NDR Auto Components: Navigating Growth with Strategic Expansions and Robust Performance in Q2 FY26

NDR Auto Components Limited, a prominent player in India's automotive ancillary sector, has reported a strong financial performance for the second quarter and first half of the fiscal year 2026. The company's results reflect a resilient operational strategy amidst evolving market dynamics, marked by significant revenue growth and enhanced profitability. This period underscores NDR Auto's commitment to expanding its product portfolio and strengthening its market position through strategic initiatives and operational efficiencies.

For Q2 FY26, NDR Auto Components recorded a total income of INR 200.77 crore, demonstrating a commendable year-on-year growth of 14.35%. This growth translated into a robust EBITDA of INR 22.58 crore, an increase of 20.77% compared to the previous year, with EBITDA margins improving to 11.24%. The net profit for the quarter stood at INR 14.85 crore, reflecting a 24.29% rise. The company's Return on Capital Employed (ROCE), excluding non-productive land and surplus cash, was an impressive 31.07% as of September 30, 2025. The first half of FY26 also maintained this positive trajectory, with a total income of INR 386.58 crore and an EBITDA of INR 43.03 crore, showcasing consistent performance.

Financial Highlights: A Snapshot

Strategic Initiatives Driving Future Growth

NDR Auto Components is actively pursuing strategic expansions to diversify its product offerings and cater to the evolving needs of the automotive industry. A key highlight of this period is the signing of two new Technology License Agreements (TLAs). The first TLA is with Fujikura Ltd for Seat Belt Reminder Systems (SBRS). Fujikura's extensive experience in developing these systems across global markets will enable NDR Auto to integrate advanced sensor technology into seat designs for both front and rear applications. This initiative, backed by an investment of INR 7.43 crore, is projected to generate an additional INR 30-40 crore in annual revenue, with manufacturing slated to commence in January 2027.

The second TLA is with Fischer Dynamics for physical latches for car seats. Fischer Dynamics, a century-old entity known for its innovation in seat structures and mechanisms, will license NDR Auto to establish a latch manufacturing facility. This project, involving an investment of INR 17.43 crore, is also expected to contribute INR 30-40 crore in annual revenue, with production targeted for January 2027. These latches not only enhance boot space and luggage area but also serve as critical safety features, preventing rear seat bending during accidents.

Further bolstering its manufacturing capabilities and client base, NDR Auto is establishing a new plant in Ananthpur to fulfill a new order from Kia for seat covers and seat frames. This expansion, driven by NDR Auto's superior quality and delivery performance, is expected to significantly boost volumes, with production anticipated to start in FY27. Additionally, the joint venture with Hayashi Telempu Corporation, NDR Hayashi Automotive India Pvt. Ltd. (NHI), formed in 2025, is set to roll out products early in FY27. This JV will manufacture a range of NVH (Noise, Vibration, Harshness) floor carpets, dash inners, rear shades, tonneau covers, ambient lighting, and other interior/exterior components, with the first order for ambient lighting already secured for 2027.

Market Outlook and Management Commentary

Management expressed optimism regarding the market outlook, noting a strong uptick in demand since late September, which is believed to be sustainable. This positive sentiment is supported by factors such as GST rate reductions, festive demand, and increasing disposable incomes, leading to upgrades to higher-end vehicles. These trends align well with NDR Auto's strategy of enhancing value and content for vehicles.

While acknowledging that some previously projected incremental sales targets for FY26 (INR 250-300 crore) might not be fully realized due to the underperformance of one model (Syros) and delays in another, the company has demonstrated agility. It has secured new business for the Carens model, which commenced in Q3, to mitigate these impacts. Management anticipates that the second half of FY26 will outperform the first half, driven by the scaling up of eVITARA and BIW segments, coupled with easing supply chain bottlenecks. The company is also actively working on improving its margins quarter-on-quarter, with a long-term vision of achieving INR 3,000 crore in revenue and a ROC of 25% by FY30.

In conclusion, NDR Auto Components Limited's Q2 FY26 performance reflects a company on a growth trajectory, strategically expanding its product portfolio and manufacturing footprint. Despite minor setbacks in specific model performances, the management's proactive approach to market changes and continuous investment in innovation position NDR Auto for sustained growth in the dynamic Indian automotive components sector.