (₹70–90 crore FY27, ₹250 crore FY28) and Ford exports (₹40–45 crore). Capex guidance was lifted to ~₹700 crore with a new Bangalore plant slated before March FY27. EBITDA margin of 12% should normalize to 13.5–14% as aluminum prices cool, though Hormuz geopolitics, monsoon trends, and the pending ABS mandate remain key watch-outs for the year.