Metrics raised 1
- FY27 revenue growth raised to a couple of percentage points above FY26's 21% YoY
Uniparts India Ltd - Q1 FY27 Earnings Call Summary Wednesday, August 5, 2026, 3:00 PM IST
Event Participants
Executives
4
Gurdeep Soni, Kanav Khanna, Sandeep Taneja, Tanushree Bagrodia
Analysts
12
Ajit Sethi, Anubhav Mukherjee, Ashish, Ashish Parikh, Ashutosh Tiwari, Nishita Shanklesha, Resham Jain, Sai Shivam Shah, Saumil Shah, Sunil Jain, Viraj Kacharia, VP Rajesh
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹347 crores | +27% YoY, in line with Q1 guidance |
| EBITDA | ₹90 crores | +55% YoY, +10% QoQ; operating leverage and disciplined cost management |
| EBITDA margin | ~26% | Up from ~24% in Q4 FY26; driven by operating leverage and higher warehouse channel mix |
| PAT | ₹57 crores | +64% YoY, +11% QoQ |
| EPS (TTM) | ₹39.97 | Sustained improvement over past year |
| Operating cash flow | ₹44 crores | Q1 quarterly generation |
| Net cash | ₹190 crores | Rebuilt in 10 months from post-special-dividend level of ~₹210 crores (Oct 2025) |
| Net working capital | 139 days | Of TTM revenue; reflects near-shoring and warehousing-led business model |
| Capex | ₹12 crores | Capacity enhancement, productivity improvement, customer-led growth |
| New business order book (TTM) | ₹225+ crores | Spans segments and geographies; healthy pipeline |
| Cost of materials | 33.3% | Product mix change; includes small inventory gain ~₹1 crore |
| Aftermarket revenue share | 12% | Flat YoY in absolute terms; down from 20% in FY25 and 15% in FY26 |
| Warehouse sales share | ~56% | Up from 50-52% in Q1 FY26; locally made/sold ~22%, balance direct exports |
Geographic & Segment Commentary
Construction Equipment (45% of revenue): Strong growth momentum from H2 CY2025 continued into Q1 FY27, driven by US AI/smart manufacturing investment and European government-led infrastructure spending. Top three global CE OEMs are customers; growth supported by market recovery and new business wins, with wallet expansion opportunities remaining significant.
Large Agricultural Equipment: Conditions remain subdued; CY2026 represents the cyclical trough with mid-teens decline expected in industry volumes. Growth is entirely new-business-driven, with particular momentum in Europe, as customers progress through validation/testing cycles for large AG awards won in FY26.
Small Agricultural Equipment: India performing well on government subsidy programs and rising mid-to-high horsepower adoption; new business wins in India particularly strong. Western markets tempered by economic uncertainty, but after three consecutive years of volume decline, unit volume recovery is beginning.
Aftermarket (12% of revenue): Flat YoY in absolute terms; tariff-driven price volatility led to customer and channel deferral of purchases. OEM growth reduced aftermarket share from 20% (FY25) to 12% (Q1 FY27). With tariffs reduced, management expects normalization and return to growth within 12 months.
Company-Specific & Strategic Commentary
Ludhiana Facility Restoration: Finishing shop restoration progressing on schedule; customer supply uninterrupted throughout the quarter.
Mexico Warehouse Expansion: First customer deliveries from warehouse expected in Q3 FY27; FY27 revenue expected at mid single digit million USD level. Phase two may include manufacturing in Mexico as customers relocate production.
M&A Pipeline and Discipline: Evaluated ~12 targets across PTOs, hydraulics, and fabrication; ~6 opportunities under close review. Management will not acquire unless value-accretive for stakeholders within 18-30 months; distressed assets explicitly excluded.
Fabrication Vertical Development: Facility invested in 2.5 years ago now scaling; in discussion with OEM customers to supply fabrications alongside PMP and CPL. Expected to become a meaningful vertical within 18-24 months.
Channel Mix Optimization: Warehouse sales at ~56% of revenue in Q1 FY27 (vs 50-52% in Q1 FY26) driving EBITDA margin expansion; warehouse-led sales remain highest-margin channel, expected to stay in 52-56% range over 12-18 months.
Capital Allocation Discipline: Net cash of ₹190 crores rebuilt within 10 months of ₹101 crore special dividend; organic capex steady at 2.5-3.5% of revenue, leaving balance sheet capacity for acquisitions.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY27 revenue growth | "A couple of percentage points better" than FY26's 21% YoY | Construction recovery faster than initially assumed; strong order visibility |
| Q2 FY27 revenue | In line with Q1 (₹347 crores) | Robust near-term order book |
| H2 vs H1 FY27 | H2 better than H1 | AG industry recovery expected to build through the year |
| EBITDA margin (cycle) | 20%+ over cycle; FY27 comfortably above 20% | Operating leverage, warehouse channel mix (52-56%), product mix |
| Material cost | 34-37% of revenue | Typical business range; sustainable |
| Mexico revenue FY27 | Mid single digit million USD | Warehouse deliveries from Q3; customers moving production to Mexico |
| Aftermarket recovery | Normalization within 12 months | Tariffs have declined; deferred demand expected to reverse |
| Fabrication vertical | Meaningful in 18-24 months | New facility investments flowing through; OEM discussions ongoing |
Risks & Constraints
| Risk | Context |
|---|---|
| West Asia crisis | Ongoing pressure on input costs and supply chains; management navigated without disruption but flagged continued macroeconomic uncertainty |
| Large AG cyclical trough | CY2026 expected mid-teens industry decline following ~30% degrowth in CY2025; recovery not expected until CY2027 |
| Aftermarket demand deferral | Tariff-driven price volatility moderated channel purchasing; aftermarket share fell from 20% (FY25) to 12% (Q1 FY27); normalization expected but timing uncertain |
| Currency fluctuation | Management cited currency as a swing factor in margin stacking; direct exports and warehouse mix sensitive to FX movements |
| M&A execution risk | ~6 targets under review but no signed deal; management emphasized value-accretive discipline over urgency |
Q&A Highlights
Construction Segment Growth and Margin Profile
- Question: Can construction equipment segment share growth be maintained structurally? Is CE higher margin than tractors? (Ashutosh Tiwari, Equidus)
- Answer: Construction is 45% of revenue; growth drivers are multi-quarter in nature (new business wins, industry recovery, wallet expansion). Margins are similar across product lines - differentiation comes from delivery channel: locally made/locally sold is lowest, direct exports ~20%, warehouse sales highest. Warehouse-led sales have been higher in Q4 FY26 and Q1 FY27, reflecting positively in EBITDA margins. (Tanushree Bagrodia)
FY27 Growth Guidance
- Question: Is FY27 sales growth guidance maintained or revised upward? (Ashutosh Tiwari, Equidus)
- Answer: Q1 performance in line with guidance; Q2 robust. Annual FY27 growth will be a couple of percentage points better than FY26's 21% YoY, as construction industry growth is faster than initially assumed at start of the year. (Tanushree Bagrodia)
M&A Timeline and Criteria
- Question: When will acquisitions materialize and meaningfully contribute to revenue? (Sai Shivam Shah, Avendus Spark)
- Answer: Evaluated about a dozen targets across PTOs, hydraulics, and fabrication; close on a few occasions but deals fell through. Management will not acquire without confidence in value accretion. Today ~6 opportunities are under close review. Criteria: ROCE/ROE accretive within 18-30 months, manageable by current team, meaningful platform addition. Not looking at deeply distressed assets. (Tanushree Bagrodia)
Margin Drivers: FX, Inventory, Product Mix
- Question: Quantify FX and inventory gain contribution in the quarter; what drives cost of materials? (Viraj Kacharia, SiMPL)
- Answer: Inventory gain is small (~₹1 crore); cost of materials at 33.3% driven by product mix (CPL vs PMP vs fabrication have different material consumption percentages) and channel mix. From 2022 to Q1 FY27, both product mix and warehousing sales proportion have changed, driving gross margin level. Material cost should remain in 34-37% range; confident maintaining gross margin level and 20% EBITDA over cycle. (Tanushree Bagrodia)
Industry Cycle Outlook and Margin Guidance
- Question: Will FY28 see both AG and construction contributing to growth? Will cycle EBITDA margin of 21% move up? (Sunil Jain, Nirmal Bang)
- Answer: Large AG facing CY2026 trough with mid-teens industry decline; small AG recovery expected in CY2027. These are the deepest cycles seen in 30 years; growth coming back will be a good growth cycle for both industries. EBITDA margin guidance remains 20%+ over cycle; FY27 will be comfortably above 20%. Where margins stack up depends on industry recovery pace, warehouse sales mix, and currency. (Tanushree Bagrodia)
Large AG Market Share Strategy
- Question: Why is market share lower in large AG? What capabilities does it require? (Anubhav Mukherjee, Prescient Capital)
- Answer: Small AG is the home market advantage (India produces 50% of global tractors); large AG is western market focused and requires OEM validation/testing cycles that take time. FY26 large AG new business awards are now flowing into P&L; customers increasingly excited about large AG opportunities. Multiple opportunities under deep discussion with customers. (Tanushree Bagrodia)
Europe Construction and New Order Wins
- Question: Is growth mainly North America-driven? Any new OEM opportunities in Europe? (Anubhav Mukherjee, Prescient Capital)
- Answer: Top three global construction equipment OEMs are customers across geographies and product segments. New order wins are similar across Europe and US; as new business flows into revenue, geographic contribution will rebalance. New business wins split almost equally between AG and construction and between Europe and US. (Tanushree Bagrodia)
Aftermarket Outlook and Channel Expansion
- Question: What is the outlook on replacement market? Scope to add new distributors in US/Europe? (Anubhav Mukherjee, Prescient Capital)
- Answer: Aftermarket flat in absolute terms; demand deferral driven by tariffs and inflation, not share loss - share of business with customers maintained. Expect normalization over 12 months as tariffs have reduced. In FY25, consolidated position by adding second largest aftermarket player; efforts continue in Europe and US for further channel expansion. (Tanushree Bagrodia)
Capital Allocation: Organic vs Inorganic
- Question: If M&A doesn't happen, any organic plans for capital deployment? (Resham Jain, VVD Asset Managers)
- Answer: Invested in new facility for small/medium fabrication 2.5 years ago; this vertical is developing with OEM customer discussions ongoing. Organic capex remains 2.5-3.5% of revenue. October 2025 special dividend of ₹101 crores demonstrated return discipline when no inorganic line of sight existed. Board continuously evaluates capital allocation decisions. (Tanushree Bagrodia)
Mexico Operations Potential
- Question: What is the business potential for the Mexico facility? (Saumil Shah, Paras Investments)
- Answer: Mexico currently structured as warehouse-managed sales from India; FY27 revenue expected at mid single digit million USD level. As customers move production to Mexico, revenue will increase; phase two may add manufacturing in Mexico. Warehouse sales proportion will remain in 52-56% range over 12-18 months. (Tanushree Bagrodia)
Guiding Question on H2 vs H1
- Question: Does the company still hold that H2 will be better than H1? (Saumil Shah, Paras Investments)
- Answer: Given that AG industry recovery will happen in H2, this is a fairly visible outcome. Q2 should be in line with Q1. (Tanushree Bagrodia)
Channel Mix Contribution
- Question: Provide channel mix contribution for Q1 FY27 vs Q1 FY26. (Ajit Sethi, Eiko Quantum Solutions)
- Answer: Warehouse sales ~56% in Q1 FY27 vs 50-52% in Q1 FY26; locally made/locally sold ~22% vs ~25%; balance is direct exports. (Tanushree Bagrodia)
Diversification Beyond Ag and Construction
- Question: Any plans to enter aerospace, defense, or automotive precision components? (Ashish Parikh, Individual investor)
- Answer: Business is structured on off-highway supply; TAM is wallet expansion with current customers (top 5 global AG OEMs, top 3 CE OEMs). Below 70HP three-point linkage holds dominant global share; above 70HP is single digit share - the biggest growth runway. Acquisition portfolio targets hydraulics, PTOs, and large fab. If acquisition can serve existing customers while entering new industries, will consider. (Tanushree Bagrodia)
Cycle Positioning and Non-Cyclical Growth
- Question: Where are we in the cycle? Could there be non-cyclical growth given expanded product set and geographies? (VP Rajesh, Banyan Capital)
- Answer: Construction is already growing; small AG recovery just beginning (CY2027 more likely); large AG at trough (CY2026 expected -15-16% decline after -30% in CY2025). New business wins equally split Europe/US and AG/construction; focus on large AG and construction as runways are higher than small AG. Fabrication product portfolio is third strategic pillar. (Tanushree Bagrodia)
Key Takeaway
Uniparts India delivered a strong Q1 FY27 with revenue up 27% YoY to ₹347 crores, EBITDA up 55% to ₹90 crores (margin 26%), and PAT up 64% to ₹57 crores, led by the construction equipment segment (45% of revenue) and new business wins. Management upgraded FY27 growth guidance to a couple of percentage points above FY26's 21%, with H2 expected to outperform H1 as agriculture recovers. Strategic priorities include the Mexico warehouse-led expansion (first deliveries in Q3, mid-single-digit million USD FY27 revenue), disciplined M&A evaluation (6 targets under review), and scaling the fabrication vertical into a meaningful business within 18-24 months. Net cash of ₹190 crores provides balance sheet strength for acquisitions. Key watch points include West Asia-driven input cost pressure, currency volatility impacting margin stacking, the pace of large AG recovery through CY2026-27, and aftermarket normalization from 12% revenue share back toward growth as tariffs ease.