Divgi TorqTransfer Systems: Soaring to New Orbits with Record Performance and Strategic Global Expansion

Divgi TorqTransfer Systems Limited, a prominent player in the automotive drivetrain sector, has reported an exceptional performance for Q3 FY26 and the nine months ended December 31, 2025. The company achieved its highest-ever quarterly total income, signaling a robust acceleration in business performance and execution strength. For the nine-month period, total income surged by 48% year-on-year to INR 261.4 crore. This impressive growth was mirrored in profitability metrics, with EBITDA climbing 46% to INR 64.4 crore and Net Profit soaring by 65% to INR 31.4 crore. The company's consistent delivery reflects a strategic blend of product innovation, operational efficiency, and expanding market reach.

The strong financial results were primarily driven by sustained momentum in transfer case volumes and robust performance in the components business, particularly exports. The transfer case segment demonstrated a remarkable 58% year-on-year growth for the nine months, benefiting from healthy volume uptake from key OEM customers and increasing adoption of 4-wheel drive configurations. The components segment, predominantly export-driven, emerged as a clear star performer, recording an exceptional 117% year-on-year growth in 9MFY26. Export revenues, which were negligible in FY23, have now reached a quarterly run rate of approximately INR 19 crore, showcasing a significant turnaround in global acceptance of Divgi's precision-engineered components. This export-led growth is steadily moving the company towards its medium-term target of 20-25% export contribution to total income. The enhanced operating efficiency, coupled with an improved product mix and operating leverage benefits from higher volumes, contributed significantly to the strengthening of overall profitability, maintaining a healthy EBITDA margin of 24.7% for the nine-month period.

Strategic Milestones and Global Ambitions

Divgi TorqTransfer Systems is not just celebrating past successes; it is actively charting an ambitious course for future growth through strategic initiatives and global expansion. A significant development is the securing of exclusive transfer case orders from Mahindra & Mahindra and Tata Motors for their respective pickup vehicle programs in the Indonesian market. Each OEM will export 35,000 units, with Divgi acting as the sole supplier for these 100% 4-wheel drive vehicles. This incremental order, with production commencing in CY26 and most volumes in FY27, provides strong medium-term visibility and validates Divgi's capability to support Indian OEMs in their global expansion.

Furthermore, the company is making substantial progress on a transfer case development for a leading Japanese OEM's flagship pickup platform. Initial prototypes have been successfully developed and demonstrated in a vehicle, with SOP expected in H1 FY28. This engagement is strategically crucial, as it marks a significant entry into a highly demanding ecosystem and validates Divgi's engineering and manufacturing prowess. To further strengthen its Japanese market presence, Divgi has signed an exclusive distribution agreement with Toyota Tsusho India Private Limited, a member of the Toyota Group, to market and distribute its torque management and transmission solutions to Japanese companies worldwide.

In the EV transmission segment, despite a slower-than-anticipated ramp-up due to OEM vehicle testing hiccups and market adoption challenges, Divgi has made meaningful product and capability advancements. The company is in the concluding phase of developing a new 120-kilowatt, 220 newton-meter torque capacity transmission for four models of a key customer, with SOP anticipated in April 2026. The strategic focus here is on diversifying across multiple platforms and customers to reduce program-level concentration risks and improve business stability. Divgi is also actively expanding its export footprint, having commenced supplies to new geographies like Portugal and Europe, enhancing diversification across markets and customers.

Future Outlook and Operational Excellence

Divgi's long-term growth strategy is underpinned by its commitment to technology-led innovation, customer diversity, and manufacturing excellence. The company is evaluating the feasibility of establishing a manufacturing footprint in the United States, with a preliminary conclusion expected by Q1 FY27. This move aims to deepen its global presence, enhance customer proximity, and capture growth opportunities in the diversified North American market. In the automatic transmission vertical, Divgi plans to conclude a technology demonstrator for one of its largest OEM customers by Q2 FY27, with economic analysis indicating significant cost savings and improved working capital efficiency through localization.

The company's management remains confident in achieving its long-term growth aspiration of 12-15% CAGR over five years, with FY20 as the base year. This confidence is supported by sustainable business strategies, a robust order book, and execution capabilities built consistently over the years. Divgi's philosophy of building capacities and capabilities slightly ahead of the curve enables it to attract large automobile OEMs and participate in high-value programs. The company's ability to cross-deploy assets across its four verticals (manual transmissions, 4-wheel drive systems, EV transmissions, and automatics) provides business resilience and diversity across its portfolio and geographies.

Divgi TorqTransfer Systems Limited is clearly in an exciting phase of growth, marked by record financial performance, strategic global expansion, and a relentless focus on innovation and operational excellence. The company's disciplined execution and forward-looking approach position it strongly to capitalize on evolving market opportunities and deliver sustained value to its stakeholders.