1. At a Glance – The Drivetrain Rockstar with a Handbrake On
₹2,342 crore market cap.
₹759 stock price.
63.6 P/E.
5.69% ROCE.
Debt? Basically zero (₹0.83 crore).
Q3 revenue up 72.6%.
Q3 profit up 125%.
Ladies and gentlemen, this is Divgi Torqtransfer Systems Ltd — India’s largest EV transmission manufacturer — currently delivering its highest-ever quarterly revenue while still earning a return on capital that would make a fixed deposit smirk.
Q3 FY26 sales came in at ₹90.6 crore versus ₹52.5 crore last year. PAT doubled to ₹11.8 crore. Margins improved. Order book looks strong. Exports rising. EV dreams alive.
And yet… ROCE sits at 5.69%.
So what’s going on? Is this the early innings of a drivetrain revolution? Or is the market already pricing in a Formula 1 engine while the company is still tuning its gearbox?
Let’s open the bonnet.
2. Introduction – The 60-Year Veteran Trying to Go Electric
Divgi was incorporated in 1964. When India was still figuring out scooters, Divgi was already machining drivetrain components.
Fast forward 60+ years.
They now make:
- Transfer cases
- Manual transmissions
- Automatic transmission components
- EV transmissions
- Synchronizers
They operate four manufacturing plants. Shirwal houses India’s largest dedicated EV transmission facility.
The company went public in March 2023, raising ₹412.12 crore via IPO.
Since then?
Revenue dipped from FY23 highs.
Margins compressed.
Returns fell.
And then suddenly — Q3 FY26 happened.
Now revenue is surging again.
The big question is:
Is this a structural growth phase? Or a temporary volume recovery?
Because markets are already valuing this like a premium auto component story.
Are we looking at a future global drivetrain supplier — or just a cyclical volume bounce?
3. Business Model – WTF Do They Even Do?
Okay. Imagine this:
When your SUV shifts from 2WD to 4WD in Ladakh — that magic box? That’s a transfer case.
When your EV transmits power to wheels efficiently? That’s transmission engineering.
Divgi lives in that invisible, highly technical, very unglamorous part of automobiles called the drivetrain.
They earn money from:
1. Transfer Case (50% of H1 FY26 revenue)
Core bread and butter.
2. Components (29%)
Precision engineered parts. Strong export growth.
3. E-Gear Drive (8%)
EV transmission systems.
4. Others (13%)
Geographically:
- Domestic: 84%
- Exports: 16%
