TALBROAUTO - Talbros Auto.

📊 NSE: TALBROAUTO 🏢 Auto Ancillaries 📅 Last Updated: 12/14/2025 14:06

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 6.23% to INR 830.32 Cr in FY25. The Gasket segment grew 7.96% to INR 556 Cr, while the Forging segment grew 4.69% to INR 290 Cr, driven by healthy share of business with OEMs.

Geographic Revenue Split

Domestic sales contribute 74% of total revenue. Exports account for 26%, with the UK representing 54% of export mix, followed by Europe (excluding UK) at 26% and the US at 14%.

Profitability Margins

Operating profit margin improved to 17.95% in FY25 from 16.50% in FY24. Net profit margin (excluding exceptional items) improved to 9.42% from 8.73% YoY, reflecting enhanced operational leverage and cost structures.

EBITDA Margin

Consolidated PBILDT margin stood at 16.07% in FY25, up from 15.15% in FY24. Core profitability is supported by economies of scale and a favorable product mix, reaching 16.5% in Q2 FY26.

Capital Expenditure

The company is planning a consolidated capex of INR 25-32 Cr (approximately 6% of tangible net worth) for capacity expansion in the gasket (heat shield) and forging divisions, funded through internal accruals.

Credit Rating & Borrowing

The company maintains a comfortable financial risk profile with a 'Stable' outlook. Interest coverage ratio improved to 9.74x in FY25 from 8.93x in FY24, indicating strong ability to service debt.

⚙️ Operational Drivers

Raw Materials

Key raw materials include rubber, rubber compounds, chemicals, and steel for forgings. Specific cost percentages for each material are not disclosed in available documents.

Capacity Expansion

Planned expansion of the gasket division (specifically heat shields) and forging division capacity is underway with a budget of INR 25-32 Cr to meet growing OEM demand.

Raw Material Costs

Raw material price volatility is a key threat to profitability. The company uses proactive risk management, including hedging and localization, to mitigate cost fluctuations.

Manufacturing Efficiency

PBILDT margins improved by 142 bps in FY24 due to economies of scale. Operational excellence and cost-saving measures contributed to a robust 16.5% EBITDA in recent quarters.

📈 Strategic Growth

Expected Growth Rate

17%

Growth Strategy

Growth is targeted through a focus on high-margin exports (26% of revenue), capacity expansion in heat shields and forgings (INR 25-32 Cr), and leveraging technical JVs with Marelli and Marugo Rubber to supply advanced chassis and anti-vibration components to top OEMs.

Products & Services

Automotive and industrial gaskets, forgings, heat shields, anti-vibration rubber products, front cross members, control arms, and rear twist beam axles.

Brand Portfolio

Talbros

New Products/Services

Focus on high-performance anti-vibration components and rubber products through the Marugo Rubber JV and advanced chassis systems through the Marelli JV.

Market Expansion

Expanding global presence in the UK, Europe, and US markets, which currently account for 54%, 26%, and 14% of the export mix respectively.

Strategic Alliances

Key JVs include Marelli Talbros Chassis Systems Pvt Ltd (50:50 with Marelli SPA) and Talbros Marugo Rubber Pvt Ltd (50:50 with Marugo Rubber Industries, Japan).

🌍 External Factors

Industry Trends

The industry is shifting toward BS-VI Phase II norms and EV-ready components. The company is positioning itself through JVs for anti-vibration and chassis components for evolving mobility needs.

Competitive Landscape

Talbros is a flagship player in the Indian auto ancillary sector, competing through technological superiority and a diversified product portfolio across gaskets and forgings.

Competitive Moat

Durable advantages include a 50-year track record of dividend payouts, long-standing relationships with top global OEMs, and technical mastery through Japanese and European JVs.

Macro Economic Sensitivity

Highly sensitive to automotive industry volumes, which reached 8.8 million units in the analyzed period. 2-wheeler industry growth of 10.3% directly impacts segment demand.

Consumer Behavior

Demand is highly seasonal, with sharp rebounds noted during Navratri and the festive season following muted periods like the pre-GST 2.0 rollout.

Geopolitical Risks

Global headwinds and geopolitical volatilities are cited as threats that could impact the 26% export revenue stream.

⚖️ Regulatory & Governance

Industry Regulations

Operations are influenced by BS-VI Phase II emission norms, PLI schemes, and FAME-II initiatives which support R&D and localization.

Environmental Compliance

The company adheres to IATF 16949, ISO-14001, and ISO 45001 certifications for environmental and occupational health standards.

Taxation Policy Impact

Net profit margin (excluding exceptional items) was 9.42% in FY25. The company navigated the GST 2.0 rollout which caused temporary demand postponement.