Image Source : Investment Guru
Automotive Axles Ltd, India’s largest independent manufacturer of rear drive axle assemblies for commercial vehicles, has reported its financial results for the June 2025 quarter, showcasing resilience and operational stability despite a mixed outlook in the underlying commercial vehicle (CV) industry. The company posted a consolidated net profit of ₹357.2 million and revenue from operations of ₹4.89 billion, reflecting its ability to navigate sectoral headwinds through product diversification and cost discipline.
Key Highlights as of August 5, 2025:
- Revenue from operations: ₹4.89 billion
- Net profit: ₹357.2 million
- EBITDA margin: Estimated at 11.4 percent
- Share price: ₹1,593.35 (as of last close)
- Promoter holding: 71.04 percent
- Market capitalization: ₹2,950 crore
Financial Performance: Stability Amid Sectoral Challenges
Automotive Axles’ Q1 FY26 results indicate a stable performance, with revenue holding firm at ₹4.89 billion. The net profit of ₹357.2 million reflects a modest year-on-year growth, supported by operational efficiencies and a steady product mix across medium and heavy commercial vehicles.
- YoY revenue change: Flat to marginal growth
- Profit margin: 7.3 percent
- Operating profit: ₹558 million
- Depreciation and amortization: ₹112 million
- Interest expense: ₹34 million
The company’s ability to maintain profitability despite subdued CV demand highlights its robust cost structure and diversified customer base.
Operational Strength and Product Portfolio
Automotive Axles continues to lead in axle manufacturing for haulage trucks, tippers, tractor trailers, and off-highway vehicles. Its facilities in Mysore, Pantnagar, and Jamshedpur are equipped to produce Spiral Bevel, Hypoid, Amboid, and Straight Bevel gear axles, catering to both domestic and export markets.
- Manufacturing capacity: Over 500,000 axle assemblies annually
- Product range: Drive axles, front steer axles, non-drive axles, drum and disc brakes
- Key clients: Tata Motors, Ashok Leyland, Volvo Eicher, Mahindra, and BharatBenz
- Export contribution: 18 percent of total revenue
The company’s flexible housing line and advanced heat treatment facilities have enabled it to meet evolving OEM requirements with precision and reliability.
Strategic Positioning and Ownership Structure
Automotive Axles is a joint venture between Bharat Forge Ltd (Kalyani Group) and Meritor Inc., USA, with each holding a 35.5 percent stake. Following Cummins Inc.’s acquisition of Meritor in 2022, the company now operates as an indirect JV of Cummins, adding global credibility and technical depth to its operations.
- JV partners: Bharat Forge and Cummins (via Meritor)
- Strategic advantage: Access to global technology and R&D
- Governance: Strong board oversight with independent directors and institutional representation
This structure has allowed Automotive Axles to remain agile and competitive in a rapidly evolving mobility landscape.
Market Sentiment and Analyst View
Despite a slight dip in share price, investor sentiment remains cautiously optimistic. Analysts note that Automotive Axles’ consistent performance and strong fundamentals make it a reliable play in the auto ancillary space, especially as CV demand is expected to rebound in H2 FY26.
Shareholding pattern:
- Promoters: 71.04 percent
- Mutual funds: 12.92 percent
- FIIs: 0.55 percent
- Retail and others: 15.49 percent
- 52-week high: ₹1,704.35
- 52-week low: ₹1,549.05
The company’s long-term growth prospects remain intact, supported by infrastructure investments and fleet modernization trends.
Conclusion: A Quarter of Quiet Strength and Operational Discipline
Automotive Axles’ June quarter results reflect a company that continues to deliver steady performance in a challenging environment. With a strong product portfolio, strategic partnerships, and disciplined execution, the company is well-positioned to capitalize on the next wave of commercial vehicle growth.
Source: Moneycontrol
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