Remember when corporate calls were about sales and profits, not a forensic investigation into transfer pricing? Welcome to Automotive Axles’ Q1 FY26, where the numbers were steady, the mood was tense, and “arm’s length” was said more times than “growth.” Revenue came in flat at ₹498 crore, but margins ticked up slightly despite a soft market. Management kept assuring “marginal improvement” while analysts kept trying to unearth a treasure chest hidden in a private entity’s books.
Why it matters? Because the company just changed a 44-year-old sales model — and investors want to know if that means more profit in their pockets or just more fees going elsewhere.
Stick around—things get spicier two scrolls down.
AT A GLANCE
• Revenue ₹498 crore – same as last year, but without the déjà vu discount
• EBITDA margin 11.7% – up 0.5%, CFO calls it “marginal,” investors call it “suspiciously small”
• PAT margin 7.3% – up from 6.9%, thank product mix and cost control
• Cash flows improved – working capital behaving for once
• Service fee to Meritor – percentage of domestic sales, cue detective music
MANAGEMENT’S KEY COMMENTARY
Nagaraja Gargeshwari (President & WTD): “Despite the soft market, we delivered strong performance and improved EBITDA.”
Translation: The market’s bad, but we’re flexing half a percent.
Sankaran Ranganathan (CFO): “Revenue flat, margins slightly better, strong cash flow, working capital improved.”
Translation: We made the same money, kept a bit more of it, and didn’t blow cash.
On new sales model: “Consolidation will improve top line and margins, but not by 10% — that’s a wrong assumption.”
Translation: Lower your Excel expectations, Sherlock.
On service fee: “Scientifically assessed, arm’s length, percentage of domestic OE sales.”
Translation:
We pay them, they help us, SEBI won’t arrest us.
Kishan Kumar (Meritor GM): “New bus axle platforms in proto trials, production soon, good feedback.”
Translation: Our bus axles are in beta mode.
On exports: “Fees don’t apply to exports to group entities, so margins there are better.”
Translation: Export sales are the diet cola of our P&L — less sugar, more profit.
On demand: “Q2 will be weaker due to monsoon and OEM inventory; recovery expected in Q3/Q4.”
Translation: Blame weather and warehouses now, hope infrastructure saves us later.
NUMBERS DECODED
| Metric | The Hero | The Sidekick | The Drama Queen |
|---|---|---|---|
| Revenue | ₹498 cr, flat YoY | Domestic softness offset by product mix | Everyone expected a 10% bump, got reality instead |
| EBITDA | ₹58 cr (11.7%) | +0.5 pp YoY | CFO keeps calling it “marginal” like it’s a compliment |
| PAT | ₹36 cr (7.3%) | +0.4 pp YoY | Investors wanted fireworks, got a sparkler |
Analysis: Top line held steady, margins nudged up thanks to mix (heavy-duty axles, new bus platforms) and cost control. Export revenue recognition lagged due to Incoterms; will normalise from Q2.
ANALYST QUESTIONS
Q: Why no big jump in revenue after model change?
A: Because assumptions were wrong, exports not recognised yet, and product mix is tricky.
Q: How
