Divgi-TTS H1 FY27 profit jumps 162% as EBITDA margin grows

Divgi-TTS reported H1 FY27 profit after tax of Rs 51.6 crore, up 162% year on year, as total income increased 76% to Rs 290.5 crore and EBITDA margin expanded 453 basis points to 29.4%. The result came despite a 149-basis-point decline in gross profit margin to 61.6%.

What drove Divgi-TTS’s H1 FY27 income growth?

Divgi-TTS’s H1 FY27 income growth was led by Transfer Case revenue, which rose 91% to Rs 156.4 crore from Rs 82 crore in H1 FY26. Total income increased from Rs 165.1 crore to Rs 290.5 crore, while revenue from operations climbed 81% to Rs 280.2 crore. Other income edged down from Rs 10.5 crore to Rs 10.2 crore, indicating that operations accounted for the increase in reported income.

Management attributed Transfer Case volume growth to the Indonesia 4x4 programme ramp-up, increased domestic adoption of 4x4 vehicles, a refresh launch by a key original equipment manufacturer, or OEM, customer, and festive-season demand. Transfer Case represented 54% of H1 FY27 total income. E-Gear Drive revenue increased 30% to Rs 17.2 crore and accounted for 6% of total income.

Components revenue rose 47% to Rs 70.3 crore in H1 FY27, while exports increased 82% to Rs 47.9 crore. Other Business grew 211% to Rs 36.4 crore from Rs 11.7 crore; the category includes ALH, NexTrac, synchronizers, aftermarket, tooling and other operating income. Divgi-TTS reported an H1 FY27 geographical mix of 83% domestic revenue and 17% exports.

How did Divgi-TTS’s EBITDA margin expand despite lower gross margin?

Divgi-TTS expanded earnings before interest, tax, depreciation and amortisation, or EBITDA, margin to 29.4% in H1 FY27 from 24.9% in H1 FY26. That was an increase of 453 basis points, with one basis point equal to one-hundredth of a percentage point. EBITDA more than doubled, rising 108% to Rs 85.4 crore, while profit after tax margin increased 586 basis points to 17.8%.

Gross profit margin declined to 61.6% from 63.1%, although gross profit increased 72% to Rs 179.1 crore. Raw-material costs rose from Rs 60.9 crore to Rs 111.4 crore. Below gross profit, employee benefit expenses increased from Rs 16.8 crore to Rs 24.2 crore, while other expenses rose from Rs 46.4 crore to Rs 69.5 crore, both at a lower rate than total income.

Depreciation and amortisation increased to Rs 16.1 crore from Rs 14.1 crore, while H1 FY27 interest expense was Rs 20 lakh versus Rs 10 lakh a year earlier. Profit before tax rose 158% to Rs 69.2 crore and tax expense increased to Rs 17.5 crore from Rs 7.1 crore. The resulting profit after tax of Rs 51.6 crore grew faster than EBITDA and income as the reported EBITDA margin increased.

Did Divgi-TTS sustain its growth in Q2 FY27?

Divgi-TTS sustained growth in Q2 FY27, with total income reaching Rs 148.7 crore, up 68.4% from Rs 88.3 crore in Q2 FY26 and 5% from Rs 141.8 crore in Q1 FY27. Q2 FY27 EBITDA was Rs 43.8 crore, up 99.1% year on year and 5% sequentially. Profit after tax rose 146.7% year on year to Rs 26.4 crore.

Q2 FY27 EBITDA margin was 29.5%, compared with 24.9% in Q2 FY26 and 29.4% in Q1 FY27. Profit after tax margin was 17.8%, compared with 12.2% a year earlier and unchanged sequentially. These quarterly margins show that the H1 FY27 margin increase was also evident in the second quarter.

Transfer Case revenue rose to Rs 80.4 crore in Q2 FY27 from Rs 76 crore in Q1 FY27 and Rs 42.7 crore in Q2 FY26. E-Gear Drive revenue increased to Rs 11.4 crore from Rs 5.7 crore sequentially, while Components revenue was Rs 35.9 crore and exports were Rs 23.4 crore. Other Business declined sequentially to Rs 15.3 crore from Rs 21.2 crore, but remained above Rs 5.1 crore in Q2 FY26.

How did Divgi-TTS’s balance sheet and cash flow change?

Divgi-TTS’s total assets increased to Rs 808.5 crore at September 2026 from Rs 734.5 crore at March 2026. Property, plant and equipment increased by Rs 22.2 crore to Rs 269.3 crore, capital work-in-progress rose by Rs 3.4 crore to Rs 21.1 crore, and inventories increased to Rs 74.5 crore from Rs 58.8 crore. Trade receivables rose to Rs 110.5 crore from Rs 79.3 crore.

The September 2026 balance sheet showed no non-current borrowings and current borrowings of Rs 10 lakh, unchanged from March 2026. Other equity increased to Rs 671.3 crore from Rs 620.2 crore, while trade payables rose to Rs 81.3 crore from Rs 60.1 crore. Cash and cash equivalents on the balance sheet were Rs 44.3 crore, compared with Rs 31.5 crore at March 2026.

Net cash from operating activities increased to Rs 33.9 crore for the period ended September 2026 from Rs 16.6 crore in September 2025. Operating profit before working-capital changes rose to Rs 77.1 crore from Rs 31.3 crore, while working-capital changes represented an outflow of Rs 29.8 crore versus Rs 9.9 crore a year earlier. Net cash used in investing activities was Rs 23.2 crore, compared with Rs 10 lakh in the preceding period.

What does Divgi-TTS expect for the rest of FY27?

Management expects incremental Indonesia programme volumes to continue through upcoming FY27 quarters and domestic end-market volumes to rise in H2 FY27 with new and facelift programmes from key OEM customers. Divgi-TTS has also received an enquiry from a leading German OEM for European Transfer Case requirements. Management cited its Toyota Tsusho partnership and new all-wheel-drive programmes as future growth and product-diversification avenues.

Management has targeted approximately Rs 80 crore of component exports in FY27 after reporting Rs 47.9 crore in H1 FY27. Its plans include converting opportunities into recurring global programmes and expanding North American customer engagement. During Q2 FY27, Divgi-TTS established a wholly owned South Carolina subsidiary and opened an office at Clemson University CU-ICAR in Greenville.

For E-Gear Drive, management said demand recovered toward the end of Q2 FY27 and continued into Q3, supported by festive demand and market-share gains at a key OEM customer. Automatic Transmission was at the proof-of-concept stage, while Manual Transmission opportunities remained under techno-commercial evaluation. These items are management’s development plans rather than reported revenue commitments.

Conclusion

Divgi-TTS converted 76% H1 FY27 income growth into EBITDA growth of 108% and profit-after-tax growth of 162%. Transfer Case was the principal revenue contributor at Rs 156.4 crore, or 54% of total income, while the 453-basis-point EBITDA-margin expansion more than offset the decline in gross profit margin.

The next developments to watch are management’s expected H2 FY27 ramp-up in Indonesia and domestic Transfer Case volumes, progress toward the approximately Rs 80 crore FY27 component-export target, and conversion of North American and other global request-for-quote opportunities. Divgi-TTS also plans to participate in the SEMA show in Las Vegas from November 3 to 6, 2026, while it continues assessing a business case for local US manufacturing.