Carraro India Limited (CARRARO) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q4FY26 Earnings Conference Call for Kararau India Limited. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and it may involve risks and uncertainties that are difficult to predict. 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 your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Dr. Balaji Gopalan, Managing Director. Thank you, and over to you, sir.

Okay, thank you, and very good morning to all of you, and thank you for joining us today for Carraro India Limited's Q4 and FY26 earnings conference call. I am Balaji Gopalan, Managing Director, Carraro India Limited, and I am joined today by Mr. Davide Grossi, our Goal Time Director and CFO, Mr. Sudendhar Manikar, our Goal Time Director and COO, Mr. Ashok Rai, Director, Sales and Business Development, along with other members of our leadership team, and our Investor Relations Advisors, Strategic Work Advisors. We appreciate your continued interest and participation. FY26 was an encouraging year for the Indian off-highway industry, particularly for the agriculture equipment segment. The Indian tractor industry crossed the 1 million unit milestone during the year, supported by favorable monsoon conditions, improved rural cash flows, healthy reservoir levels, and continued momentum in farm mechanization. The GST-led narrowing of the price gap between two-wheel-drive and four-wheel-drive tractors further accelerated the structural shift towards higher-value four-wheel-drive tractors. On the construction equipment side, the domestic market remained relatively soft. With industry volumes declining by approximately 2% year-on-year due to slower infrastructure execution and delays in project activity during parts of the year. However, exports from India remained robust. Growing by nearly 32% reflecting improving global demand for Indian manufactured construction equipment and strengthening India's position as an export hub. Against this backdrop, Carraro India delivered a strong operational and financial performance during FY26. Revenue from operations grew by 25% year-on-year to over 2,255 crore, supported by healthy growth across domestic and export markets. Domestic revenues increased by 19% year-on-year, driven by strong demand for agriculture drivelines, particularly four-wheel drive access, while exports grew by 37% year-on-year, led by sustained momentum in construction equipment applications. Importantly, profitability improved in line with the guidance we had shared during the year. EBITDA increased by 33% year-on-year to Rs. 2475 million, while PAT grew by 48% year-on-year to Rs. 1306 million. EBITDA margins improved to 10.8% in FY26 compared to 10.2% in FY25 despite changes in product mix during the year. Margin expansion was driven by operating leverage, disciplined cost management, localization initiatives, and execution efficiencies across operations. The consistency of execution across both growth and profitability reflects the strength of our business model, customer relationships, and operational discipline. To give you some business segment updates, We'll look at domestic agriculture business. This has continued to perform strongly during the year. The transition from two-wheel drive to four-wheel drive tractors accelerated meaningfully following the GST reduction, which reduced the effective price differential between the two categories. Industry shift has resulted in higher demand for technologically advanced driveline systems and larger axle platforms. As a result, the domestic four-wheel-drive axle market witnessed robust growth, with four-wheel-drive tractor growth significantly outpacing the broader tractor industry. In anticipation of this demand trajectory, we are continuing to ramp up capacity and strengthen manufacturing capabilities to support future growth requirements over the medium term. Now, looking at construction equipment business, the ramp-up of the new range of Teleboom Handler or TLB at TBH axles, Teleboom Handler axles for a major international OEM progressed well during the year. We continue to witness healthy traction in this program and maintain strong visibility for structural growth over the coming quarters. In addition, projects with domestic customers including both Indian and global OEMs for the TBH axle family are progressing as planned. In the backhoe loader segment, our performance remained resilient despite broader market weakness. Sales of drive lines to Indian construction customers increased by approximately 9% during FY26 even as the domestic construction equipment market declined by around 2%. Similarly, sales to backhoe loader customers recorded positive growth despite the broader BHL declining by nearly 10%. This performance highlights the strength of our customer engagement, product relevance, and market positioning. Coming to higher horsepower transmission business, the export market for these higher horsepower tractors is gradually recovering, which should support transmission of tech going forward. Our higher horsepower transmission projects with customers in Turkey and customers in India continue to progress well. We expect SOP start-up production for the Turkey program during FY27, while the Indian customer program is expected to enter production by FY28. We believe higher horsepower transmission platforms represent an important long-term growth opportunity as farm mechanization trends continue globally. Gear business remained relatively subdued during FY26. However, we continue to strengthen the business pipeline and diversify the customer base. During the year, we secured a business nomination for a major OEM for bull years, valued at approximately INR 150 million annually, starting at Y28. We are also working on two additional customer programs, which we should support gradual recovery and improved utilization over the coming quarters. Engineering services... Business continued to gain traction and reported revenues of approximately INR 100 million during FY26. Encouragingly, we are witnessing increasing customer inquiries for higher horsepower and advanced technology configurations, reflecting growing confidence in our engineering capabilities. During the year, we signed an engineering services... Agreement worth approximately INR 175 million with Mantra Electric for the industrialization and supply of electric transmissions for tractors. The project is progressing well, and we have already received prototype orders for field validation. In parallel, discussion with another customer for engineering services are progressing positively and continue to pursue additional opportunities in this segment. Over time, we expect our engineering services and future-ready driveline technologies to become an increasingly meaningful contributor to growth and profitability. On the manufacturing front, we continued to invest in technology, capacity expansion, and operational efficiency improvements. During FY26, we deployed CAPEX approximately of INR 417 million towards new telescopic handler axle production, high-performance transmission programs, incremental manufacturing capacity expansion. We also continue to strengthen our aftermarket ecosystem through the expansion of authorized service centers, which should support customer experience aftermarket growth and stronger engagement over the long term. Localization remains another important strategic focus. Outlook Looking ahead, we remain positive on the medium- and long-term opportunity landscape. The momentum built during FY26 validates the strategic investments and business initiatives undertaken over the last few years. We believe Carraro India is entering its next phase of growth with a stronger business foundation, increasing localization, enhanced engineering capabilities, a growing export business, deep customer relationships, and expanding opportunities in advanced driveline technologies. With improving industry sentiment, expanding opportunities across domestic and export markets, and strong execution momentum, we remain confident of achieving revenues of around 3,500 to 4,000 crore INR by FY30, exceeding our earlier target. For FY27, we are currently maintaining our revenue growth to be realistic and cautious, but we are supported by healthy underlying demand. However, we are closely monitoring the evolving macroeconomic and geopolitical situation, particularly developments in West Asia. Any sustained raise in energy prices or supply chain volatility could lead to some production and supply-related impact, especially in H1, FY27, and potentially extend to H2 if the situation persists longer than anticipated. On profitability, we continue to target EBITDA margin improvement during FY27, supported by our continued focus on localization, operating efficiencies, value-accelerated product mix, and disciplined cost management initiatives. While the near-term operating environment may remain somewhat volatile, we believe these structural initiatives will continue to support gradual margin expansion going forward. With that, I would now like to hand over the call to Mr. Davide Grossi, our CFO, to discuss the financial performance in greater detail. Davide Grossi.

Thank you, Balaji, and good morning to everyone. I will now take you to the financial highlights for Q4 and financial year 2026. Starting with Q4, revenues from operations for Q4 at Q26 to that $6,067,066 crores, representing a strong growth of 37% year-on-year. The total income grew by 37% year-on-year to rupees $6,142 million. EBITDA for the quarter stood at rupees 710 million, reflecting a growth of 45% year-on-year, while EBITDA margin improved to 11.6% compared to 10.9 in Q4 FY25. Our profit after tax for the quarter increased by 76% year-on-year to rupees 417 million, with path margin improving to 6.8%. From a segment perspective, agricultural vehicles revenue increased by 37% year-on-year to rupees 2,784 million, while construction vehicles revenue increased by 36% year-on-year to rupees 2,613 million. The porter benefited from strong export momentum, healthy domestic agricultural demand, and improved operating leverage. When you look at financial year, at the full financial year 26 performance, revenue from operations stood at 22,55 million, 2,255 crores, up by 25% year-on-year. Our total income increased to rupees 22,840 million. Of the total other income during the year, approximately $83.8 million pertains to the reversal of a provision previously created for vendor payments. EBITDA increased by 33% year-on-year to represent $2,475 million, translating into EBITDA margin of 10.8% compared to 10.2% in FY25. Profit after tax increased by 48% year-on-year to rupees $1,306 million, with a tax margin improving to 5.7%. Segment-wide, agriculture vehicles' revenue stood at $10,192 million, up 19% year-on-year, and construction vehicles' revenue stood at $9,837 million, up 31% year-on-year. Geographically, our domestic revenue stood at $14,430 million, contributing around 64% of our total revenue, and core revenue stood at $8,125 million, contributing around 36% of total revenue. If we look at our balance sheet and cash flow, we can say that our balance sheet positions strength and pardon during the year. Death to equity improved to 0.27x as of March 2026 compared to 0.42 in March 2025. Our return on capital employed improved to 29.2%, while the return on equity increased too. On the dividend front, The Board of Directors has recommended a final dividend of rubric 6.75 per equity share for FY26, resulting in a payout ratio of approximately 30% subject to shareholder approval. The proposed dividend reflects strong financial performance, healthy cash flow generation, and contains commitment towards delivering sustainable shareholder return while supporting future growth investments. We remain financially well-positioned with a healthy balance sheet, improving profitability profile, and sufficient liquidity to support strategic investment and future growth initiatives. With that, we would like now to take your questions.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Our first question comes from the line of

Rago Nandan, NL, with Nuwama Research. Please go ahead.

Good morning, team. Congratulations to Balaji, sir, and Davide, sir, on a strong FI-20 fix. First question. For FI27, can you please indicate the exports outlook as underlying industry expectations are turning positive and even the tariffs seems to have moderated in U.S.? In FI26, there are supplies to major global OEU. FI26, and how do you see the expectation for FI27?

Yeah. Thank you very much. Good morning, and thank you for your compliments. A question I think Ashok Rai is the most competent to give an overview, so please, Ashok. Yeah, Ashok here.

See, when we talk about the export market, there are two aspects. One is the agricultural, and other is construction. And in agricultural segment, as you rightly mentioned, the impact of the duty seems to be stabilizing, but still the uncertainty remains, but there could be a slightly increase on the export side, especially in the U.S. This is what we are anticipating based on the forecast we have received from the OEMs who are exporting to the U.S. This is per suspect. Second, we were expecting that the Turkey market, which started showing some kind of improvement in the last six months, is again showing some kind of a stabilization or downturn. But nevertheless, it will also be subdued in terms of the agricultural export. But when it comes to the construction segment, we are seeing the positive side of the order book. We are frequently getting additional orders for the subsequent quarter. In the next six months, the visibility is there. We are getting the order for the export market. So that is on the positive side. In the domestic market, knowing the inflation and the way the subsidies are being given for the fertilizers, we don't know how much the money will be left for the investment in the infrastructure project. Depending on that, the construction market is expected to come back or remain at the lower level as the previous year. As you know, the construction market has declined in this year in the domestic market. So we have to see whether how much investment remains with the government after all these subsidies and the cost increase. On the agricultural side, there are, of course, the monsoon is expected not to be good, but at the same time, the reservoirs in India are full. And they are in a better shape, and depending on the rain distribution, how the farming is done, it will define the tractor growth. Now, the expectation from industry is the single digit, somewhere in mid-team, there will be a growth, back to when the industry has peaked this year to around 12 or 1.2 million tractors. Nevertheless, since Carraro is in the four-wheel drive transition phase, we expect that Even though market will moderate, the transition of the two wheel drive to four wheel drive remains more than the market growth.

Thank you, sir, for the details. Can you indicate for FI26 how much was the revenue to the major global OEM for TV hedge and back home, and how do you expect for FI27 based on the orders received?

When we talk about the export customer, the... The guidance remains same level. So, we are more or less on the track, especially on the TBS. We mentioned that in the next two to three years, we'll be growing by 10 million, additional 18 million like that. So, that is happening in the subsequent year. And maybe by 29, we will have that 30 million revenue from the TBS business. So, that is in track at the moment. And when it comes to the backflow loader exports, At this point of time, the author book is good. I will say good means it's not bad, but we have to see how it remains, knowing that the inflation and every six months, every three months, every two months, there is a change in scenario in terms of the geopolitical situation.

My second question was on the iron cost. In Q4, there is some increase in raw material as a percentage of revenue, and is this due to commodity inflation, higher rate cost on imports, or is there any aspect of product mix also? And generally, how much lag is there in pass-through?

Good idea here. Regarding Q4, I would say that the major driver of that increment of the material percentage on total sales is actually the adverse mix that we have faced during the quarter. So it's not a major issue in terms of increase of the material cost or transportation and so on as of now.

The second thing you asked regarding the commodity recovery.

Yeah, yeah, yeah. So, usually, the majority of our agreements with customers foresee an adjustment over a period of three months. Then there are, of course, some exceptions here and there, but you can take three months as a most common and average timing for that.

Thank you. Can you indicate for SI27, how do you see the growth outlook? Would you maintain that range of 8% to 12% growth for revenue? And how do you see the margin expansion, if you want to give a range in terms of how much expansion we can expect?

Yeah, I'll come in for this. Raghu, see the whole situation today is a bit volatile, okay? We, in normal condition, and the way we are launching our products and the response we are getting from the OEMs, very clearly reinforces our earlier guidance of 8% to 12%. That is still the situation if things return back to normal. Okay. But in current situation, it is going to be a speculation to say what we will land in. So we have to wait and watch. Certainly, we will have a positive growth that will happen this year. 8 to 12 can become probably 4 to 8, but these are all speculation. We are looking at a very strong demand that will come up. OEMs are all cautioning us to keep our capacities and supply chain intact, so it's a matter of time. When that kickoff is going to happen, I guess time will tell, but to answer your question, We are not looking at shrinking our revenues or going down the current levels that we have reached. It will be positive. How much? 4%, 6%, 8%.

Next question comes from the line of Sonal Gupta with HSBC Asset Management India. Please go ahead.

Yeah. Hi. Good morning, sir. And thanks for taking my question. And many congratulations on the seller performance in SY26. I mean, really, after the first half, you're not sure if you're going to meet the margin target, but I mean, you have. So congratulations on that. So just on margin itself, I wanted to understand, like, last year you talked about that we will be improving our margins by 100 basis points every year. And while you indicated a positive outlook, you sort of refrained from saying that we will sort of be able to do that sort of an improvement. So just wanted to understand the push and pulls here and in what scenarios can you improve by 100 basis points.

Yeah, thank you very much again for your recognition of the results that we have brought in, in line with the guidance we have given in the past. Our endeavor and our philosophy has always been to say what we can do and do what we have said. So that consistency is very important. So when it comes to questions like the EBITDA guidance in a situation like this, very honestly, I feel a little uncomfortable to give any number because it's not really in our hands to defend it at a later time. But having said that, All our initiatives are giving us the desired result that we were looking at. These disruptions do have an impact on marginality because sometimes we have to ensure that the customer gets the priority, they don't lose their market share. So it becomes important for us to sometimes stretch ourselves to meet customer needs. So this kind of turbulent time, uncertain time, it's very difficult to give a guidance. But nonetheless, I would surely say that we reach 10.8, we will move upward, we are not going to slide backward. Whether we reach 11.5, 11.7, 11.2, that is again dependent on the revenue that we will get, the product mix that will happen. So, a lot of things getting into it, the pricing of the energy costs and others, the So many things are involved. Even labor availability has become a problem. Migrant labor have all gone back. So the labor cost has also gone up. If all these things stabilize, then we are back to our original guidance. But when this uncertainty is there, we would like to be cautious and not put our foot in our mouth. But at the same time, I will confidently give a message to the shareholders that profitability will go up for sure. We will not decline. We will not go back in the margins that we have reached till now. Have I answered your question? Not to your satisfaction, but I tried my best.

No, no, no, it's fine, sir. I understand from a shorter-term view, but I just wanted to understand, like, from a medium-term perspective, do we still maintain our trajectory on the margin improvement side?

Yes, the margin improvement side is parallelly going on. Once this disruption, the cost of disruption that is absorbed, then we are back to this normal highway speed. Now we are, you know, maneuvering the portals that are there in front of us, but we will catch up, we will make it up. See, the larger picture, if you see, if you talk of next 9 months to 12 months to 14 months, surely all these things will get covered up. We will not be going downwards at any point. It will only be upward. How steep it is and where we will end depends on how soon the normalcy comes to us. That is more important. As it prolongs, then, you know, the recovery also gets prolonged by that much. But recovering is there. End of the tunnel, we can see we know what to do to get back to the original guidance that we have given. We are on top of things. We have a control watchtower at a group level and at every regional level. The watchtower interacts with each other every day. We will also assess situation, collect data, crunch the data, and anticipate our actions. With all these things, we are confident that we will come out quite comfortably with our best foot in front.

Yeah?

Sorry. Yeah, thanks, sir. And just one more question on the domestic four-wheel drive tractor market. Could you sort of tell us what is the sort of size of the market? I understand now it's like 20% of the domestic industry. And what sort of growth has the industry seen? And what sort of growth have we seen? And how much outsourcing is there now? And how much is being done in-house? If you could just give us a sense on that.

Yeah, sure. Ashok will deep dive into it.

Yeah, Ashok. Yes, Ashok here. See, this year again, after the GST in September when the government reduced it, the transition from two-wheel drive to four-wheel drive has accelerated, especially about 40 horsepower. And as you rightly said, around two years ago, or the last year, it was around 20-22%. So this year, since we don't have our formal data, as I always tell you, we collect it from the OEM, and we just estimate it. And our estimate tells us this year, we have closed almost by 24% as a four-wheel drive market above 40 HP, because we operate in the 40 HP and above segment. So the market has touched around 24%. Now, moving forward. Even today, the market is at the peak in terms of total number, which is almost 1.2 million, and market is expected to grow almost 2 or 3 percent or 5 percent, but within this, the fossil dry segment will go up. Because customer will not go back to two-wheel drive, whosoever has bought the four-wheel drive, like the earlier power steering, nobody goes back to the manual steering. So that expectation is there, and even the demand indication as well as the capacity requirement by the OEM also indicates that the transition of this four-wheel drive is on, and we expect that another three to five years it should be almost 40-45% of the market.

Got it, sir. So, my just follow-up on that was that how much of this market on the four-wheel drive axles is being outsourced to external players like you, and how much are OEMs doing in-house?

Just a guess. As I said, I don't have the formal data, but it is 60-65% is outsourced, and 30-35% is with OEMs today.

Okay. Okay. And sorry, I think you mentioned on the domestic agriculture, so four-wheel drive, we would have grown like overall 30-35%, right? Yes. Yes.

Yes. Yes. You are right. You are right.

Okay. Great, sir. Thank you so much and wish you all the best.

Thank you. A reminder to all participants, you may press star and want to ask a question. The next question comes from the line of Ashok Shah from Eklavya Invesco Family Office. Please go ahead.

Thanks for allowing me. Four-wheel drive and three-wheel drive. So, currently, there is no incentive to increase or incentivize four-wheel drive. So, how we would be able to grow over next few years, and what could be our size over next two to three years due to the safety point?

Okay. So, I'll first come to the two-wheel drive versus four-wheel drive in tractor. Okay. We have explained in the past very well that two-wheel drive is a very, very basic mechanical equipment, and two-wheel drive tractors were introduced 50, 60 years back as part of the Green Revolution and to save the bullocks and hawks, animals being used for farm. Vinoba Bhave, thanks to him. So, it was a replacement for Bulacat, a very basic mechanical product was launched at low cost. Unfortunately, that technology, because of low cost and the Indian culture to retain old products, we continued with it for a very, very long time. The world moved ahead, and in developed countries, nearly 95 to 98 percent is four-wheel drive. They don't sell two-wheel drive factory at all. Okay, sir, for you also, I will take two more minutes. If you see farmland, farming area is a wet area, and even a car, if it is slushy, if there is mud water, a two-wheel drive car gets stuck in it. So, can you imagine where the work of the tractor is in a wet land? To operate on a two-wheel drive is the most, I would say, unfavorable condition to operate. So, naturally, you need four-wheel drive. Now, India has realized it, and for food security and farm efficiency, we need these kinds of four-wheel drive tractors not just to operate, but also to operate implements that are required for mechanization in the farm. Farm mechanization is driven by tractor. So, it becomes very, very important to have the appropriate equipment in the farm, and that is where India is moving. Five years back, four-wheel drive was hardly to 3%. Today, we are talking in the range of 20 to 25% and moving to 40%. What is the incentive? The government indirectly has given incentives in the last year, one and a half years, in certain pockets in Haryana and Punjab for higher horsepower tractors or four-wheel drive tractors to check a pilot on how the efficiencies are improving. The results have been good. What is, again, the financial motivation for a farmer to go in for it? GST reduction by the government came in at the right time. So the differential between the cost of a two-wheel drive tractor and a four-wheel drive tractor has now almost vanished because the cost differential was more or less the same as the GST reduction. So that gave a boost and that is the reason this quarter we saw a higher uptake of four-wheel drive and we expect that it will continue as well. Technology absorption initially is short, but once people experience it and social media and other community cooperative activities, they start pushing for a better vehicle that is available. So this is in short about the trajectory of four-wheel drive and why we are pitching for it and working on it. Fuel efficiency, there is an ROI that happens because two-wheel drive, there is a lot of slippages. You keep accelerating to get out of the pit or the sludge, whereas in a four-wheel drive, you don't need to keep accelerating and making the vehicle jump out of the sludge. So there is fuel saving. Cost of acquisition has more or less become the same as two-wheel drive. The world is moving. Technology is better. Awareness of our Indian citizens has improved. All these things are fertile grounds for the product to penetrate into the market. So there will be a structural shift into four-wheel drive, which is visible now. I hope I have answered your question, sir.

Yeah, and my second question is regarding good corporate governance. We are holding a physical annual general meeting. So, if it is possible, please hold the annual general meeting in the plant. So, plant visit can be also simultaneously completed and cost can be saved for the five-star auto also. That's all also.

Thanks from my side. Oh, yes, sir. We will consider your input. Certainly, it has a valid point. But logistically, we will have to see because the plant is about one and a half hours and there is a lot of construction work on the highways going on. So, we are open for a plant visit. That is not an issue. We can always arrange for people who want to visit it after attending the program. But we will also reconsider looking at the time that takes to travel to Ranjang now. We can do it. It will save time plus we will be proud to show our facility. So in any case, you are most welcome to visit the plant on that day or even separately we will arrange for plant visits for any of our shareholders.

A reminder to all participants, you may press star and want to ask a question. The next question comes from the line of Raghunandan, NL, with Novama Research. Please go ahead.

Thank you, sir, for the opportunity again. Firstly, on FI27 capex, can you indicate how much is the plan? Would it be in that range of 130 to 140 crores?

Yeah, we confirmed that amount, more on the 130 than 140, but we will be in that range. As of now, everything is confirmed.

Thank you for that, sir. And one clarification. Other income in FI 26, within that amount, can you indicate how much was the export incentives? Like other income was about...

We have reversed that. So out of the 200 which are remaining, more or less 75% is export intended, so roughly 150.

Understood. Thank you. And also, for the exports, can you please broadly indicate the geography mix, like we supply to U.S., Europe, U.K., China, Latam, approximately if you can indicate what can be the mix between various key regions.

See, here it's a bit more complicated, also because... There are two levels of complication. The first one is that, as you know, we operate as a contract manufacturer, so we invoice everything for our quarter, and then the goods go in different geographies. But a second layer of complication is that even if we ship something to a specific country, often this is the country where our OEM has an assembly plant. And then they distribute all over the world. So it might even be kind of misleading if I give you any number, but roughly you can say that Europe remains our main market when we talk about export. Turkey has become more and more relevant. China was also quite relevant. Latin America. It's also around 10%, if I'm saying it's 90%, yeah, you have 90% of our export, I think Europe represents. I think China is under 8 to 10, possibly.

Even when polluted in China, it goes to Latin America, for example. That is what Dangde was hinting. See you next time.

Thank you for the details. That's all from my side.

Participants, you may press time 1 to ask a question. The next question comes from the line of Mustafa Arif with Nine Rivers Capital.

Please go ahead. Hi. So congratulations to the team, and thank you for taking my question. So I just wanted to ask that recently the largest domestic OEM sort of spoke about their new transmission platform in one of their sub-brands and how they are holding that out across the country. So, in a staged manner. So, I just wanted to understand how, what has been our contribution over there, and is this a sort of shift for us in our business from in-house to sort of an outsourced model?

Sorry, Ashok here. See, it's very difficult to comment on the ambiguous question because you have referred an unknown OEM, but there are various programs that are going on with the OEMs. Thank you. We are also working with Savraj, we are working with many other OEMs on the new platform, and as you know, we are in a specialized segment, so if they are below 25 or 30 HP, probably will not be there. Example, I am saying it. So, it is very difficult to answer on behalf of the OEL, but from Kararo point of view, we can say that today we produce up to 150 HP range of transmissions in Kararo in India. And the Indian OEMs are having a design which is up to 60-65 horsepower range for the domestic market. Whenever any technology shift is happening, those technologies are locally available with Carraro in India because we are producing it for past more than a decade, those new technologies which are not even taken inside the local market as a tractor feature. So the programs are going on with the OEMs. At various platform levels. There could be some platform they are making it themselves, and some platform with us.

All right. Thank you. And also, if you could give a little bit more color on the gross margin decline, you know, you mentioned that it is product mix, but do you mean product mix within, you know, your configurations, or do you mean between agri and construction equipment? How does that work?

It's between our range of products, our range of axles, and mostly if we refer to agriculture range. So this specific quarter, we had a boost that went even beyond what we were expecting of demand of a certain category of axles. We wanted to dispatch, we wanted to, you know, make the customer happy, but we had to compromise a little bit on, let's say, the cost efficiency to maintain the, you know, the continuity of the supply. So that led a bit down the gross margin, but at the same time, it helped us to absorb fixed costs in a better way. So all in all, it was a beneficial price.

Thank you. The next question comes from the line of Shriram, an individual investor. Please go ahead. Thank you for the opportunity.

So, I just have one question. Can you please share the absolute sales favor of four-wheel drive axles for the quarter and also for the year? It's very difficult in terms of informing because we have a mix of the turnover because the transmission and access are sold together and normally we don't give the break-up as a guidance. But for sure, the numbers are like when we said 30% we have grew, in the previous question we said that 30% we have grew, the last year when the market has grown 22%, similarly our revenue has also grown by those 30% and the numbers also.

Thank you, ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for their closing remarks.

Thank you, everyone, for joining us today.

And for your continued support and trust in Terraro India Limited. We remain excited about the opportunities ahead and confident in our ability to deliver sustainable and profitable growth over the coming years. We hope we have addressed your questions satisfactorily. Should you require any further information, please feel free to reach out to Strategic Growth Advisors, our Investment Relations Advisors. Thank you once again, and have a great day ahead. Thank you.

Thank you, sir. Ladies and gentlemen, on behalf of Carraro India Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.