Summary
Talbros Automotive Components Limited - Q3 FY26 Earnings Call Summary Thursday, February 12, 2026 14:00 PM
Event Participants
Executives 2 Anuj Talwar (Managing Director), Navin Juneja (Director and Group CFO)
Analysts 4 Neil (Equitree Capital), Preet (InCred AMC), Ravi Shah (Drs Capital), Shikha Mehta (Time & Tide Advisors)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹220 crores | +8% YoY; growth driven by Gaskets (+12%) and JVs (+25%), offset by flat Forgings performance. |
| EBITDA | ₹39.8 crores | +10.5% YoY; reflects operational efficiencies and a sharp product mix strategy. |
| EBITDA Margin | 18% | +60 bps YoY; among the highest in the industry, driven by cost discipline and JV performance. |
| Net Profit (PAT) | ₹27 crores | +12.5% YoY; improved profitability despite sluggish export segments in Forgings. |
| Gasket Division Revenue | ₹153 crores | +12% YoY; bolstered by domestic CV and Agri segments. |
| Forging Division Revenue | ₹68 crores | Flat YoY; impacted by a temporary order halt from JLR and sluggish European demand. |
| Marelli Talbros Revenue | ₹90 crores | +25% YoY; driven by deep OEM penetration in the domestic passenger vehicle segment. |
| Talbros Marugo Revenue | ₹39 crores | +25% YoY; strong demand from Maruti and domestic PV manufacturers. |
| Exports Contribution | 25% | Represents 9M FY26 performance; UK and Europe account for 80% of export volume. |
Geographic & Segment Commentary
- Gaskets & Heat Shields: This division remains the largest contributor, growing 12% in Q3. Heat Shields are experiencing rapid growth due to premiumization in PVs (Maruti, Hyundai), while Gaskets are supported by stable demand in Agri (John Deere) and CV segments (Cummins, Volvo).
- Forgings: Performance was temporarily muted due to zero orders from JLR between October and mid-November and restructuring at Dana. Management expects recovery in Q4 FY26 following a massive ₹500 crore new order win from Europe.
- Joint Ventures (Marelli & Marugo): Both JVs grew at 25% YoY, significantly outperforming the standalone business. Growth is primarily domestic, led by the utility vehicle and SUV boom in India.
- Exports: While currently 25% of revenue, management aims to reach 35% contribution. The India-EU FTA is viewed as a major catalyst for long-term growth and technology collaborations with European OEMs.
Company-Specific & Strategic Commentary
- Order Book Visibility: The company secured new orders worth ₹1,000 crores to be executed over the next 5 years. This includes ₹700 crores in exports and ₹100 crores specifically for EV car components.
- Capacity Expansion: A planned capex of ₹165 crores is slated for FY27 to support new order execution. Major investments include a ₹2,500-tonne press for Forgings and a new facility in Gujarat for Marelli Talbros to support just-in-time delivery for regional OEMs.
- EV Transition: Management is hedging against ICE decline by diversifying into Chassis, Rubber, and Forgings. While ICE remains strong in heavy-duty trucks, the company is already commercializing ₹100 crores in EV-specific orders starting in 2027.
- Recycling Business: Talbros has entered the rubber recycling segment, targeting tire and industrial compound manufacturers as a non-auto diversification play.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | Double-digit growth (FY27) | Driven by commercialization of new ₹1,000 crore order book and recovery in Forging exports. |
| EBITDA Margin | 16.8% - 17.5% (FY27) | Management targets this range accounting for currency fluctuations and metal price pass-throughs. |
| Total Revenue | ₹2,000 crores (FY28) | Group-level target including JVs, supported by ₹200 crore annual execution of new orders. |
| Gasket Revenue | ₹700 crores (FY27) | Target based on new business from Kia and conversion of export orders to commercial production. |
Risks & Constraints
| Risk | Context |
|---|---|
| Export Concentration | 80% of exports are tied to UK/Europe. Any macro slowdown or OEM-specific issues (like the recent JLR order pause) can significantly impact the Forging division. |
| Input Costs & Currency | The company imports a significant amount of raw materials. While they receive some compensation from OEMs, there is a 6-9 month lag in recovery, creating margin volatility. |
| ICE Substitution | While heavy-duty segments are stable, PV electrification poses a long-term risk to the traditional Gasket business. Management is mitigating this by pivoting to Chassis and Heat Shields. |
Q&A Highlights
Gasket Division Growth
- Question: How will you reach ₹700 crores in Gasket revenue by FY27? (Preet, InCred AMC)
- Answer: Growth will be driven by new Kia business starting this month and the commercialization of recent export wins. We expect ₹590-600 crores in FY26, making ₹700 crores achievable by FY27. (Navin Juneja)
Forging Division Recovery
- Question: Why was Forging performance flat this quarter? (Shikha Mehta, Time & Tide Advisors)
- Answer: Direct and indirect exports account for 85-90% of Forging. A temporary issue at JLR halted orders for 2.5 months, and Dana was undergoing restructuring. Both issues are now resolved. (Navin Juneja)
Capex and Debt
- Question: How will the ₹155 crore capex be funded? (Preet, InCred AMC)
- Answer: Most will be funded through internal accruals. We will take a small amount of debt (₹25-30 crores) to cover short-term requirements for Forging and standalone businesses. (Navin Juneja)
Product Mix and Margins
- Question: Can EBITDA margins improve by another 200 bps? (Shikha Mehta, Time & Tide Advisors)
- Answer: While we focus on product mix, we expect margins to stay between 16.8% and 17.5%. We have to pass through metal price savings and account for currency volatility. (Navin Juneja)
Key Takeaway
Talbros Automotive Components Limited delivered a resilient Q3 FY26 with 8% revenue growth and an industry-leading 18% EBITDA margin. While the Forging division faced temporary headwinds due to a suspension of JLR orders and European sluggishness, the domestic JVs (Marelli and Marugo) surged by 25%, capitalizing on the Indian SUV and PV boom. Strategically, the company has secured a massive ₹1,000 crore order book (70% exports) and is committing ₹165 crores in capex to expand capacity, including a new facility in Gujarat. Management is actively hedging against the long-term decline of ICE engines by growing its Chassis and Heat Shield portfolios, which now outpace traditional engine gaskets. With JLR orders back online and robust festive demand in India, Talbros anticipates a significantly stronger Q4 and remains on track for a ₹2,000 crore group revenue target by FY28.
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