Tenneco Clean Air India Limited: Navigating Growth with Strategic Precision

Tenneco Clean Air India Limited, a key player in the automotive components sector, has reported a robust performance for Q2 and H1 FY2026, demonstrating strong growth and strategic execution. The company, which recently concluded a highly successful IPO with an oversubscription of 61 times, is positioning itself as a leader in clean air and advanced ride technologies, leveraging its global parentage and deep market understanding.

For Q2 FY2026, Tenneco Clean Air India Limited recorded a Value Added Revenue (VAR) of INR 1151.5 crore, marking an 8.9% year-on-year growth. The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stood at INR 216.8 crore, growing by 5.7% year-on-year, with a healthy margin of 18.8%. Profit After Tax (PAT) reached INR 150.7 crore, up by 9.9% year-on-year, reflecting a PAT margin of 13.1%. The reported revenue from operations for the quarter was INR 1280.6 crore, a 9.6% increase from the previous year.

The first half of FY2026 also showcased strong momentum, with VAR at INR 2318.1 crore, an 8.2% growth year-on-year. This growth notably outpaced the sub-markets of Passenger Vehicles (PV), Commercial Trucks (CT), Off-Highway (OH), and industrial segments, which grew at 5% in Q2 and 4% in H1 FY2026. H1 EBITDA was INR 445.7 crore, a 6.6% increase, maintaining strong margins at 19.2%. PAT for the half-year was INR 318.8 crore, up 10.9% year-on-year, with margins at 13.8%. The revenue from operations for H1 FY2026 was INR 2566.3 crore, growing 5.2% year-on-year.

Strategic Wins and Market Outperformance

Arvind Chandrasekharan, Whole-Time Director and CEO, emphasized the company's disciplined execution and strategic wins. A significant highlight was securing INR 9840 crore in incremental lifetime order bookings, including INR 1760 crore from exports. These bookings are expected to materially enhance the company's revenue visibility over the next five to six years. Key wins include a strategic entry into the clean air business with a leading Japanese passenger vehicle OEM, tapping into a previously unaddressed market segment. Additionally, the company strengthened its number one position in shock absorbers in India with a major win from a prominent Indian OEM.

Mahender Chhabra, Chief Financial Officer, reiterated the company's robust financial health, highlighting its capital-efficient model. Tenneco Clean Air India Limited continues to operate debt-free, funding all its capital expenditure and working capital requirements through internal accruals. The company maintains a strong Return on Capital Employed (ROCE) profile and a negative working capital intensity, with a cash conversion cycle of -22 days, underscoring its operational efficiency.

Capitalizing on Industry Tailwinds

The company is strategically positioned to benefit from several industry tailwinds. Tightening emission standards, such as TREM2 V-2027, BS VII, and CAFE III-2027-32, are driving the need for more advanced clean air and powertrain solutions. Tenneco's expertise in these areas allows it to capture significant content growth with upcoming legislation, particularly with TREM 5 expected around 2027.

The Indian market's shift towards premiumization, including the growing popularity of SUVs and the increasing adoption of Electric Vehicles (EVs) and hybrids, presents another significant opportunity. This trend fuels demand for advanced ride technologies, where Tenneco is innovating with smart systems for real-time damping adjustments, enhancing comfort and handling. The company anticipates faster adoption of these advanced technologies as OEMs seek to differentiate their offerings.

Furthermore, India is emerging as a crucial export hub for global OEMs. This is driven by factors such as India's competitive cost base, engineering talent, resilient supply chain, and the global push for supply chain diversification. Tenneco is actively leveraging this trend, with exports already reaching 20 countries, and expects this segment to grow significantly faster than its domestic business.

Operational Excellence and Future Outlook

Tenneco's operational excellence is underpinned by its global R&D support, with over 5,000 patents, and a localized engineering and manufacturing footprint across 12 plants and two R&D centers in India. This integrated approach enables the company to develop affordable, highly engineered products, reduce validation costs, and achieve faster time to market. The company's focus on high safety and zero-defect process discipline has fostered long-standing partnerships with major OEMs, averaging 20 years.

While acknowledging potential near-term softness in EBITDA margins due to new public listing costs and a slowdown in commercial truck and certain passenger vehicle segments, management expressed confidence in its ability to absorb these costs through sustained revenue growth. The company's commitment to strategic localization, innovation, and disciplined execution positions it for continued market outperformance and long-term value creation.

Financial Summary

Segment Performance (FY2025 VAR)

In conclusion, Tenneco Clean Air India Limited is demonstrating strategic clarity and disciplined execution, translating into sustained growth and strong financial performance. The company's proactive approach to industry trends, coupled with its robust operational model and significant order book, reinforces its position as a trusted partner in the evolving transportation industry, poised for continued success.