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In-line performance

* 1QFY26 consol. revenue grew ~17.5% YoY to INR33.2b (in line with estimates), driven by ~10.1% YoY growth in standalone (India) business (vs. 2W industry sales decline of 1.6%) and ~39% YoY growth in Europe (in INR; +28.5% in EUR terms).

* Europe business growth was aided by new hybrid/EV orders and Stoferle consolidation. Organic growth would be 0.6% compared to a 1.8% fall in EU new car registrations. Maxwell revenue jumped 10x YoY (on a low base) to INR310m, led by higher volumes from key customers.

* Standalone EBITDA margin declined 50bp YoY to 12.4% (below our estimate of 12.9%), impacted by higher metal prices. However, given a higher-than-expected revenue growth, EBITDA was in line with our estimate at INR2.9b.

* Europe EBITDA margin (including other income) expanded 90bp YoY to 17.4%. Maxwell reported a positive EBITDA of INR10m vs. a loss of INR42m YoY.

* Consolidated PAT grew 11.0% YoY to INR2.3b (in line), supported largely by inorganic growth (Europe PAT growth of 42% YoY). On the other hand, standalone PAT grew 1.8% YoY to INR1.7b, while Maxwell reported a reduced loss at INR20m vs. INR70m in 1QFY25.

From the investor presentation

India

* 1Q order wins in India stood at INR5.6b (excl. Bajaj Auto), including INR3.0b for battery packs and INR80m for Maxwell. ? Cumulative EV orders (excl. battery packs) in India reached INR10.2b, including Bajaj Auto. 1Q EV orders formed ~12% of total orders vs. 49% in FY25 and 5% in FY24.

Europe

* 1Q Europe order wins stood at EUR1.7m. The cumulative order book was at EUR231m over the last five years. ? Of these, orders worth EUR94m (41%) are for EVs and EUR98m (42%) for hybrid applications. ICE share in revenues (~40% in FY25) is expected to reduce to 25% by FY28.

Valuation view: The stock trades at ~34.5x/29.2x FY26E/27E consol EPS.

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