Dhoot Transmission lifts FY27 growth target above 40% on demand

Dhoot Transmission Limited raised its FY27 growth guidance from 30% to more than 40% and lifted planned capital expenditure to around Rs 750 crore after EV revenue rose 108% year on year in Q2 FY27 and capacity reached full utilisation. Management said customer demand had exceeded its earlier EV growth assumptions.

Why did Dhoot Transmission raise its FY27 growth target?

Dhoot Transmission raised its FY27 growth target because EV demand exceeded management’s earlier expectation of 20% to 25% growth and customers have provided volume indications for the following year. Management said EV growth reached about 100% during Q2 FY27, requiring capacity additions across product lines to prepare for those volumes.

The company reported 60% year-on-year growth in Q2 FY27, with wiring-harness revenue up 44.6% and non-wiring-harness revenue up 124%. The Multilink acquisition contributed about Rs 160 crore during the quarter, meaning reported growth included both organic expansion and the acquired operation’s revenue.

EV revenue rose 108% year on year and represented 31% of Dhoot Transmission’s total sales in Q2 FY27. That mix increased from 27% in Q1 FY27 and 24% in FY26, a 7-percentage-point change from FY26. Management also said it had begun ramping powertrain-battery volumes for a new customer in South India.

Management cited a supportive industry backdrop, although Dhoot Transmission’s 60% growth was above the 16% growth it cited for the two-wheeler industry. It said domestic EV industry growth exceeded 100%, internal-combustion-engine, or ICE, industry growth exceeded 10%, and two-wheeler exports increased about 28%, based on CM data cited during the call.

What is Dhoot Transmission’s FY27 capex plan?

Dhoot Transmission now expects FY27 capital expenditure of around Rs 750 crore, above its initial expectation, because it is accelerating capacity investment. Management said its operations were already running at full capacity and additional manufacturing capacity was needed to serve demand across the next few years.

The spending will cover ICE and EV wiring harnesses, battery manufacturing, electronics and the Multilink business. Management did not provide a segment-level allocation, but said electronics and battery components together would account for about Rs 150 crore to Rs 200 crore, with part of that spending potentially extending into Q1 of the following year.

Dhoot Transmission plans to commence five additional plants over the next 12 months. These include accelerated investment in two initial public offering-funded plants, leased plants in Pune and Chennai, and a rented plant in Jhajjar. The company is also funding Multilink’s electronics-manufacturing capability and products that are under development, with expenditure starting in FY27.

The plan follows recent plant additions in H1 FY27. Dhoot Transmission added two battery-manufacturing plants, one in South India and one in West India, and both commenced production. Its new wiring-harness plant in Chhatrapati Sambhajinagar also became operational and was already at full capacity, according to management.

Which businesses will receive Dhoot Transmission’s new capacity?

Dhoot Transmission said the capacity build-out will span all major verticals rather than only high-voltage EV wiring harnesses. Management identified ICE wiring harnesses, EV wiring harnesses, battery manufacturing, electronics and Multilink as areas requiring investment after demand rose faster than expected.

Battery and electronics together are set to receive about Rs 150 crore to Rs 200 crore of FY27 spending, though management did not split that figure between the two activities. The company had added two battery plants in H1 FY27, while management discussed battery-pack capacity in the context of high utilisation without disclosing installed capacity or a production target.

Multilink is also part of the expanded programme through a new Hosur facility focused on automation and new products. Management expects the first product to enter the new facility from February 1 and all of the relevant products to move there by April 30. It said the new set-up and automation should support the operation’s planned improvement.

Dhoot Transmission said both Hosur and Aurangabad will handle off-board chargers and DC-DC converters. It also said Multilink brought in a product supplied to Hero MotoCorp, adding that customer through the acquisition. Management described two or three other products as premature and said it would comment once they materialise into business.

Can Dhoot Transmission maintain its profitability guidance?

Dhoot Transmission maintained its guidance for earnings before interest, tax, depreciation and amortisation, or EBITDA, margin of 15% to 16% in coming quarters. Organic adjusted EBITDA margin was 15.2% in Q2 FY27 despite what management called a difficult commodity cycle, particularly during September.

Reported EBITDA margin was 14.3% in Q2 FY27, compared with the 15.2% organic adjusted measure, after a 0.5% employee stock-option-plan, or ESOP, impact and Multilink consolidation. Management expects Multilink margins to improve after integration, but did not disclose a target margin or completion date for that process.

Pre-exceptional profit after tax, or PAT, was Rs 162 crore in Q2 FY27, up 30% from the same quarter a year earlier. Management said lower commodity prices would benefit the company if they soften, while reiterating that its full-year profitability guidance remains in line with the range communicated at the initial public offering.

The move in EV mix from 24% in FY26 to 31% in Q2 FY27 is occurring while Dhoot Transmission funds five plants and integrates Multilink. Management’s stated 15% to 16% margin range therefore depends on executing those projects and on the commodity conditions it identified during the quarter.

What are Dhoot Transmission’s next operational milestones?

Dhoot Transmission’s next disclosed milestones are five plant commencements over 12 months, the February 1 start of products at Hosur and the planned April 30 transfer of relevant products to that facility. These projects accompany the around Rs 750 crore FY27 capex plan and management’s revised growth target of more than 40%.

Management also expects to provide an update on its RideVision collaboration in the next quarter. It said the collaboration is exploring opportunities with various customers, but did not disclose an order value, revenue contribution or launch date. Any progress would therefore need to be assessed against a future company update.

Conclusion

Dhoot Transmission’s upgrade combines faster EV-led revenue growth with an enlarged manufacturing response. EV revenue increased 108% year on year in Q2 FY27 and reached 31% of sales, while the company raised its FY27 growth target by more than 10 percentage points and increased planned capex to around Rs 750 crore. The investment spans established wiring-harness operations as well as batteries, electronics and Multilink.

The next items to watch are the five planned plant commencements over 12 months, the Hosur facility’s February 1 product start and its April 30 transfer target. Management also said part of the Rs 150 crore to Rs 200 crore electronics-and-battery investment could spill into Q1 of the following year, and it plans a RideVision update in the next quarter.