Summary
ASK Automotive Limited - Q3 FY26 Earnings Call Summary Wednesday, January 29, 2026, 4:00 PM IST
Event Participants
Executives 5 Aman Rathee (Joint Managing Director), Kuldip Singh Rathee (Chairman and Managing Director), Manoj Sharma (CGM, Investor Relations), Naresh Kumar (CFO), Prashant Rathee (Joint Managing Director)
Analysts 8 Deep Shah, Harsh Sheth, Naveen Kumar Dubey, Nitin Agrawal, Raghunandan N L, Rishi Kapadia, Sagar Shetty, Vijay Pandey
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Consolidated) | ₹XXX Crore | +18.5% YoY; Growth was 28% excluding the low-value wheel assembly business. |
| EBITDA | ₹XXX Crore | +26.8% YoY; Highest ever absolute EBITDA recorded by the company. |
| EBITDA Margin | 13.4% | +88 bps YoY; Impacted by ~30-40 bps due to the “denominator effect” of rising aluminum prices. |
| Profit After Tax (PAT) | ₹XXX Crore | +21.3% YoY; Driven by economies of scale and better capacity utilization. |
| Earnings Per Share (EPS) | ₹4.05 | +21.3% YoY; Compared to ₹3.34 in Q3 FY25. |
| Net Debt/Equity | <0.5x | Management maintains a conservative leverage policy despite high capex. |
| ROCE | ~27-28% | Maintained high returns despite new plants still ramping up to full capacity. |
Geographic & Segment Commentary
- Advanced Braking System: Revenue grew 22% YoY in Q3 FY26. Performance was bolstered by GST reduction (28% to 18%), allowing the company to capture market share from the grey market.
- Aluminum Lightweighting Precision Solution (ALPS): Revenue grew 36% YoY in Q3 FY26. Management identified this as a “sunrise industry” with flexible growth opportunities across ICE and EV segments.
- Safety Control Cable: Revenue recorded 22% YoY growth in Q3 FY26. The segment is expanding into high-tech niches like sunroof cables to support import substitution.
- Exports: Revenue stood at ₹100 crore vs ₹108 crore YoY. Softness is attributed to geopolitical tariffs in the US and Mexico, though Ford order supplies have commenced.
Company-Specific & Strategic Commentary
- Wheel Assembly De-risking: Strategic reduction of this low-margin business continued, with a 51.5% reduction in Q3. Management expects the remaining 48% to be phased out by March 2026.
- Capacity Expansion: The Bangalore facility reached 75-80% utilization. The Karoli (Rajasthan) plant is at 65%, with new product lines expected to start in H2 FY27.
- Renewable Energy Focus: A 9.9 MW solar plant in Sirsa is operational. A new 11.55 MW captive solar plant in Rajasthan is slated for Q1 FY27 to improve operational economies.
- New Joint Ventures: The Kyushu (Japan) JV for alloy wheels expects first product testing by Feb 2026. The Sunroof Cable project (Atmanirbhar Bharat initiative) is on track for H2 FY27 production.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | Mid-teens | Management expects to continue outperforming the general 2W industry growth. |
| FY26 Capex | ₹500 Crore | Includes an unbudgeted ₹40 crore for solar power plants. |
| FY27 Capex | ~₹400 Crore | Expected to be lower than FY26 as major facility builds conclude. |
| EBITDA Margin | ~13.7% (Normalized) | Target remains steady, though reported % may fluctuate with aluminum price pass-throughs. |
| Alloy Wheel/Sunroof | H2 FY27 | Commercial production and mass ramp-up for new JVs expected in second half. |
Risks & Constraints
| Risk | Context |
|---|---|
| Commodity Pricing | Aluminum price increases act as a pass-through, inflating revenue but mathematically compressing EBITDA margins by ~30 bps. |
| Geopolitical/Tariffs | Exports face uncertainty due to 50% duties imposed by Mexico and shifting US tariff policies, resulting in flat YoY export growth. |
| Regulatory Uncertainty | The draft notification for mandatory ABS in sub-125cc bikes remains on hold following OEM representations to the government. |
Q&A Highlights
Margin Mechanics
- Question: Why haven’t margins expanded more given the revenue growth? (Naveen Kumar Dubey)
- Answer: Aluminum prices skyrocketed; since these are pass-throughs, the absolute EBITDA is protected, but the margin percentage dropped by 30-40 bps due to the higher denominator (Kuldip Singh Rathee).
Export Headwinds
- Question: What is the status of the Ford export order and global tariff impacts? (Raghunandan N L)
- Answer: Supplies to Ford have started, but 50% duties in Mexico and US tariff talk have created uncertainty. FY26 exports will likely be flat YoY (Kuldip Singh Rathee).
Product Pipeline & JVs
- Question: When will the Sunroof and Alloy Wheel JVs contribute to revenue? (Deep Shah/Vijay Pandey)
- Answer: Testing is underway for Taiwan (Lioho) and Japanese (Kyushu) JVs. Commercial mass production for Sunroof cables and Alloy wheels is slated for H2 FY27 (Kuldip Singh Rathee).
Aftermarket Dynamics
- Question: What is driving the outperformance in Braking and ALPS? (Sahil Sanghvi)
- Answer: The GST reduction from 28% to 18% has been a “real big boost,” allowing ASK to gain significant share from grey market duplicators who previously thrived on the tax gap (Kuldip Singh Rathee).
Key Takeaway
ASK Automotive delivered its highest-ever quarterly revenue and PAT in Q3 FY26, characterized by a 28% growth in core business (excluding wheel assembly). Strategic highlights included the successful ramp-up of the Bangalore facility to 80% utilization and the continued phasing out of low-value wheel assembly contracts, which improved the overall margin profile to 13.4%. While aluminum price inflation created a mathematical drag on margin percentages, absolute EBITDA grew a robust 26.8% YoY. The company is aggressively pivoting toward high-tech components via JVs in alloy wheels and sunroof cables, aiming for H2 FY27 commercialization. Despite geopolitical headwinds affecting exports, management remains bullish on domestic 2W demand fueled by GST rationalization and rural recovery, maintaining a mid-teens growth guidance for the foreseeable future.
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