1. At a Glance
Carraro India Ltd — the Italian-engineered, Pune-manufactured gearbox specialist that’s been quietly powering half of India’s tractors — is having its moment. With amarket cap of ₹2,945 crore,stock price ₹518, and a deliciousROE of 20%, the company’s balance sheet hums smoother than one of its transmissions.
InQ2 FY26 (Sep 2025), revenue raced up to₹582 crore, a33.2% YoYjump, whilePAT hit ₹30.6 crore, rising41.8% YoY. You know what that means — for once, the farmer and the backhoe loader operator both have something to celebrate together.
TheP/E ratiois a respectable30.6,EV/EBITDAsits at15.6, and debt-to-equity is a well-oiled0.34. Promoters — Carraro International S.E. — hold68.8%, and unlike some desi promoters, haven’t pledged a single rupee’s worth of shares. Dividend yield is0.88%, which is basically enough to buy a vada pav and chai combo, but hey — that’s better than zero.
The real kicker? Carraro India has been clearing customs cases faster than your local courier clears return parcels. Between tax refunds, credit rating upgrades, and solar panels on OPEX models, this is one Italian family that doesn’t just make pizzas — they make profits.
2. Introduction – The Italian Gearbox That Found Its Mojo in Maharashtra
Picture this: it’s 1997. Backstreet Boys are playing on the radio, MS-Dhoni is still dreaming of Ranchi fame, and Carraro SpA — an Italian drivetrain powerhouse — decides to open shop in India. They looked around and thought, “Where else but Pune, the Detroit of India?”
Fast-forward to 2025: Carraro India Ltd (CIL) has become the silent force behind tractors and construction vehicles across the country. It doesn’t make tractors — it makes them move. Fromaxles, gear assemblies, hydraulic lifts, and transmission systems, this company is the secret sauce behind Mahindra’s ruggedness and JCB’s swagger.
But it’s not all torque and traction. Carraro India has been juggling solar panels, customs notices, and IPO glamour in the same financial year. Think of it as the Bollywood actor who does commercial masala films (mass production) but occasionally sneaks in an indie award-winner (custom-built IP rights from its parent).
In FY24, the company clocked₹1,956 crore in revenueand₹96 crore in PAT— up from ₹47 crore in FY23. That’s a 2x profit jump in two years, no sidekick required. Even theOperating Marginhas gone from 5% a few years ago to nearly9%today. Clearly, these Italians have learned the fine art of “Indian jugaad.”
So what keeps this well-oiled engine running? Let’s open the hood and find out.
3. Business Model – WTF Do They Even Do?
Carraro India Ltd isn’t your typical auto company that slaps a logo and sells shiny things. It’s themechanical heart surgeonof the vehicle world.
Here’s the breakdown — and it’s spicier than it looks:
- Agricultural Equipment– Think of every tractor ploughing your onions in Nashik or pulling sugarcane in Kolhapur — chances are, the transmission or axle inside came from Carraro’s Pune plant.
- Construction Equipment– Those backhoe loaders and compact wheel loaders tossing mud like they’re auditioning for a Salman Khan movie? Yup, Carraro drives them too.
- Gears and Components– The company also supplies precision gears and spare parts that end up in both farm and industrial vehicles.
Carraro India’sdomestic market contributes 65%, andexports contribute 35%— the latter mostly to Italy, Brazil, and China. Essentially, Carraro’s products travel more than most Indian honeymooners.
And if you’re wondering what’s next — they recentlyacquired Carraro Technologies India Pvt Ltd(CTIPL) for ₹239.8 million, making it a wholly owned subsidiary. Translation: They’ve brought all the tech brains under one roof. It’s like Iron Man buying Jarvis.
Plus, they’re putting upsolar panels at their Pune factory— not out of love for the environment, but on anOPEX model(operating expenditure), meaning cost savings start flowing in FY25.
Smart move. Because when your machines make torque, why not let your roof make watts?
4. Financials Overview
| Metric (₹ Cr) | Latest Qtr (Sep 2025) | YoY Qtr (Sep 2024) | Prev Qtr (Jun 2025) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 582 | 437 | 489 | +33.2% | +19.0% |
| EBITDA | 51 | 42 | 47 | +21.4% | +8.5% |
| PAT | 30.6 | 22 | 29 | +41.8% | +5.5% |
| EPS (₹) | 5.38 | 3.80 | 5.01 | +41.8% | +7.4% |
Annualised EPS = ₹5.38 × 4 =₹21.52.At CMP ₹518 →P/E =
24.1× (recalculated), lower than the official 30.6× due to fresh earnings momentum.
Commentary:Revenue is galloping faster than a sugarcane tractor at harvest time. The EBITDA and PAT growth rates are equally muscular, signaling operational efficiency, cost control, and demand resilience. But margins could use a bit of Italian espresso — still hovering around 9%, not yet in “Ferrari zone.”
5. Valuation Discussion – Fair Value Range Only
Let’s crunch some educational math.
Method 1: P/E ValuationAnnualised EPS = ₹21.52Industry P/E = 31.4So:
- Lower bound (20× EPS) = ₹430
- Upper bound (35× EPS) = ₹753
Method 2: EV/EBITDA ValuationEV = ₹3,032 CrEBITDA (FY25 TTM) = ₹194 Cr→ EV/EBITDA = 15.6×If fair range = 13× to 18× →
- Lower = ₹2,460 Cr
- Upper = ₹3,410 Cr→ Per share value ≈ ₹420 – ₹580
Method 3: DCF (simplified educational)Assume FCF = ₹218 Cr (CMP/FCF ratio = 14),WACC = 11%, growth 6%.Fair range = ₹500 – ₹620
✅Fair Value Range (educational)= ₹430 – ₹620
Disclaimer:This fair value range is foreducational purposes onlyand isnotinvestment advice. Please consult your inner conscience (or a SEBI-registered advisor) before buying any gearbox stocks.
6. What’s Cooking – News, Triggers, Drama
Carraro India’s corporate announcements recently read like a Netflix courtroom series:
- Customs Drama (Sep 2025):The company receivedshow cause noticesfor alleged IGST short levy totaling ₹15.2 crore. Management’s response: “Calm down, we’ll file a reply.” Basically, bureaucratic banter at its best.
- Tax Relief Wins (Apr–Aug 2025):Carraro wonmultiple income tax appeals, earning reliefs worth ₹27.87 crore and refunds of ₹5.3 crore. The High Court even withdrew old cases — talk about a clean sweep.
- Credit Rating Upgrade (Apr 2025):India Ratings boosted Carraro India toIND A+, because consistent profits and strong governance finally paid off.
- IPO Listing (Dec 2024):The IPO raised₹12,500 million, debuting on NSE & BSE. Investors loved the “Italian DNA, Indian execution” narrative.
Add to that, solar power initiatives and ongoing capacity expansion of ₹1,050 million — Carraro’s turning its Pune plant into a high-torque Disneyland.
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