NDR Auto Components Ltd Q1 FY27 Earnings Call Summary

Event Participants

Executives

4 Pranav Relan, Rakesh Rastogi, Rajat Bhandari, Vikram Krishan Rathi

Analysts

9 Dhananjai Bagrodia, Jatin Chawla, Khush Nair, Manish Gupta, Rajesh Agarwal, Romil Jain, Sai Kiran, Saket Kapoor, Taneshwara

Financials & KPIs

Geographic & Segment Commentary

• Seating (Seat Frames & Covers): Core business segment and largest component of the order book. Company produces over 1 million seats annually as the most backward-integrated player in India, providing significant cost advantage. Maruti Suzuki remains the anchor client with 100% supply on Brezza and new models.
• Bharat Seats (JV): Revenue grew 35% YoY in Q1 FY27, exceeding expectations. Benefiting from seat premiumization trends (air-conditioned/ventilated seats). Target revised to ₹3,500 crores revenue by FY30, up from earlier ₹3,000 crores guidance. Focus remains on four-wheeler seats, carpets, and two-wheeler seats.
• NDR Auto South (Anantapur): Newly inaugurated facility for seat trims and frames serving South Indian OEMs. Production starting within 10-15 days of the call (Q2 FY27). Full-capacity revenue potential of ₹70-80 crores, subject to model performance.
• NDR Hayashi (Bangalore): Sunshade manufacturing JV commenced operations in June 2026. Currently generating losses (₹58 lakhs in Q1) as the plant runs below breakeven. Targeted breakeven at ₹100-150 crores revenue; potential of ₹200-300 crores over 5-6 years.
• Emerging Products: Ambient lighting orders secured for two new Maruti Suzuki models (contribution from 2028); seat inserts plant and seat belt reminder (SBR) system plant to commence operations early next year.

Company-Specific & Strategic Commentary

• Product Diversification: Expanding beyond seating into sunshades, ambient lighting, seat inserts, and SBR systems. Non-seat products expected to carry similar margins, though ROCs may be slightly lower. Seating remains the largest revenue contributor given vehicle content.
• Customer Diversification: Actively bidding for new business with Toyota and Kia alongside existing relationships with Maruti Suzuki and two other OEMs. Multiple customers approaching NDR for setup opportunities; company currently focused on India expansion only.
• Capacity Expansion: ₹150 crores combined capex across new plants (NDR Hayashi Bangalore, NDR Auto South Anantapur, future projects) targeting ~4x asset turnover. Annual capex of ₹40-50 crores planned for the next two years.
• Backward Integration & Scale: Company positions itself as the most backward-integrated seating player in India, producing 1M+ seats annually. This scale, combined with indexed commodity contracts, enables margin stability despite cost pressures.
• Relationship Milestones: Celebrated 40th anniversary of Bharat Seats with Suzuki Motor Corporation CEO T. Suzuki as guest of honor on July 2nd, 2026, underscoring the strong multi-decade partnership.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Order Book Composition and Revenue Target

• Question: Can you provide segregation of the ₹650 crore order book by product and clarify how to read the ₹3,000 crore target? (Taneshwara)
• Answer: Most products are seat frames and covers; new plants for seat inserts and seat belt reminder systems, with ambient lighting being the smallest part. The order book adds to existing revenue and represents booked business. (Pranav Relan)

Margin Sustainability and New Product Impact

• Question: With product expansion, should we assume margins and ROCs remain at current levels? (Taneshwara)
• Answer: Margins should remain at similar levels (11-12% EBITDA) and ROCs too. All commodities are indexed, enabling margin maintenance. (Pranav Relan)

Ambient Lighting and Revenue Outperformance

• Question: What are the details on the new ambient lighting order and when will revenue growth outpace Maruti's production growth? (Jatin Chawla)
• Answer: Two new Maruti Suzuki models secured, small size, starting 2028. Growth uptick expected when NDR South starts this quarter and NDR Safety/SBR begin early next year. The company continues to supply 100% of Brezza requirements. (Pranav Relan)

NDR South Ramp-Up and Revenue Potential

• Question: What should we expect from the Anantapur plant for the remainder of the year and at full capacity? (Saket Kapoor)
• Answer: Plant inaugurated; production starting within 10-15 days, so Q2 will show incremental revenue. Full-capacity revenue potential is ₹70-80 crores, subject to model performance. (Pranav Relan)

Other Expenses Increase

• Question: What explains the sequential increase in other expenses? (Saket Kapoor)
• Answer: Higher marketing expenses for new customer acquisition, R&D for prototypes, and new hires for growth. These expenses will continue as the company grows aggressively. (Pranav Relan)

Bharat Seats Growth and Revised Target

• Question: Bharat Seats grew 35% - did this exceed expectations and will you revise the ₹3,000 crore top-line guidance? (Manish Gupta)
• Answer: Yes, growth exceeded expectations and is sustainable given strong market conditions. Bharat Seats should reach ₹3,500 crores by 2030. Premiumization (ventilated/AC seats) flows to Bharat Seats; frames and covers premiumization goes to NDR. (Pranav Relan)

Cost Advantage and Revenue Breakdown

• Question: What gives NDR a cost advantage and how should ₹3,000 crores be split between existing and new facilities? (Sai Kiran)
• Answer: Company is the most backward-integrated player with scale of over 1 million seats annually. Target is approximately ₹2,000 crores from organic business and ₹1,000 crores inorganic, which is still being worked out. (Pranav Relan)

NDR Hayashi JV Losses and Break-even

• Question: Will the JV loss continue and what is the breakeven revenue level? (Saket Kapoor, Jatin Chawla, Taneshwara)
• Answer: Losses will continue for some quarters until sales reach ₹100-150 crores breakeven. Full team and overhead are already in place. The Toyota project delay has impacted the timeline. Potential is ₹200-300 crores over 5-6 years. (Pranav Relan)

Customer Diversification and Non-Seat Margins

• Question: How will OEM base diversify over 2-3 years and what margin difference exists for non-seat products? (Romil Jain)
• Answer: Bidding for Toyota and Kia business, working with two other OEMs. Non-seat products should carry similar margins at similar levels; EV business also similar margins/ROCs with slight top-line increase. (Pranav Relan)

Aurangabad Plant and Asset Turnover

• Question: What is the timeline for the Aurangabad plant given Toyota delays, and what asset turnover is expected on the ₹150 crores capex? (Jatin Chawla, Khush Nair)
• Answer: Plant setup depends on acquiring Toyota business; Toyota's India plant now expected CY29. Asset turnover on combined capex is approximately 4x. Two non-productive lands will be utilized once new business is acquired. (Pranav Relan)

Key Takeaway

NDR Auto Components delivered a resilient Q1 FY27 with revenue of ₹221.45 crores (~19% YoY growth) and EBITDA margin holding at 11.88% (₹26.44 crores) despite commodity and supply chain headwinds, with PAT at ₹16.40 crores. The company advanced its multi-product expansion agenda, commencing sunshade production at the NDR Hayashi Bangalore JV and inaugurating the NDR Auto South facility at Anantapur with ₹70-80 crores revenue potential. The order book remained steady at ₹650 crores, anchored in seat frames and covers. Management reaffirmed the ₹3,000 crores FY30 revenue endeavor (₹2,000 crores organic, ₹1,000 crores inorganic), guided EBITDA margins to remain in the 11-12% band, and plans annual capex of ₹40-50 crores targeting ~4x asset turnover. Growth levers include customer diversification through Toyota and Kia bids, new products (ambient lighting from 2028, SBR systems), and Bharat Seats' 35% growth exceeding expectations with a revised ₹3,500 crores FY30 target. Key watch points include NDR Hayashi losses persisting until ₹100-150 crores breakeven, the Toyota plant delay impacting timelines, and rising operating expenses as the company invests in aggressive growth.