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Topline benefits from aluminum inflation; YoY margin expansion
continues

ASK Automotive’s Q2FY26 results beat estimates, with Revenue/EBITDA/PAT ahead by
4.4%/1.5%/4.5%. Revenue grew 8.2% YoY to Rs 10,537 mn (up 16.6% YoY excluding the Wheel
Assembly business), driven by strong performance in ABS (+10%), ALPS (+22%), and SCC (+2%).
Revenue was positively impacted by ~2.5-3% due to aluminum inflation. Calculated EBITDA
margin improved 102 bps YoY to 13.0%, led by better operating leverage, higher capacity
utilization at Karoli and Bengaluru plants, and a 53.5% reduction in low-value Wheel Assembly
business. Absolute EBITDA grew by 17.4% YoY. PAT rose 18.6% YoY, due to the strong
operating performance and aided by a slightly lower ETR.

Segmental Performance

* Advanced Braking Systems (ABS): Revenue up 10% YoY in Q2, maintaining leadership
   position.
* Aluminum Lightweighting Precision Solutions (ALPS): Strong growth of 22% YoY, driven by
   new product wins and PV entry.
* Safety Control Cables: Grew 2% YoY, impacted by model mix at the customers’ end.
* Aftermarket: Expect to benefit from GST cut on all of the company’s products (from 28% to
  18%), helping shift demand from the unorganized to organized market.

Margin & Cost Dynamics

Margins improved on the back of operating leverage and higher utilization at the Karoli and
Bangalore facilities. While the revenue benefitted ~2.5–3% due to higher aluminium costs, it
led to ~30bps pressure on EBITDA margins. Absolute EBITDA remained unaffected, as
aluminum price movements impact only margin percentages, not absolute profitability.
Management reiterated its FY26E margin guidance of 13.7%.

Plant Performance & Capacity Utilization

* Bangalore Plant: Reached 60% utilization in Q2; expected to ramp up to 70–75% by
Q4FY26E.
* Karoli Plant: Operating at 60–70% utilization and undergoing continuous capacity addition.
Both plants now operate at blended margin levels, reflecting efficient cost absorption and
productivity.

Capex & Expansion

* FY26E Capex is planned at Rs 4,500 mn, with Rs 3,700 mn already incurred in H1. Of this, ~
Rs 2,500 mn is for the Karoli plant and ~Rs 1,000 mn for Bangalore with the rest being
maintenance capex.
* On average, the company invests Rs 4,000 mn in capex every year.
* Asset turn remains ~1.75x, with a strong focus on maintaining high ROCE levels.

Alloy Wheel Business

Two collaborations in progress, one with Taiwan and another with Japan. The Taiwan JV
product has been under customer testing for over a year. For the Japan JV plant, machinery
will be received in Q4FY26E, and supplies can start for the Japanese OEM post-testing. Total
capex is of ~Rs 1,250 mn, supporting Rs 2,500 mn revenue potential.

Aluminum Light Weighting Precision Solutions (ALPS) Business Outlook

The ALPS segment remains a key growth driver, with growth in 2W as well as ASK expanding its
PV aluminum portfolio beyond ECU body components. Additional products are under
development. Management anticipates sustained strong growth, supported by new program
launches.

Exports

Exports remained subdued due to geopolitical disruptions, particularly rare earth and magnet
supply shortages. However, management expects improvement from Q4FY26E, supported by
China easing export restrictions and normalized supply chains. Despite challenges, ASK expects
to surpass last year’s export revenue.

Joint Ventures & New Products

ASK’s JV with TD Holding (Germany) for sunroof control and helix cables is set for commissioning by H1FY27E, with revenue from H2FY27E.

Outlook & Guidance

Management remains confident of sustaining mid-teens revenue growth, driven by the ramp-up of Bangalore and Karoli plants, strong growth in ALPS, and expansion into PV and export markets. Despite near-term aluminum cost inflation, profitability is expected to remain steady at ~13.4–13.7%, supported by cost control and operating leverage. The company reiterated its commitment to profitable, sustainable growth with strong capital discipline and consistent industry outperformance.

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