01 — At a Glance
The Tier-1 Supplier India Didn’t Know It Needed
- 52-Week High / Low₹602 / ₹438
- Q3 FY26 Revenue₹1,285 Cr
- Q3 FY26 PAT₹119 Cr
- Q3 EPS (Dec 2025)₹2.94
- Annualised EPS (Q3×4)₹11.76
- Book Value₹22.7
- Price to Book23.9x
- Dividend Yield0.0%
- Debt / Equity0.02x
- Order Book (TTM)₹98,400 Cr
Auditor’s Opening Note: Tenneco just closed Q3 FY26 with ₹12,853 million revenue (+14.2% YoY), cleaned up ₹3,350 crore in fresh program wins (DaVinci DCx + BS-VI aftertreatment), and announced a ₹710-crore greenfield plant in Kharkhoda. The stock IPO’d at 61.8x valuation three months ago, trades at a P/E of 38.8x today, and management claims “80%+ ROCE” on disclosures. Translation: they’re betting hard on the India story. The question is whether you should too.
02 — Introduction
The Global Tier-1 That Just Went IPO in India
Meet Tenneco Inc. — one of the world’s largest suppliers of clean air and suspension systems for vehicles. If your car doesn’t explode from emissions, and your ride isn’t bumpy on potholes, thank a Tier-1 supplier like Tenneco. They sell to every major OEM globally: Volkswagen, BMW, Toyota, you name it. And in November 2025, they IPO’d a subsidiary in India at ₹3,600 crore Offer for Sale — listing at 61.8x valuation, which tells you exactly how aggressive institutional investors are about India’s auto supply story.
Tenneco Clean Air India operates two business verticals: (1) Clean Air & Powertrain Solutions — exhaust treatment systems, catalytic converters, engine bearings, and ignition products. (2) Advanced Ride Technologies — shock absorbers, struts, and suspension dampers. Together, they serve all top 7 passenger vehicle OEMs and all top 5 commercial vehicle OEMs in India. They’re essentially the plumbing behind India’s automotive miracle.
But here’s the twist: Q3 results (Feb 2026 earnings call) revealed they just locked in two massive customer wins worth ₹3,350 crore annual revenue. The first? A “purely mechanical” next-generation suspension damper called DaVinci DCx that’s “disruptive” and “not something that can be copied overnight.” The second? A modular BS-VI aftertreatment system for a leading global CV OEM. Translation: the order book is real. The tech is proprietary. And if you think IPO valuations are frothy, wait until management’s growth guidance hits.
Concall Highlight (Feb 2026): “The demand is fast and furious,” said the CEO on DaVinci DCx adoption. CEO also claimed “100% revenue coverage through FY 2028” and “clear double-digit CAGR visibility over the next three years.” If that pans out, the 38.8x P/E might actually be justified. If it doesn’t, this stock gets ugly fast.
03 — Business Model: WTF Do They Even Do?
Turning Car Emissions Into Engineering Poetry. Literally.
Tenneco operates as a Tier-1 automotive supplier — the companies that sit between raw material suppliers and OEM assembly plants. They don’t build cars. They build the parts that make cars legal, safe, and comfortable. In their case: suspension systems that handle Indian potholes better than government contractors ever will, and exhaust treatment systems that keep you from choking on Delhi smog.
Clean Air & Powertrain (52.5% of VAR) manufactures catalytic converters (DOC, DPF, SDPF, SCR), mufflers, exhaust pipes, and full after-treatment systems for passenger vehicles, commercial vehicles, and off-highway equipment. They also make engine bearings (with proprietary IROX technology), sealing systems, and ignition products under the Champion brand. They own 57% market share in clean air solutions to Indian commercial truck OEMs. That’s a fortress.
Advanced Ride Technologies (47.5% of VAR) manufactures shock absorbers, struts, and suspension modules. Market share: 52% in shock absorbers and struts for Indian passenger vehicles. The new DaVinci DCx is a mechanical suspension damper that claims to offer “semi-active like” performance without electronics — meaning it works on hydraulic shim stacks instead of sensors and software. Cost delta vs conventional: “the price of a dinner for two at a five-star hotel,” per management.
Manufacturing footprint: 12 facilities across 7 states + 1 UT. Distribution across India. Export presence in 18–22 countries. Revenue split: PV 63.5%, CV 21.5%, Industrial/Others 7%, Aftermarket 5.5%. The moat? Proximity to OEM plants, speed of new program development, and engineering depth that global OEMs trust.
Clean Air to CV57%Market Share
Clean Air Off-Hwy68%Market Share
Shocks & Struts PV52%Market Share
Top 10 Customers80%of Revenue
Concentration Risk: Top 10 customers account for 80% of revenue. This is typical for Tier-1 suppliers but worth noting. If a major OEM shifts supply, it stings. Management’s export thrust (now >20% of order book vs 5% of sales historically) is a smart hedging move.
💬 Do you think mechanical suspension dampers can really compete with semi-active systems? Or is DaVinci DCx just a budget play for price-sensitive OEMs?
04 — Financials Overview
Q3 FY26: The Numbers Behind the Hype
Result type: Quarterly Results | Q3 FY26 EPS: ₹2.94 | Annualised EPS (Q3×4): ₹11.76 | Full-year FY25 EPS: ₹13.68
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 1,285 | 1,125 | 1,281 | +14.2% | +0.3% |
| Operating Profit (EBITDA) | 223 | 178 | 217 | +25.3% | +2.8% |
| EBITDA Margin % | 17.4% | 15.8% | 16.9% | +160 bps | +50 bps |
| PAT | 119 | 125 | 151 | -4.8% | -21.2% |
| EPS (₹) | 2.94 | 2.85 | 3.73 | +3.2% | -21.2% |
Adjusted PAT Reality Check: Management reported Q3 PAT of ₹119 Cr (2.94 EPS) but mentioned a one-time labour code charge of ₹203 million, making adjusted PAT ₹1,391 million (11.7% margin of VAR). This is crucial: the reported EPS is depressed by a one-off. Adjusted would be higher. Also note: VAR (Value Added Revenue) grew 14.7% YoY — higher than reported revenue growth of 14.2%, indicating they’re moving up-market on higher-value products.
05 — Valuation: Fair Value Range
Is ₹542 Fair, or Are We Riding IPO Euphoria?
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