1. At a Glance
Ladies and gentlemen, welcome to India’s very own torque whisperer —Divgi Torqtransfer Systems Ltd (Divgi TTS). The Pune-based drivetrain specialist that’s been making cars shift smoother since 1964 just dropped itsQ2FY26numbers, and let’s just say — the gears are grinding in all the right places.At a market cap of₹1,928 croreand acurrent price of ₹630, this small-cap is trying to punch in the heavyweight auto-components league. Thestock P/E is 63.7, clearly priced like an EV startup rather than a gearbox maker from Maharashtra.ROE stands at 4.14%andROCE at 5.69%, which, let’s be honest, would make Warren Buffett politely leave the room.
Yet, here’s the twist:Sales shot up 53.8% YoYthis quarter to ₹83 crore, whilePAT revved up 37.1%to ₹10.8 crore. The operating profit margin (OPM) held firm at 20%, like an experienced clutch refusing to slip. With exports to eight countries and new orders worth ₹800+ crore, Divgi is shifting gears from traditional manual transmissions to high-growth EV powertrains.
As theBhagavad Gitateaches,“Karmanye vadhikaraste ma phaleshu kadachana”— focus on your duty, not the results. Divgi seems to be doing exactly that: quietly engineering India’s drivetrain future while the market decides how to value it.
2. Introduction
Once upon a time, in a land filled with noisy diesel SUVs and manual gears, a small Indian company decided to build world-class transmission systems. That company wasDivgi Torqtransfer Systems Ltd— a 60-year-old Pune-born gear wizard that today supplies toTata, Mahindra, Toyota Kirloskar, BorgWarner, and Ashok Leyland.
Divgi TTS didn’t just survive India’s automotive transition — it adapted, pivoted, and quietly powered some of the slickest drives on Indian roads. From four-wheel-drive transfer cases to dual-clutch automatic gearboxes and evenEV transmissions, the company has shifted from being a parts supplier to a drivetrain solution provider.
In FY24, it pulled₹265 crorein total sales, with95%of it coming from products, while the rest came from tools and other operating income. Though domestic business dominates (99% of revenue), its export ambitions are revving up.
Still, investors can’t help but ask — is this gearbox maker worth63x earnings? The answer lies between its robust order book, clean balance sheet (debt: ₹0.83 crore), and the government of Maharashtra giving it‘Mega Project’ status. That’s right, our desi torque magician just got VIP access to incentives and recognition.
But here’s the comic paradox — Divgi’soperating excellenceruns like a German gearbox, yet itsreturn ratioscrawl like an Indian autorickshaw uphill.
3. Business Model – WTF Do They Even Do?
In plain English,Divgi TTS makes your car move efficiently. But if you like jargon — they design, manufacture, and supplydrivetrain systems, includingtransfer cases, synchronizers, dual-clutch transmission parts, and EV gear assemblies.
Let’s decode their universe of torque and technology:
- 4WD (Four-Wheel Drive) Transfer Cases:These tiny mechanical beasts make your Mahindra Thar or Toyota Fortuner climb mountains without breaking a sweat.
- Manual Transmission & Synchronizers:Old-school but still relevant — think of it as the unsung hero between your clutch pedal and the gearbox.
- Automatic Transmission Components:Because India’s middle class got tired of “gear 1, gear 2, gear 3” traffic trauma.
- EV Powertrains:The new kid on the block — electric drivetrain assemblies and eGear drives for battery-powered vehicles.
They operate acrossfour plantsinMaharashtra and Karnataka, manufacturing everything from transfer cases (60,000+ capacity) to EV transmissions (1 lakh units/year).
So in
short, they’re thesilent enablerof motion — the company behind the company that makes your car move. The irony? While your car goes 0–100 in 10 seconds, their sales growth over five years managed barely 6.6%.
But hey, they’re debt-free, dividend-paying, and blessed by Toyota Tsusho with a ₹62 crore order. Let’s just say — the drivetrain might be slow, but it’s definitely not dead.
4. Financials Overview
| Metric (₹ Cr) | Q2FY26 (Sep’25) | Q2FY25 (Sep’24) | Q1FY26 (Jun’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 83 | 54 | 72 | 53.8% ↑ | 15.3% ↑ |
| EBITDA | 17 | 11 | 14 | 54.5% ↑ | 21.4% ↑ |
| PAT | 10.8 | 7.9 | 9.0 | 37.1% ↑ | 20% ↑ |
| EPS (₹) | 3.52 | 2.56 | 2.92 | 37.5% ↑ | 20.5% ↑ |
Commentary:Divgi TTS has finally found its groove after several lukewarm quarters. Revenue is accelerating faster than your neighbor’s new Nexon EV, and PAT has shifted up a gear. Margins are steady despite raw material costs, and the company’szero-interest costprofile adds turbo to profits.
Still, EPS at ₹3.52 annualizes to ₹14.08 — meaning your P/E at ₹630 is still 44.7x. That’s optimism with a side of caffeine.
5. Valuation Discussion – Fair Value Range Only
Let’s pop open the financial gearbox:
(a) P/E Method:Annualized EPS = ₹3.52 × 4 = ₹14.08Industry average P/E = 32Fair Value = ₹14.08 × (32–45) = ₹450–₹635
(b) EV/EBITDA Method:EV = ₹1,643 Cr; EBITDA (TTM) = ₹69 CrEV/EBITDA = 23.8× (current)Peer median = 18×Fair EV Range = ₹69 × (18–22) = ₹1,242–₹1,518 Cr→ Fair Equity Value ≈ ₹450–₹550/share
(c) DCF Method (simplified):Assuming cash flow growth 10%, discount rate 12%, terminal multiple 15×, fair value lands between ₹480–₹620.
Fair Value Range:₹450 – ₹635
🟢Disclaimer:This fair value range is foreducational purposes onlyand isnot investment advice.
6. What’s Cooking – News, Triggers, Drama
Divgi TTS has been busier than an F1 pit crew lately. Here’s the highlight reel:
- November 2025:Received ₹62 crore order fromToyota Tsusho India, to be executed over six years from H1FY28. Slow-cooked revenue, Japanese-style.
- July 2024:Maharashtra Government conferred‘Mega Project’ status, unlocking tax incentives and policy support. Torque meets subsidy.
- August 2024:Won ₹800 crore multi-year order for
