Summary
NDR AUTO COMPONENTS LIMITED - Q3 FY 2025-26 Earnings Call Summary Thursday, February 05, 2026, 4:00 PM
Event Participants
Executives 4 Pranav Relan (Whole-Time Director), Vikram Krishan Rathi (CFO and Vice President), Rakesh Rustagi (GM Finance and Accounts), Rajat Bhandari (Executive Director and Company Secretary)
Analysts 8 Anubhav (Prescient Capital), Dhananjai Bagrodia (Alchemy), Jatin Chawla (RTL Investments), Manish Gupta (Equinox Investment Advisors), Revant Mehta (Saideva Enterprises), Rosita Fernandes (Neo Asset Management), Sahil Sharma (Dalmus Capital Management), Vijay (Nuvama)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income | ₹208.99 crores | +19% YoY; growth driven by higher OEM volumes and increased model participation. |
| EBITDA | ₹23.37 crores | 11.18% margin; impacted by seasonal maintenance shutdowns during Q3. |
| PAT | ₹15.19 crores | Includes a one-time impact of ₹0.65 crores due to the New Labor Codes. |
| 9M Total Income | ₹595.56 crores | +14% YoY; steady progression across passenger vehicle segments. |
| 9M EBITDA margin | 11.15% | Consistent profitability despite volume fluctuations in specific models. |
| Order Book | ₹450 crores | Static QoQ; represents business in the pipeline to be converted over 2.5–3 years. |
| Capacity Utilization | 80% - 85% | Management remains open to capacity expansion upon securing new orders. |
| 2-Wheeler Revenue | ₹25-30 crores | Contribution for the 9-month period; focus remains primarily on PVs. |
Geographic & Segment Commentary
- Passenger Vehicles: Remains the primary growth driver through relationships with Maruti Suzuki, Toyota, and Kia. Management noted that while some older models saw lower growth, new launches (including EVs and Kia’s newer models) are expected to drive volume recovery.
- Two-Wheelers: Contributed ₹25-30 crores to the 9M FY26 revenue. The company is working on adding new models but maintains that passenger vehicles are the strategic priority for the medium term.
- Joint Ventures (NDR Hayashi): Focus is currently on setting up backend infrastructure for value-added products like ambient lighting and sunshades. The JV targets an asset turnover of 3x to 4x at peak capacity.
Company-Specific & Strategic Commentary
- Product Expansion: Investing in backend infrastructure for Seat Inserts, Trims, Frames, Ambient Lighting, Sun Shades, Latches, and Seat Belt Reminders to increase “content per vehicle.”
- Cost Competitiveness: Leveraging available land banks (26 acres at Aurangabad, 9 acres at Kharkhoda) to minimize the cost of future capacity expansion.
- JV Strategy: The NDR Hayashi JV will focus on the assembly and mounting of ambient lighting with electronics capabilities, primarily targeting Toyota and searching for new OEM partners.
- Premiumization: Management expects revenue to outpace volume growth as seat premiumization trends continue, although EBITDA margins are expected to remain stable at current levels.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue (Long-term) | ₹3,000 - ₹3,500 crores | 4-5 year vision based on customer expansion and market share gains. |
| Capex (JV) | ₹80.49 crores | Approved for the NDR Hayashi JV; production expected to commence/ramp up by April 2026. |
| Order Conversion | Gradual ramp-up | The ₹450 crore order book will convert into revenue over the next 2 to 3 years. |
| EV Scale-up | Q4 FY26 | Larger scale-up in Maruti EV production expected in the final quarter of the fiscal. |
Risks & Constraints
| Risk | Context |
|---|---|
| Model Transition | Revenue growth was slightly lagged this quarter as a new Maruti model launch resulted in the cannibalization/stagnation of a second model where NDR has a presence. |
| Seasonal Shutdowns | Q3 margins are typically impacted by OEM maintenance shutdowns, leading to higher proportional operating expenses. |
| Labor Costs | Implementation of New Labour Codes resulted in a ₹0.65 crore hit to the bottom line this period. |
Q&A Highlights
Order Book & Growth Lag
- Question: Why has revenue growth lagged Maruti’s production growth (13%) this quarter? (Jatin Chawla)
- Answer: A new model launch by Maruti resulted in another model (where NDR is present) not growing as much; however, upcoming model offtakes from Kia and Maruti EV scale-ups should offset this. (Pranav Relan)
Competitive Advantage
- Question: What is the USP when pitching to new OEMs like M&M against global competitors like Lear? (Anubhav)
- Answer: NDR offers high cost-competitiveness due to its localized scale in India, allowing it to compete effectively on price for high-volume products. (Pranav Relan)
JV & New Products
- Question: Will the Hayashi JV involve electronics for ambient lighting? (Anubhav)
- Answer: It will focus on assembly and mounting but will include specific electronic capabilities required for interior lighting. (Pranav Relan)
Bharat Seats Relationship
- Question: What is the distinction between NDR and Bharat Seats? (Vijay)
- Answer: NDR manufactures seat frames and covers (Tier 2/1), while Bharat Seats performs the foaming and final assembly (Tier 1) for Maruti Suzuki; this follows the standard Asian seating supply chain model. (Pranav Relan)
Key Takeaway
NDR Auto Components reported a steady Q3 FY26 with a 19% YoY revenue increase to ₹208.99 crores, despite seasonal margin pressure from OEM shutdowns and a one-time ₹0.65 crore impact from new labor codes. The company is aggressively pursuing a “content per vehicle” expansion strategy, investing ₹80.49 crores via its NDR Hayashi JV to produce high-margin components like ambient lighting and sunshades, which are expected to ramp up by April 2026. While the current order book remains stable at ₹450 crores, management is focused on a long-term vision of achieving ₹3,000-₹3,500 crores in revenue over the next five years through customer diversification beyond Maruti Suzuki and tapping into the EV transition. Investors should monitor the conversion of the current order book and the successful ramp-up of new product lines in FY27 to validate the long-term growth trajectory.
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