ASK Automotive Limited delivered a strong performance in the first quarter, outpacing the two-wheeler industry growth and achieving significant improvements in profitability.

Revenue Growth and Segment Performance

The company reported a consolidated revenue growth of 3.5% year-on-year. Excluding the strategically reduced wheel assembly business, which declined by 53.5%, the core business segments saw an impressive 11.1% revenue growth. This growth was achieved despite the overall two-wheeler industry's production volume increasing by only 0.7% during the same period.

All three of ASK Automotive's business segments showed positive growth:

• Advanced Braking System: 4% growth
• Aluminum Light-weighting Precision Solutions: 15% growth
• Safety Control Cable: 6% growth

Profitability Improvements

ASK Automotive achieved substantial improvements in its profitability metrics:

Operational Highlights

The company's new Bangalore facility, commissioned in January, delivered positive EBITDA in its first full quarter of operations. Management expects this facility to reach 60% capacity utilization by Q2 and become cash positive in the same quarter.

Export Performance and Outlook

Export revenue remained flat at Rs. 33.00 crore due to global geopolitical uncertainties. However, the company maintains its target of 20% year-on-year growth in exports for the fiscal year.

Customer Base and Market Position

ASK Automotive continues to maintain its strong position in the two-wheeler component market. Its top customers include:

1. Honda Motorcycle and Scooter India (HMSI): 35% of revenue
2. TVS: 20-21% of revenue
3. Hero MotoCorp: 17% of revenue

Future Outlook and Expansion Plans

Despite the subdued growth in the two-wheeler industry, ASK Automotive maintains its guidance for mid-teens revenue growth in the fiscal year. The company has announced a CAPEX plan of Rs. 450.00 crore for the year to support its growth initiatives.

Additionally, ASK Automotive has entered into a joint venture with TD Holding for sunroof cables production, marking its entry into a new product category and expanding its presence in the passenger vehicle segment.

Management Commentary

Kuldip Singh Rathee, Chairman and Managing Director of ASK Automotive, commented on the results, stating, "We have sustained our market leadership position in the Advanced Braking system. Our aim is not only to sustain this level of EBITDA margins but continue our efforts to improve gradually in the subsequent quarters, depending upon the growth of the two-wheeler industry."

ASK Automotive's strong quarterly performance, coupled with its strategic initiatives and expansion plans, positions the company well for continued growth in the evolving automotive components market.

ASK Automotive Limited , India's largest manufacturer of brake shoes and advanced braking systems for two-wheelers, has reported robust financial results for the first quarter of fiscal year 2025-26, demonstrating significant growth and profitability improvements.

Strong Financial Performance

The company's consolidated revenue grew by 3.5% year-over-year, reaching ₹895.00 crore in Q1 FY26. Notably, when excluding the strategically reduced wheel assembly business, the revenue growth stood at an impressive 11.1%. ASK Automotive's EBITDA surged by 19.3% to ₹123.00 crore, while PAT increased by 16.3% to ₹66.00 crore compared to the same quarter last year.

Margin Improvement

ASK Automotive achieved its highest quarterly EBITDA margin of 13.8%, marking a significant improvement of 183 basis points from Q1 FY25. This enhancement in profitability was attributed to several factors:

• Better economies of scale due to higher volumes
• Increased capacity utilization at the Karoli facility
• Ramp-up of the new Bangalore facility
• Ongoing cost optimization initiatives
• Strategic reduction in the low value-added wheel assembly business

Segment-wise Performance

The company reported growth across its key business verticals:

Focus on Export Growth and EV Expansion

In line with its growth strategy, ASK Automotive is targeting higher profits through a focus on export growth and expansion in the electric vehicle (EV) segment. The company aims to leverage export opportunities and enter new markets while strengthening its position in the growing EV sector in India.

Premium Product Offerings

ASK Automotive plans to enhance profitability by offering premium products. This strategy aligns with the company's focus on value-added businesses and its aim to maintain and gradually improve EBITDA margins in subsequent quarters.

Outlook and Growth Strategies

Kuldip Singh Rathee, Chairman and Managing Director of ASK Automotive, expressed optimism about the company's performance and future prospects. He stated, "As we go forward, we are hopeful of maintaining the trend of outperforming the industry growth in the subsequent quarters of FY26."

The company's key growth strategies include:

1. Strengthening its position in the growing EV sector in India
2. Diversifying product offerings in advanced braking systems and aluminium lightweighting precision solutions
3. Expanding market presence in passenger vehicles and commercial vehicles segments
4. Focusing on design, R&D, and engineering capabilities
5. Developing innovative systems and solutions with a strong product pipeline

Conclusion

ASK Automotive's strong Q1 FY26 performance, coupled with its strategic focus on export growth, EV expansion, and premium product offerings, positions the company well for sustained growth. As the automotive industry continues to evolve, ASK Automotive's diversified product portfolio and emphasis on innovation are likely to play crucial roles in its future success.