ASK Automotive Limited (ASKAUTOLTD) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to ASK Automotive Q4NFA26 Post Results Earnings Conference Call, hosted by AdFactors P.R. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note that this conference has been recorded. And I hand the conference over to Mr. Roshab Shah from AdFactors P.R. Thank you, and over to you, sir.

Thank you. A very good evening to everyone and warm welcome to the Q4 and FI26 earnings call of ASK Automotive Ltd. From the senior management, we have with us Mr. Kudish Singh Rathi, Chairman and Managing Director, Mr. Prashant Rathi, Joint Managing Director, Mr. Aman Rathi, Joint Managing Director, and Mr. Nadesh Kumar Sharma, Chief Financial Officer. Before we begin the earnings call, I would like to mention that some of the statements made during today's call may be forward-looking in nature, and hence it may involve risk and uncertainty, including those related to future financials and operating performance of the company. Please bear with us if there are any call drops during the course of the conference call. We would ensure that the call is reconnected at the earliest. I now hand over the call to Mr. Kodip Singh Rati, Chairman and Managing Director, for his opening remarks. Thank you, and over to you, sir.

Thank you, Mr. Dushar. Good evening, ladies and gentlemen. It's my great pleasure to welcome you all to our Q4 and FY26 earnings conference call. I hope you have had the opportunity to review the detailed presentation submitted to the exchanges and available on our website. In FY26, Indian economy remains resilient and stands as the world's fastest-growing major economy. As per RBI's recent estimate, the GDP is expected to attain an impressive growth rate of 7.6%. This momentum is driven largely by robust demand, resilient private consumption, strong investment in infrastructure, and enabling government policies. The government of India's GST-20 reforms marks a pivotal milestone that is driving structural shift in the growth momentum across the Indian automobile industry and has energized the broader economy, given the sector's deep forward and backward linkages. GST-20 is being a structural reform, the benefit of which will accrue over a long period of time. After February 28, 2026, geopolitical conflict in West Asia has disrupted the global economy, Posing an unprecedented challenge in supply chain. Creating undue volatility in energy, commodity, and currency across the globe, and it has started affecting Indian economy as well. The phenomenal increase in aluminum alloy prices, in particular, have affected our industry. Despite these challenges, we are optimistic that the growth momentum will remain in the coming quarters. Now, let me begin by sharing a quick overview of the broader industry as reported by SEER. The Indian automobile sector witnessed healthy momentum in FY26, with overall vehicle production across all segments, registering a robust year-on-year growth of 11.8%. The two-wheeler segment matched the overall vehicle production growth at 11.8% on a year-on-year basis. The two-wheeler industry closed FY26, with a strong production volume of 26.7 million units, up from 23.9 million units in FY25. In Q4 alone, production touched 7 million units as compared to 5.8 million in the same quarter last year. I am happy to share. That this year, the tubular industry production volumes have surpassed the previous peak of FY90. Looking ahead, we believe that the industry will continue to gain from the far-reaching macroeconomic policy reforms undertaken by the government, particularly GST-20 reforms, personal income tax rationalization announced in the Union Budget 25-26, Successive rate cuts and liquidity announcement measures by the Reserve Bank of India. These have positively impacted consumer purchasing power and improved access to vehicle financing, created a conducive environment for sustained demand. Rising rural income will also be beneficial for the two-wheeler sector. Since all our products were under the category of 28% GST, hence the reduction of GST rate from 28% to 18% is helping us to outgrow in the Indian aftermarket and capture more market share from grey market operators and duplicators. Happy to share that our independent aftermarket has grown by 24.7% in FY26. We still remain optimistic that the geopolitical situation shall normalize soon, and the growth trajectory of our sector shall be maintained. Before we move on to ASK's business performance, We would like to highlight that on the green energy front, as already shared with you earlier, I am happy to update that our 9.9 MW solar plant at Sivsa Haryana has been fully operational since April 2025 and is delivering the sustainable operational economies on the expected lines. Our second captive solar plant of 11.55 megawatt at Pekaner, Rajasthan, is progressing well and is expected to be commissioned in quarter to FY27. This reflects ASK's special focus on green energy. Moving on to our business updates. I am delighted to share with you that we had a strong performance in the fourth quarter and full year in both revenue and profitability. This is the tenth consecutive quarter of robust performance by us since listing of the company. As already shared in the previous con-call, that our EBITDA margin gets affected due to volatility in the aluminum prices because of the denominator effects. We delivered strong performance in Q4 FY26 in business and recorded consolidated revenue growth of 35.3%, excluding pass-through impacts of significant increase in aluminum prices on revenue, which was 8%, and wheel assembly business strategy reduction, which was negative 2.7%. Overall, our net revenue has grown by 30% on year-on-year basis. We achieved EBITDA of Rs. 140 crore with 31.1% year-on-year crore. EBITDA margin at 12.1%. However, this EBITDA percentage was impacted due to pass-through alloy prices, as mentioned earlier. But for this impact, EBITDA percentage would have been higher by 80 basis points. Thank you. UPS 72 growth with 24.2% year-on-year growth. EPS increased to UPS 3.63 against UPS 2.92 in last year in the same period, up 24.2% year-on-year. As regards our annual results for FY26, we delivered consolidated revenue growth of 16.2%. Excluding pass-through impact of significant increase in alloy prices on revenue, that is 3.1%, and impact of wheel assembly business strategic reduction, that is 7%, overall net revenue has grown by 20.1% on year-on-year basis. Happy to share that again we have outperformed the two-wheeled industry production growth of FY26. Achieved EBITDA of Rs. 551 crores with 24.1% year-on-year crore. EBITDA margin at 13.1%. However, EBITDA percentage was impacted due to pass-through alloy prices, but for this impact, EBITDA percentage would have been higher by 40 basis points. This reflects the result of our continued focus on expanding value-added businesses, improving utilization of production capacities, and bringing cost efficiencies. Our aim is to sustain current level of EBITDA margins and continue our efforts to improve gradually in the subsequent quarters, depending upon the growth of the two-year industry and geopolitical environment. With strong performance, our earning per share has increased to Rs.15.08 per share against Rs.12.56 per share in the last year, same period. Our all three product segments performed well and surpassed the industry growth of 11.8% in FY26 in terms of revenue growth. We have sustained our market leadership position in the advanced banking system. Our advanced baking system revenue grew by 32% in Q4 and 17% in FY26 on year-on-year basis. The aluminum light-weighting precision solutions revenue grew by 47% in Q4 and 30% in FY26 on year-on-year basis. The safety-controlled cable revenue also recorded growth of 26% in Q4 and 14% in F526 on year-on-year basis. Our revenue from exports were at Rs. 141 crore in F526 against Rs. 147 crore last year. The cause of the trade disruptions due to higher tariff rates, geopolitical tensions, supply chain issues, Logistic costs and other water lags, we could not achieve our target on the export front. We have delivered strong returns in FY26 with ROAC at 26.9% and ROAE at 25.3%. The Board has recommended a dividend of 92.5%, that is, Rs. 1.85 per equity share or face value of Rs. 2 each. Another key update, strategic reduction in low-bargin wheel assembly business is now complete, and from 1 April 2026, wheel assembly revenue will be nil. On year-on-year comparison, as FY27 also, our real growth will be 4% higher than the published growth on year-on-year basis. Recent developments in geopolitical scenario and significant increase in minimum wages by some of the state governments has created an input cost pressure on the industry. The customers have been requested to support, and we are confident that all our prestigious OEMs will compensate this input cost escalation. We also remain optimistic on the medium-term industry outlook, supported by improving consumer sentiment, expected benefits from the 8th pay commission, and continued policy support for manufacturing and formalization through labor reforms. These structural developments provide greater confidence in India's long-term consumption and manufacturing growth trajectory. We are confident that it will continue to grow around mid-teens in FY27. Thank you very much for your patient hearing. With this, we leave the floor open for questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch phone telephone. If you wish to remove yourself from the question 2, you will press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ankit from IIFL. Please go ahead. Mr. Ankit, your line has been unmuted. Please go ahead with your question.

Hello, am I audible?

Yes, please. You are very much audible.

Yes, sir. Thank you so much for the opportunity. I just wanted to know if there is any deficiency in margins other than the already called out AKBs impact of pass-through of alloy prices in 4QF26.

No, there is only differences because the alloy prices shot up through the roof, and especially they rose about 10% in the march itself. That's why the whole Q4 margins were affected. Plus, because of the abrupt increase in March in the aluminum prices, some of the aluminum rise could not be passed on, especially in the aftermarket, and there was a conscious loss by us of 5 crores, because every day we cannot increase the prices, and the prices were rising actually every day. But everything has been corrected April onwards, and all these aluminum price rises, which has happened in April also, they have been passed on to the customer, both on the aftermarket front as well as to our OEM customers. Okay.

So, how much would be the price hike in April?

Price hike of what? Aluminium?

Yes.

Yes, on aluminum. The aluminum is abrupt. It has risen from $2.85 to even $3.65, but the price has been given by the customer, you know.

Okay. Got it.

Thank you, sir. In April, we have also increased the prices in the aftermarket, and we said that whatever rise happens, because it's such a volatile situation that we need to pass it on, you know, now.

Right.

But in the month of March, frankly, neither we expected the prices to go up on a day-to-day basis, and nor everybody as an optimist was expecting that the bar will end soon, you know, which, of course, is prolonging at the moment.

Yes, got it. And just another housekeeping question. Can you share what was the utilization at the Bangalore and Saroli plant?

Very, very happy to share that Bangalore, we have reached 90% capacity utilization in the last plant that we set up last year, our 18th plant and the third plant in Bangalore. So the Bangalore, all capacities are full now. In the Karoli plant, the capacity utilization is still 65%. The reason for that is we have made investment for the alloy wheels, and the alloy wheel supplies will, as I said, they will supply to the Japanese customer in H2, beginning of the H2. So this current year, you will see much higher capacity utilization in the Karoli plant also. Okay, sir. Got it. Great, sir. Thank you so much.

Thank you. The next question is from the line of Nitin Agarwal from JM Financial. Please go ahead.

Yes, sir. Thanks for the opportunity, and congratulations on the great set for the number, despite the challenges across the board. I just wanted to understand your outlook for FI27 for the underlying industry. So, where do we see FI27 for COVID industry production volume growth? Are we seeing any production cut by the OEMs, given the challenges that we are facing in terms of exports in the great place? And secondly, on the margin, where do we see the margin going forward, given the denominator impact is going to be there as we have taken the price in April also? So what could be the steady state margin guidance from your end? Thanks.

See, as her outlook of the two-wheeler industry is concerned, all our OEM customers, they are carrying on with their original production schedules, which shows a nice growth in this year also, and none of these supplies have been affected by the raw materials or anything, and as I said, that we have passed on the aluminum price increase impact. So, last year, overall, we achieved a EBITDA margin of 13.1%, and except for the denominator factor, we will be able to maintain that EBITDA margin. Because if the aluminum prices are shot through the roof, then our EBITDA margin will look less because of the higher aluminum prices, but the absolute numbers, what we have planned in the next financial aid will remain the same.

Okay, okay. And one more question with regards to AGS implementation. We don't see anything. Do you hear anything or any update out there if it is going to be implemented?

We are not aware of anything, and after that, nothing has come.

Okay, okay. Thank you. That's it from my side. Thank you.

Thank you. The next question is from the line of Rahul Kumar from Novama. Please go ahead.

Yeah, hi. Thank you for the opportunity and congratulations on a strong quarter. On the independent aftermarket segment, it has grown by 25% year on year in FI26. So what has driven this strong growth and how do you see the outlook for this segment in FI27?

See, I have been explaining right from beginning in each and every quarter that we were suffering on the GST front in the independent aftermarket because of the 28% GST. The government was kind enough to revise it to 18% in GST 2.0, and as soon as it was revised, our sales in the independent aftermarket shot up because we could snatch some share of the gray market operators and the duplicators in the aftermarket. So that's how this stupendous growth, and we do feel that this year also will be maintaining a good growth in the independent aftermarket.

Thank you. On the second question, how do you see the export outlook for FY27? And on the full order, can you talk about the execution timeline and also if there are any new order wins that can support export growth ahead?

See, this year we are very confident of growing at 20 percent, of course, provided the geopolitical situation remains reasonable, which we are, as an optimist, which we feel that it shall be sorted out soon rather than late, you know. So if it is sorted out, we have the orders in hand, and we are definitely going to grow at 20 percent.

Okay. Lastly, on FI27 CapEx plan, what would be the CapEx for FI27, and are there any plans on new investments which can help in launching new products in FI27?

So the products that are going to be served to the customers, we have already invested, because we go one year in advance, but for next year growth of mid-teens, we need to invest around 400 crores, which we shall be investing in this year also. And all this internal equivalence, free cash, will be brought back in the company, and so we will see to it even the debt levels are contained within the limits.

Lastly, what is the revenue expectation for FI27 and FI28?

FI27, we are expecting revenue of around 90-100 crores, and FI28 will be about 220 crores.

Thank you very much. That's all from my side.

Thank you. The next question is from the line of Mrunmaye Jogalkar from Atsutsi Mehta Investment Inter-Military Race. Please go ahead.

Hi, sir. Am I audible?

Yes, please.

Yes, thank you for the opportunity. Sir, firstly, I wanted to ask that in Q1 so far, have we faced any production disruptions as such?

No, we have not faced any disruption in the production side. Okay. Even the orders from the customers are also robust.

Okay, great, sir. And so, you touched upon the fact that, you know, the employee costs have been inching up and you are in negotiations with the customer, but can you quantify by how much have the costs increased and any timeline as to when you expect some pass-through to happen on that side?

So, see, whatever the aluminium prices, the customer is already compensating us. As far as regarding the wages, everybody knows the government has increased the wages, and whatever the government wages increases, it's always compensated by the customers. So, we don't see the margin pressure on that side. Of course, maybe the customers will need to increase the prices of the vehicle by some percentage.

But we might see the impact of that in Q1 at least, and then probably with the lag, the benefit will be.

No, no, it's hardly an impact because the wage increase. But I feel optimistically, the money remains in the country only, you know. We give more wages to the workers and that class, and they have more buying capacity because more money in their hands. And if the price is increased by 1,000, 2,000, it should not make a difference to the overall sales in the sector.

Got it, sir. And, sir, a slightly, probably medium-term question, like with rise in alloy prices, it could be just a near-term impact, but then does it become a tougher conversation to probably increase our wallet share in the Alps segment or for the alloy wheel business?

No, the content will not increase, the content you are asking, so the content will not matter. Only thing is, sometimes, as we clearly mentioned, you know, this year also, we are very transparent in our reporting that our overall revenue in the quarter looked 8% more, you know, sales growth. But that was only aluminium price increase, nothing else, you know. But then also we talk, we also talk of the real net growth, every quarter and every year.

No, I mean from the OEM side, does it become a conversation that you know whether to go for aluminum or to stick with steel for certain component because of the price differential?

So at all, in two-wheeler segment, there is no such conversation till now.

Okay, sir. Thank you for that.

Thank you. Before we take the next question, we would like to remind participants that you may press star and want to ask a question. The next question is from the line of Michael Sells from LQT. Please go ahead.

Thank you. Could you please give me your thoughts on what would happen if the monsoon is deficient this year? Given your sensitivity to the two-wheeler industry, we could expect some weakness versus your expectations, or has that not historically been the case for you? Thank you.

This monsoon, if it is deficient, it certainly affects the agriculture income that everyone knows, but we can't quantify the impact that it will have at the time come. And many of the times the forecasts have been reversed also, because last two years also they were saying LD no factor, which never happened, you know. And maybe the government increases the MSP prices of the farmer's crop and they get duly compensated because of that.

And thank you, sir. And last time there was a deficient monsoon, was there a material impact on your business or not really?

I think not in this. Maybe we'll see what happens next year, but this year seems to be good.

Sorry, sir, I'm not clear. Last time there was a bad monsoon, what happened to your sales?

The last time, when was the deficiency? Sir, we don't clearly remember. Sorry, I don't want to give a wrong data to you, but I don't think we were much impacted, because we got impacted, yes, two-wheeler sector got impacted only when COVID came. So, that was a big impact. Before that, till 18, 19, we don't even remember that. After that, there has not been any deficient monsoon.

Okay, thank you. The next question is from the line of Rishi Kapadia from CLSA. Please go ahead.

Thank you so much for taking my questions, and congratulations for such good set of results. I have two questions. One is, if let's assume that government comes up with a mandate of EBS, But it is still fair to assume that majority of our sales in the braking system is through independent aftermarket and OES, so the impact would be relatively lesser for us, considering we are not directly selling majority of our sales to the new vehicles, and catering major to the population of two-wheelers on hold. That's one. Second, if I look at the two-wheeler EV revenue for us, it is more or less growing at high single digit in F526. Is that correct? And if yes, versus the EV volume growth for the industry, it is relatively lower. So anything to kind of call out there?

I'll take your second question first. The EV segment is growing still at single digit, and we are also growing with the EV segment. As you are aware, we are OE2, almost every EV manufacturer in the country, so EV OEM, so we are supplying to them, and so we are growing as they are growing, you know. And one of the major customers has grown less in this last year, which is Ola. That was quite a major customer. But still, we have taken the other customers and good share in that, and we are growing. So if the EV sector now grows further in double digit, we will also grow in double digit. So that's the first question. Regarding the first question, I think that's a very hypothetical question, and I'm sorry I can't answer on that.

Thank you.

Thank you. The next question is from the line of Yash Agarwal from Mermalbang. Please go ahead.

Hi, sir. Thank you for the opportunity. I just wanted to know your capex outlook for FY27. FY27 will be spending about 400 crores. And what will be the breakup of the capex exactly?

Capex breakup is very little is the maintenance budget, that's about 40-50 crores, rest is all the Capex for the new plant capacities, you know, which we keep on adding.

And also there's one bookkeeping question, like the working capital is negative in the FI 26, any particular reason why it was so negative, what was the key item, is it there in that?

This is due to sudden increase in aluminum prices in the month of March, and the impact is on the balance sheet date. That's why it's looking like that, because the pricing to the customers takes time to pass on in the terms of NYC, so there is increase in debtors here, in receivable share, and I think that is the only reason.

Okay, so, like, going forward, we will expect them in coming quarters to reverse, right?

Yes, yes, yes. It will normalize.

And my second question is basically on the strategic partnership that we have with Leo and Kyushu on the alloy wheel. So, where are we right now, and when can we expect them to contribute to our overall top line?

The second partnership is also, as I have always mentioned, under testing, and we are very confident that something should come out before H2M.

And the update on the cable JV with TD holding.

GCD cable holding, the production has come out, and to the system suppliers, I have audited the plant, and the supplies again will start in H2.

And are current capacities basically sufficient for the initial level of order for both?

Yes, yes, yes. That already we have set up, you know, because... As you know, last two years we have invested heavily, and now they are giving the results, you know.

Okay, sir. That's it. Thank you so much.

Thank you. The next question is from the line of Sahil Sangri from Monarch Network Capital. Please go ahead.

Thank you for the opportunity and well done to your team and yourself for the good results. My first question is, looking at the 35% growth that we've done this quarter, even if I remove the impact, Roughly 8% of the price passed on. Then also we have outperformed the underlying industry, which grew, two-wheeler industry, which grew by 20%. So what's exactly driving this growth? Is it a wallet share expansion in our current customer base? Or how would you explain this?

Mr. Sahil, with God's grace, that's the track record of the company that for the last 30 years we have been outperforming the industry. So I think that's what we have done in the last quarter.

Great.

And that's what I just said, that we'll outgrow this year also, current year also.

Right. And so there was on the alloy wheel side, the first product was expected to be out in February. So if you can give us some update on that front.

That's already out. It came out on scheduled time from the Karoli plant and handed over to the Japanese customer. And that's what I said that as to beginning, the supplies will start.

Right, right. And sunroof also, we are on track?

Yes, it's very much on track. The plant has been audited by the sunroof system suppliers, and I think again the same time as to all the previous ventures shall bring fruit, you know, and the supplies will start.

So then, including this incremental revenue that we can expect something from Sandroof and from Alloy Wheels, this is the 20% guidance is including all of this, right?

We have not given you 20% guidance. We have given you mid-teens guidance.

Okay. Okay. Thank you.

Thank you. I would like to correct that.

This is including me, sunroof and alloy wheels, right?

Yes, naturally, naturally, because how you outgrow the industry? You add new products, you add more content, you know, and you add new customers. This is how you grow, you know, there's no rocket science in outright.

Sure, thank you. Thank you, sir.

Thank you. Participants who wish to ask questions may press star and 1 at this time. The next question is from the line of Preet from Ingrid and AMC. Please go ahead.

Thank you for the opportunity and congratulations for the good set of viewers. So just adding on to the last participant's question, like you mentioned, we have been outgoing to industry from the past couple years. And by adding new products. And so what was the reason exactly the reason behind this year that how we outgrow the market? And what would be the reason that we would be going out with the outflow in the market in F727?

I just now told the answer to this question that one is the historical reason because we have been outperforming and that we continue to do so. Second thing is that whatever joint ventures we signed or the collaborations we signed, they will bring fruit in the coming year. They'll start bringing fruit from H2 onwards, you know, and they will totally fructify in the next year. So these two years will be outgrowing, you know, again, because of the new products, and meanwhile, we keep on adding small, small new customers. They start small after a lot of testing, and then they grow, you know, and have a natural growth. Am I clear?

Yeah, thank you, thank you, sir. That was helpful.

Thank you. As there are no further questions, I now hand the conference over to Mr. Kuldeep Singh Rathi from ASK Automotive Limited for closing comments.

Thank you, ladies and gentlemen. Thank you very much for sparing your valuable time and attending the conference, earnings call, and we would like to reassure you that again this year we'll be working hard and we'll try to come up to your expectations. Thank you very much.

Thank you. On behalf of AdFactors PR, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.