JTEKT India Reports 5.6% H1 Sales Growth, Expects Recovery in Margins

JTEKT India , a leading automotive component manufacturer, has reported a 5.6% sales growth in the first half, outpacing the passenger vehicle market's 1.6% growth. The company, however, faced margin pressures due to various factors, including higher employee costs and delayed new product launches.

Financial Performance

JTEKT India's EBITDA margins improved to 7.2% in Q2 from 5.3% in Q1. However, the overall H1 EBITDA margin of 6.3% was lower compared to 7.6% in the previous fiscal year. The company attributed this decline to several factors:

Higher employee costs, which increased by 0.8% as a percentage of sales
Delayed start of production for certain models, affecting product mix
Continued impact of lower exports to the U.S. due to trade conflicts
Ongoing new product development costs

Product Mix and Sales Distribution

JTEKT India's product portfolio primarily consists of:

Product Category	Sales Contribution
Column Power Steering (CPS)	46%
Manual Steering (MS) Gear	27%
Other Steering Components	22%
Constant Velocity Joints (CVJ)	4%
Other Driveline Products	1%

The company's client base is diverse, with Maruti Suzuki being the largest customer:

Customer	Sales Contribution
Maruti Suzuki	56%
Toyota	12%
Mahindra & Mahindra	8%
Honda	5%
Renault-Nissan	3%
Tata Motors	2%
Others (including exports)	14%

Future Outlook and Strategies

JTEKT India is implementing several strategies to improve its performance and profitability:

Capacity Expansion: The company is investing INR 460 crores across multiple facilities to expand production capacity for MS gears, CPS, and CVJ.
Export Growth: JTEKT India plans to start supplying steering manual gears to JTEKT Brazil, with potential to reach 5 lakh units annually. This could increase the company's export contribution from the current 2% to 8-10% of total sales.
New Product Launches: The company is supplying components for new models like Maruti Suzuki's e-Vitara and Victoris, which are expected to drive growth.
Cost Reduction Initiatives: JTEKT India is focusing on manufacturing rationalization, inventory reduction, and logistics cost optimization.
Backward Integration: The company is setting up a forging facility for CVJ components, which is expected to improve cost competitiveness and quality.

Management Commentary

Rajiv Chanana, Whole-Time Director of JTEKT India, stated, "We expect that the factors affecting our margins are temporary and will improve in the next 6 months' time or the next 2 to 3 quarters, and we expect to come back to our original profit levels."

The company remains optimistic about the automotive sector's growth and is positioning itself to meet increasing industry requirements through capacity expansion and product diversification.

As JTEKT India navigates through these challenges and opportunities, investors and industry observers will be keenly watching the company's ability to capitalize on the growing automotive market while improving its operational efficiency and profitability.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.65%	-1.27%	+3.15%	+14.78%	+1.74%	+105.24%

Jtekt India Limited, a leading manufacturer of steering systems for passenger vehicles, has reported a 4% revenue growth to Rs 12,051.00 million in the first half of FY26, outpacing the industry growth of 1.60%. The company's performance, however, was tempered by a decline in EBITDA margin from 7.60% to 6.30% during the same period.

Key Financial Highlights

Metric	H1 FY26	Change
Revenue	Rs 12,051.00 million	+4.00%
EBITDA Margin	6.30%	-1.30 percentage points

Growth Drivers and Challenges

JTEKT India's better-than-industry growth was attributed to:

Presence in better-performing vehicle models
Introduction of new Drive Shaft (CVJ) products

However, the company faced several challenges that impacted its profitability:

Factors Affecting EBITDA Margin

Factor	Impact	Reason
Employee Cost	-0.80%	Annual salary increments not fully absorbed due to lower-than-expected sales
Manufacturing Expenses	-0.40%	Increase in power tariff and higher power utilization for new production lines
Material Cost	-0.20%	Adverse product mix and higher new product development costs

Operational Highlights

JTEKT India continues to expand its production capacity, as evidenced by additional capital expenditure. The company expects to realize the benefits of these investments over time.

The company maintains a diverse product portfolio, including manual and power steering systems, steering columns, and driveline products. JTEKT India serves major vehicle manufacturers in India, such as Maruti Suzuki, Toyota, Tata Motors, Mahindra & Mahindra, and others.

Looking Ahead

While JTEKT India has demonstrated resilience in revenue growth, the company faces challenges in maintaining profitability. The management's focus on new product introduction and capacity expansion suggests a long-term growth strategy, although short-term pressures on margins persist.

Investors and analysts will be closely watching how JTEKT India navigates these challenges and capitalizes on its market position in the coming quarters.