Tenneco Clean Air India Q1FY27: EBITDA rises 7.9% on VAR growth
Tenneco Clean Air India delivered strong top-line growth in Q1FY27 with revenue rising 20.2% to ₹15,448 million. Core profitability, measured by EBITDA on Value-Added Revenue, grew 7.9% to ₹2,469 million despite commodity headwinds. Net profit declined 1.7% to ₹1,652 million, impacted by a one-time gain from the Motocare sale in the previous year.
*this image is generated using AI for illustrative purposes only.
Tenneco Clean Air India Limited reported consolidated revenue from operations rising 20.20% year-on-year to ₹15,448 million in Q1FY27, driven by strong volume growth and new program wins. The company’s core profitability metric, EBITDA calculated on Value-Added Revenue (VAR), increased 7.9% to ₹2,469 million, reflecting resilient operating performance despite commodity price headwinds. However, net profit after tax (PAT) declined 1.7% to ₹1,652 million, primarily due to a one-time interest income benefit of approximately ₹187 million from the sale of the Motocare entity in the corresponding quarter of the previous year.
The Board of Directors approved the unaudited standalone and consolidated financial results during its meeting on August 5, 2026. The results were reviewed by M/s. Deloitte Haskins & Sells LLP, the statutory auditors, who issued an unmodified conclusion. The financial statements were prepared in accordance with Indian Accounting Standard 34 (Ind AS 34) and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. An investor presentation was released on August 6, 2026, pursuant to Regulation 30 of the SEBI LODR Regulations, 2015.
Financial Performance Overview
Consolidated total income reached ₹15,534 million, comprising ₹15,448 million from operations and ₹86 million from other income. Total expenses were ₹13,340 million, including cost of materials consumed at ₹10,279 million and employee benefits expense of ₹964 million. Profit before tax stood at ₹2,194 million, while tax expense decreased to ₹542 million from ₹591 million in the prior year period.
On a standalone basis, total income was ₹6,540 million, with other income contributing ₹74 million. Total expenses amounted to ₹5,350 million, led by cost of materials consumed at ₹4,211 million. Standalone profit before tax was ₹1,190 million, and total tax expense was ₹283 million. The following table summarises key financial metrics across both consolidated and standalone bases:
| Particulars: | Consolidated Q1FY27 (₹ Million) | Consolidated Q1FY26 (₹ Million) | Standalone Q1FY27 (₹ Million) | Standalone Q1FY26 (₹ Million) |
|---|---|---|---|---|
| Revenue from Operations: | 15,448 | 12,856 | 6,466 | 5,664 |
| Other Income: | 87 | 308 | 74 | 374 |
| Total Expenses: | 13,340 | 10,892 | 5,350 | 4,630 |
| Profit Before Tax: | 2,194 | 2,272 | 1,190 | 1,408 |
| Net Profit After Tax: | 1,652 | 1,681 | 907 | 1,120 |
| Earnings Per Share (Basic): | ₹4.09 | ₹4.16 | ₹2.25 | ₹2.78 |
The table below captures the latest EBITDA metrics on a year-on-year basis, highlighting the shift to VAR-based reporting for better comparability:
| Metric: | Q1FY27 | Q1FY26 |
|---|---|---|
| EBITDA (VAR Basis): | ₹2,469 Million | ₹2,289 Million |
| EBITDA Margin (% VAR): | 17.9% | 19.6% |
| PAT Margin (% VAR): | 12.0% | 14.4% |
Segmental Growth and Operational Highlights
The Advanced Ride Technologies (ART) segment emerged as the primary growth engine, with revenue rising 27.90% to ₹7,190 million from ₹5,621 million in Q1FY26. This surge was fuelled by the expanded footprint of the DCx Da Vinci suspension system, adding four new customers and three new models in 2026. The company's passenger vehicle shock absorber and strut value market share expanded by 300 basis points year-on-year to 55% in FY26. Additionally, Tenneco Clean Air India introduced the DCx32 variant for smaller vehicles and successfully benchmarked Mechanical Adaptive Roll Damping (MARD) dampers with a leading domestic OEM. CEO Arvind Chandrasekharan noted that ART also secured its maiden order from a leading European ATV manufacturer, marking entry into a new whitespace.
The Clean Air & Powertrain Solutions segment reported revenue of ₹6,626 million, up 9.60% from ₹6,044 million. Key wins included a strategic spark plug order from India's leading passenger vehicle OEM, a new exhaust program from a leading Indian car maker, and a CNG platform cold-end assembly program from a global OEM. The company also reinforced spark plug compatibility with flex-fuel applications up to E85. In the commercial vehicle space, market share in Clean Air Solutions increased to 58%, up 1% year-on-year.
Margin Pressures and Cost Dynamics
The EBITDA margin on a VAR basis contracted to 17.9% from 19.6% year-on-year, reflecting the impact of significant commodity price increases stemming from geopolitical tensions, as well as incremental costs associated with transitioning from a private to a listed public company. Despite these headwinds, EBITDA in absolute terms improved to ₹2,469 million from ₹2,289 million, reflecting underlying volume-driven growth. CFO Mahender Chhabra highlighted that the P3 framework helped drive continuous improvement across safety, quality, delivery, and cost, maintaining facilities that meet global benchmarks.
What the Numbers Show
The divergence between top-line growth and bottom-line PAT performance underscores the impact of non-recurring items in the prior year. While revenue grew 20.2%, PAT declined 1.7% largely because Q1FY26 included a one-time gain from the Motocare sale. Excluding this benefit, PAT growth would have been comparable to EBITDA growth at 7.9%. The use of Value-Added Revenue (VAR) as a primary metric excludes pass-through substrate costs, providing a clearer view of operational efficiency. The contraction in VAR-based EBITDA margin from 19.6% to 17.9% indicates that input cost inflation is outpacing pricing power or productivity gains, a trend management acknowledges as ongoing due to geopolitical factors.
Historical Stock Returns for Tenneco Clean Air
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.57% | -5.33% | -0.40% | -7.40% | 0.0% | 0.0% |
How does management plan to offset the 170 basis point contraction in VAR-based EBITDA margins given the persistent geopolitical commodity price headwinds?
What is the expected revenue contribution timeline for the new DCx Da Vinci suspension system customers and the maiden European ATV order in upcoming quarters?
Will the incremental costs associated with transitioning to a listed public entity continue to pressure operating margins in Q2FY27, or are these considered one-time expenses?
20
Create Custom Screeners 
Access 200+ Pre-built Filters 
Use 50+ Readymade Screener 
