DHOOT TRANSMISSION LTD – Q1 FY27 CONCALL HIGHLIGHTS
#Q1FY27
Q1FY27 Performance
- Revenue growth was nearly 50% YoY, significantly ahead of industry growth.
- Wiring harness revenue grew 44.6% YoY while non-wiring harness revenue grew 67.7% YoY.
- EV revenue increased 79% YoY, with EV contribution rising to 27% of total revenue from 24% last year.
- EBITDA margin improved 110 bps QoQ to 15%.
- Multilink acquisition contributed around 3% to overall revenue growth for the quarter.
- Finance cost declined as working-capital debt levels were optimized following the March equity infusion.
Industry & Outlook
- Domestic automotive volumes grew >20%, while exports grew >36%.
- 2-wheeler industry grew 22.8%, with EV industry growth at 93% and ICE growth at >20%.
- Electrification remains a key growth driver across both wiring and non-wiring harness businesses.
- Addition of new customers and products should support growth over the coming years.
- Management expects 25–30% growth for FY27, while noting a softer comparison for the first six months due to the GST-led growth in H2 last year.
Margin Outlook
- Most copper inflation has already been passed through to customers, although copper prices have continued to rise.
- Management maintains 15–16% EBITDA margin guidance for FY27.
- Raw-material price increases are generally passed through with around a 3-month lag.
- Further recovery in margins is expected when the commodity cycle softens.
- July and August also saw further raw-material price increases, limiting immediate margin recovery in Q2.
Multilink Acquisition
- Full integration of Multilink is expected within 3–4 months.
- Acquisition added Hero as a customer and expanded the product portfolio with fuel-level sensors and relays.
- Significant cross-selling opportunities exist as Multilink serves customers that overlap only partly with Dhoot's existing customer base.
- Management expects Multilink to deliver around 25–30% growth, with margins broadly in line with Dhoot's overall business.
- Goodwill is currently estimated at around 20–25% of acquisition price, subject to final purchase-price allocation.
Non-Wiring Harness
- Q1 revenue stood at ₹358 Cr versus ₹213 Cr YoY.
- Business growth was 67.7%, with Multilink contributing around 10–12% of this growth during its initial period.
- Non-wiring business includes battery packs, controllers, sensors and switches.
- Battery packs remain the largest contributor within the non-wiring harness segment.
EV Opportunity
- Dhoot is present across the EV powertrain, beyond just battery-pack assembly.
- Battery-pack assembly has expanded to a second major customer, with supplies already started.
- Company is also entering the EV charging business.
- Management believes EV adoption is growing faster than earlier expectations.
- Top customers view India as an export base, creating additional opportunities from EV exports.
- EV revenue contribution is expected to exceed 30–32% within the next 2–3 years.
EV Content Potential
- EV wiring-harness content is approximately 1.5x–2.5x that of an ICE vehicle.
- Higher content comes from additional HV harnesses along with other EV components.
- With a broader product basket, total content opportunity can potentially reach up to 4x versus ICE.
- Dhoot supplies products including HV/LV harnesses, cord sets, charging guns, RCDs, chargers, DC-DC converters and battery-pack assemblies.
Battery Pack Expansion
- Company currently supplies battery packs to its leading customer and has added another major customer.
- Second-customer supplies began for approximately one month in Q1.
- Dhoot plans to consolidate its position in 2-wheeler battery packs over the next 1–2 years before aggressively pursuing 3-wheeler battery packs.
- Key battery-pack components including cell holders, tap cells, busbars, wiring harnesses, pressure sensors and connector systems are manufactured in-house.
Wiring Harness Business
- Q1 wiring-harness revenue stood at ₹1,090 Cr versus ₹753 Cr YoY.
- Company is expanding capacity at Jhajjar and Hosur, with these projects expected to add around 15–20% capacity this year.
- Current utilization is maintained around 75% to ensure sufficient capacity during peak seasonal demand.
- Customers can operate at nearly 100% efficiency during the 5–6 month peak season, requiring Dhoot to maintain capacity headroom throughout the year.
Localization & Backward Integration
- Dhoot has a strong localization drive across its wiring-harness operations.
- Imported components have reduced from around 30–35% historically to ~20–25% currently.
- Remaining components are increasingly localized through backward integration.
- Dhoot Auto Components manufactures cables, connectors, terminals and other components in-house.
- The subsidiary conducts around ₹1,200 Cr of business for group companies through internal consumption.
Raw Material Exposure
- Copper accounts for approximately 22–23% of BOM cost.
- Rising copper prices remain a near-term margin pressure.
- Customer repricing generally occurs with a ~3-month lag.
- Management expects recovery once raw-material prices begin to soften.
ADAS / Ride Vision JV
- Dhoot is progressing toward a JV with Ride Vision for 2-wheeler ADAS solutions.
- Product focuses on detecting front/rear collision risks and left/right blind spots.
- Company has presented the technology to major 2-wheeler customers and received strong interest.
- Dhoot plans to initially focus on 2-wheelers, while the technology can potentially address 4-wheelers as well.
- Adoption could be driven by future Government regulations, and management wants to be ready ahead of regulatory implementation.
EV Cord Sets & Switches
- Automotive switches business remains focused on off-highway and tractor applications and is growing broadly in line with the market.
- EV cord-set business is performing strongly.
- Dhoot expects to have around 40–45% share of new Indian EV cord-set business coming for next year.
- Company participates in both LV and HV systems for electric 2-wheelers, which management said is the case for roughly 99% of relevant applications.
M&A & Capital Allocation
- M&A remains a continuous opportunity pipeline with support from Bain.
- Priority for capital deployment is JVs, technology collaborations and organic expansion, followed by M&A.
- Indian acquisitions remain the preferred route.
- Overseas acquisitions would be considered mainly where they provide strategic access to technology or specific sectors.
- Management is currently not pursuing acquisitions in passenger vehicles, although it is in an advanced stage of a JV for passenger-vehicle HV harnesses.
Balance Sheet
- Debt stood at around ₹220 Cr at June-end, after considering the Multilink acquisition and March equity infusion.
- IPO proceeds were received in August.
- Post-IPO, management expects the company to move to a net cash position.
- Indicative net cash at end-August is around ₹1,000 Cr, subject to minor variation.
KEY TAKEAWAY
- 50% growth + 27% EV mix + 25–30% FY27 growth target.
1September 9, 2026 525 2
