Carraro India Limited, an independent Tier-I solution provider for axles, transmission systems, gears and related components, has reported its unaudited financial results for the quarter ended 30 June 2026.

The company reported total income of Rs 5.587 billion in Q1 FY27, up 12 per cent from Rs 4.999 billion in Q1 FY26. EBITDA, including other income, increased 6 per cent year-on-year to Rs 579 million from Rs 548 million, while EBITDA margin stood at 10.4 per cent compared with 11 per cent in the corresponding quarter last year.

Profit after tax (PAT) rose 8 per cent year-on-year to Rs 314 million from Rs 291 million, while PAT margin stood at 5.6 per cent compared with 5.8 per cent in Q1 FY26.

Revenue from operations increased 10 per cent year-on-year to Rs 5.447 billion from Rs 4.929 billion. Agricultural equipment revenue grew 15 per cent to Rs 2.559 billion from Rs 2.219 billion, while construction equipment revenue increased 4 per cent to Rs 2.264 billion from Rs 2.178 billion. Revenue from other segments rose 17 per cent to Rs 624 million from Rs 532 million.

Domestic revenue increased 26 per cent year-on-year to Rs 3.795 billion from Rs 3.016 billion, while export revenue declined 14 per cent to Rs 1.652 billion from Rs 1.913 billion.

In the Tele-boom Handler (TBH) construction equipment business, the ramp-up of the new range of TBH axles for a major international OEM continued during the quarter, with healthy traction and strong visibility for sustained growth. Export programmes progressed as planned.

New projects with a domestic customer, covering global and Indian requirements for the TBH family of axles, are also progressing well and remain on track as Carraro India expands its TBH business and strengthens its presence in the domestic market.

In the Backhoe Loader (BHL) transmission and axle business, overall BHL sales by Indian OEMs, including domestic sales and exports, grew approximately 14 per cent year-on-year during the quarter. Over the same period, Carraro India’s sales of drivelines to Indian OEMs increased approximately 18 per cent, outperforming the broader market.

The engineering services business received several enquiries for higher-HP and technology configurations. The Rs 175 million e-transmission engineering project with Montra Electric is progressing well, with a prototype order received for field validation.

Engineering services assignments worth approximately Rs 33 million, which were under discussion at quarter-end, were subsequently received, finalised and concluded in July 2026. Discussions with another customer are progressing positively, while efforts to secure additional engineering services business remain ongoing, supporting expected year-on-year revenue growth in the segment.

In the domestic agricultural 4WD axle business, the GST reduction has narrowed the price gap by bringing post-GST 4WD tractor prices close to pre-GST 2WD levels, accelerating the shift towards 4WD models. Consequently, domestic 4WD axle demand continues to grow as anticipated, with Carraro India ramping up capacity to support future demand.

The gears business remained subdued during Q1 FY27. However, efforts are underway to strengthen the business, which is expected to support gradual improvement over the coming quarters.

Carraro India has also secured a business nomination from a major OEM for bull gears, valued at approximately Rs 150 million per annum, effective FY28. The company is also working with two new customers and projects.

In higher-HP agricultural transmissions, the export market is gradually recovering, which could positively impact transmission offtake for high-HP tractors. Higher-HP tractor transmission projects with a customer in Turkey and customers in India are progressing well. Production for the Turkish customer commenced in Q1 FY27, while start of production for the Indian customer is expected by FY28.

Export market conditions remained challenging during the quarter, as ongoing geopolitical uncertainty and uneven demand across key overseas markets weighed on performance. However, resilient domestic demand continued to support the overall volume trajectory.

On the capital expenditure front, construction of a new paint-shop building commenced during Q1 FY27. A side-drive sub-assembly line and a backlash machine were also commissioned to enhance Portal axle capacity and increase differential-support capacity on the 4WD line.

During FY26, Carraro India deployed Rs 417 million towards new telescopic-handler axle production, high-performance agricultural transmissions and capacity expansion.

Commenting on the results, Dr Balaji Gopalan, Managing Director, Carraro India Limited, said: “Carraro India reported a resilient start to the financial year. Q1 FY27 revenue from operations increased by 10 per cent year-on-year to Rs 5.447 billion, supported by sustained momentum in the domestic business. Domestic revenue grew by ~26 per cent year-on-year, driven by robust demand for 4WD axles in the agricultural vehicle segment, despite uncertainty surrounding the monsoon outlook. Export revenue declined by ~14 per cent year-on-year due to geopolitical disruptions and uneven demand across global markets.

“Profitability improved in absolute terms, with EBITDA rising by ~6 per cent and PAT by ~8 per cent year-on-year. EBITDA margins were affected by higher energy and raw-material costs arising from geopolitical disruption, along with labour availability constraints. However, disciplined cost management and execution efficiencies helped contain the impact and sustain earnings growth.

“The domestic agriculture business continues to benefit from the GST reforms, accelerating the shift towards 4WD tractors, with demand for our axles growing in line with expectations. We are accordingly expanding capacity to support anticipated demand.

“In the construction-equipment segment, the export programme for TBH axles continues to progress as planned. We are also expanding our domestic TBH presence through new projects with Indian OEMs and the Indian operations of global OEMs. Carraro’s BHL sales to Indian OEMs continued to outperform the broader market.

“Our engineering-services business gained further momentum during the quarter. The Montra Electric project is progressing well, while assignments worth ~Rs 33 million that were under discussion at quarter-end have since been received. These developments reflect growing customer confidence in our engineering capabilities and technology solutions. Discussions with another prospective customer are also progressing, supporting further growth in this business.

“Our higher-HP transmission programmes reached an important milestone, with series production for a Turkish customer beginning in Q1 FY27. The programme for an Indian customer is advancing as scheduled, with start of production targeted by FY28.

“The gears business remained subdued during the quarter. However, focused initiatives are underway to strengthen the portfolio and support a gradual recovery over the coming quarters.

“We also made progress on our manufacturing and capacity-enhancement roadmap. Construction of the new paint-shop building commenced during the quarter, while a side-drive sub-assembly line and a backlash machine were commissioned to enhance Portal axle capacity and expand differential-support components used in 4WD axle production.

“Global market conditions remain uncertain due to geopolitical developments and mixed demand trends. Nevertheless, strong domestic momentum, recovering supply chains, the ramp-up of new programmes and ongoing capacity additions position us well for the year ahead. We remain focused on delivering positive growth in FY27. Better cost absorption, improved operating efficiencies, higher utilisation levels and continued cost discipline are expected to support margin improvement as we work towards our medium-term revenue and profitability objectives.”