💰 Financial Performance

Revenue Growth by Segment

Group aggregate sales grew 1.5% YoY to INR 7,413 Cr in FY25 from INR 7,300 Cr in FY24. Rane (Madras) Limited (RML) consolidated revenue grew 8.3% YoY to INR 923 Cr in Q2 FY26 from INR 852 Cr in Q2 FY25. Rane Steering Systems (RSSL) revenue grew 19.7% YoY to INR 480 Cr in Q2 FY26 from INR 401 Cr in Q2 FY25.

Geographic Revenue Split

The group operates 30 manufacturing locations in India and 1 in Mexico. Business development establishments are located in North America, Europe, and Japan. While specific % splits are not disclosed, the group markets products across 30+ countries.

Profitability Margins

RML PAT margin improved to 2.3% (INR 21 Cr) in Q2 FY26 from 1.9% (INR 16 Cr) in Q2 FY25. RSSL PAT margin significantly improved to 3.7% (INR 18 Cr) in Q2 FY26 from 1.1% (INR 4 Cr) in Q2 FY25. Standalone PAT/OI was 38.2% in FY22.

EBITDA Margin

RML EBITDA margin stood at 9.0% (INR 83 Cr) in Q2 FY26, a slight improvement from 8.8% (INR 75 Cr) in Q2 FY25. RSSL EBITDA margin was not explicitly detailed for Q2 FY26 but showed a PAT of INR 18 Cr.

Capital Expenditure

Rane Holdings Limited (RHL) has planned standalone annual capex commitments of INR 5-10 Cr for the period H2 FY25 to FY27. The company also invested INR 45 Cr in September 2024 to acquire the remaining 51% stake in Rane Steering Systems Private Limited.

Credit Rating & Borrowing

Ratings reaffirmed at [ICRA]AA- (Stable) for long-term fund-based facilities (INR 75 Cr term loans) and [ICRA]A1+ for short-term unallocated limits. Standalone interest coverage was 9.2x in FY22.

⚙️ Operational Drivers

Raw Materials

Key raw materials include steel, aluminum for light metal castings, friction materials for brake linings, and components for steering/suspension systems. Specific % of total cost per material is not disclosed.

Capacity Expansion

Current capacity includes 30 locations in India and 1 in Mexico. Expansion is being driven by the amalgamation of Rane Brake Lining and Rane Engine Valve into Rane (Madras) Limited to optimize resources and the full acquisition of RSSL to scale Electric Power Steering (EPS) production.

Raw Material Costs

The group implemented strategic savings initiatives on sourcing and power at the group level to mitigate cost pressures. Lean measures are continuously engaged to improve productivity.

Manufacturing Efficiency

RML achieved a Return on Capital Employed (ROCE) of 31% in Q2 FY26. The group utilizes 'Quality Circles' (QC) and lean measures to drive efficiency across its 31 global manufacturing sites.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is targeted through the amalgamation of listed subsidiaries (Rane Brake Lining and Rane Engine Valve into RML) to achieve cost and revenue synergies. The group is also focusing on the acquisition of the balance 51% stake in RSSL (INR 45 Cr) to fully control the Electric Power Steering (EPS) and Manual Steering Column (MSC) business for passenger and commercial vehicles.

Products & Services

Steering and Suspension systems, brake components, engine valves, occupant safety systems (seat belts and airbags), light metal casting products, and connected mobility solutions.

Brand Portfolio

Rane

New Products/Services

Focus on Electric Power Steering (EPS) through RSSL and connected mobility solutions through Rane T4U Private Limited.

Market Expansion

Expansion into North America and Europe through dedicated subsidiaries (Rane Holdings America Inc. and Rane Holdings Europe GmbH) to support business development for group products.

Strategic Alliances

The group previously operated a JV with NSK Ltd. Japan (RNSSPL), which was converted to a 100% subsidiary (RSSL) in September 2024. It maintains a JV with ZF (ZF Rane Automotive India Pvt Ltd).

🌍 External Factors

Industry Trends

The industry is shifting toward Electric Vehicles (EVs), ride-sharing, and sustainable materials. The group is positioning itself by consolidating operations to improve access to capital for these growth opportunities.

Competitive Landscape

Competes with domestic and international auto component manufacturers. Key advantage is the unified approach in customer engagement and supply chain management following the RML amalgamation.

Competitive Moat

Moat is built on long-standing OEM relationships, a 95-year brand history ('Rane' founded in 1929), and a diversified product portfolio across steering, friction, and safety systems which mitigates segment-specific risks.

Macro Economic Sensitivity

Highly sensitive to the Indian and global automotive industry cycles; the group's performance is strongly correlated to GDP growth and interest rates affecting vehicle financing.

Consumer Behavior

Increasing awareness of environmental damage from emissions and a shift toward ride-sharing are noted as potential demand disruptors.

Geopolitical Risks

Exposure to international trade through a manufacturing facility in Mexico and business development offices in Germany and Japan.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to automotive safety standards (seat belts/airbags) and pollution norms. The company conducted a Secretarial Audit for FY25 to ensure compliance with the Companies Act and SEBI regulations.

Environmental Compliance

The group is monitoring risks related to environmental damage from emissions and is adapting product lines (like EPS) to align with EV trends.

Legal Contingencies

Warranty issues in Rane Steering Systems (RSSL) previously led to an increase in debt levels. Specific INR values for pending court cases are not disclosed.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the pace of EV adoption which could disrupt the engine valve business. Vehicle recalls by OEMs due to defective parts could create significant liability.

Geographic Concentration Risk

Heavy concentration in India with 30 manufacturing locations, though international presence is growing via the Mexico plant and global business development offices.

Third Party Dependencies

Dependency on NSK Ltd. Japan ceased following the 100% acquisition of the steering JV in 2024.

Technology Obsolescence Risk

Risk of obsolescence in internal combustion engine components; mitigated by diversification into occupant safety and electric steering systems.

Credit & Counterparty Risk

Receivables quality is generally high as the group serves major established OEMs, and RHL maintains a healthy liquidity position with negligible utilization of working capital limits.