Rane (Madras) Limited delivered exceptional financial performance in Q3FY26, with consolidated revenue reaching ₹10 billion compared to ₹8.4 billion in the corresponding quarter of the previous year, representing strong year-on-year growth. The auto component manufacturer demonstrated robust operational efficiency with EBITDA reaching ₹927 million versus ₹674 million in the previous year, while EBITDA margin expanded to 9.13% from 8.05% year-on-year.

Outstanding Revenue and Profitability Performance

The company's financial performance was particularly impressive, showcasing the effectiveness of operational improvements and strategic initiatives across both revenue generation and profit optimization.

Consolidated Financial Performance Highlights

The company delivered impressive consolidated financial results for Q3FY26, with significant improvements across all key performance metrics and operational efficiency measures.

Consolidated revenue from operations reached ₹1,015.15 crores in Q3FY26 compared to ₹837.37 crores in the corresponding quarter of the previous year. The revenue growth was driven by an 18% increase in sales to domestic OE customers, 21% growth in international customer sales, and a notable 32% expansion in Indian aftermarket customer sales.

Operational Efficiency and Margin Expansion

The company achieved significant operational improvements during the quarter, with enhanced profitability metrics and cost optimization across various parameters.

Nine-Month Performance Overview

For the nine months ended December 31, 2025, the company maintained its growth momentum with consolidated revenue increasing 12.40% to ₹2,826.91 crores from ₹2,516.11 crores in the corresponding period of the previous year.

Corporate Developments and Strategic Initiatives

During the Board meeting held on February 04, 2026, directors approved several key decisions including the appointment of R. G. N. Price & Co. as Internal Auditors for the period from January 01, 2026 to December 31, 2026, replacing Deloitte Touche Tohmatsu India LLP. The Board also approved the appointment of Konark Kumar Gupta as President – Aftermarket Products Business effective February 09, 2026.

The company reported exceptional items of ₹0.87 crores for Q3FY26, primarily related to voluntary retirement expenditure. Additionally, the company has entered into an agreement to sell 3.48 acres of land in Velachery for ₹361.18 crores, having received an advance of ₹130 crores till December 31, 2025, while retaining 1.02 acres for constructing a new office facility.

Rane Madras Limited has informed stock exchanges about receiving a show cause notice from the Principal Commissioner of Income Tax Chennai regarding disallowance of certain expenditures worth ₹7.61 crores. The disclosure was made on January 10, 2026, under Regulation 30 of SEBI LODR regulations.

Show Cause Notice Details

The company received the show cause notice on January 09, 2026, under Section 263 of the Income Tax Act, 1961. The notice specifically relates to the disallowance of expenditures concerning treatment of trademark fee expenditure and actuarial gain/loss on Defined Benefit Plan of Gratuity.

Financial Implications

The expected financial implications on Rane (Madras) Limited amount to ₹2.66 crores, excluding applicable interest and penalty, if any. This represents the potential impact on the company's financials should the income tax authority's position be upheld.

Company's Response Strategy

Rane (Madras) Limited has outlined its approach to address the show cause notice. The company stated that it will file a suitable reply before the appropriate authority within the prescribed timelines, in consultation with its consultants and tax advisors.

Regulatory Compliance

The disclosure was made in compliance with Regulation 30(13) of SEBI LODR regulations, specifically under Part A Para B.8 Schedule III. The company has declared that the information provided is true, correct and complete to the best of its knowledge and belief, as per the SEBI Master Circular dated November 11, 2024.

The matter pertains to the company's financial operations during the financial year 2019-20, and the outcome will depend on the company's response to the income tax authorities and subsequent proceedings.