Hi-Tech Gears gains traction on Rs 117.2 crore business wins

The Hi-Tech Gears says its India turnaround is gaining traction, with Rs 117.2 crore of annualised business won in FY25-26 and Q2 FY27 standalone operational revenue up 21.0% year on year to Rs 210.6 crore. Management attributes the revenue increase to volume growth across customer segments, while cost inflation continued to pressure margins.

What is driving Hi-Tech Gears' India turnaround?

Hi-Tech Gears says volume growth across all customer segments drove the third consecutive quarter of sequential and year-on-year revenue growth in Q2 FY27. Its standalone India business is in a consolidation phase, centred on machine throughput and labour productivity, after upfront spending on machine refurbishment and workforce stabilisation.

The operating programme had not removed all cost pressures by Q2 FY27. Hi-Tech Gears said inflation in piped natural gas (PNG), liquefied petroleum gas (LPG), industrial diesel and cutting-tool consumables raised conversion costs, while a government-mandated minimum-wage revision lifted manpower costs. The company said these pressures caused margin pressure despite higher volumes, although it described the bottom line as starting to stabilise.

Domestic demand remained intact through H1 FY27, according to Hi-Tech Gears, with healthy premium motorcycle and scooter demand across electric-vehicle (EV) and internal-combustion-engine (ICE) segments. Export demand was also improving through consistent orders from North American customers. A letter of intent came from a new customer described as a market leader in India’s premium-motorcycle segment, while requests for quotation (RFQs) remained active in two-wheeler and passenger-car segments.

How large are Hi-Tech Gears' new-business wins?

Hi-Tech Gears won about Rs 117.2 crore of annualised new business in FY25-26, up from about Rs 80.3 crore across FY23-25. The later-period total comprised Rs 86 crore from a current customer and Rs 31.2 crore from a new customer, compared with Rs 30.9 crore from existing customers and Rs 49.4 crore from new customers in FY23-25.

The mix changed as the FY25-26 awards were led by current customers rather than new accounts, and Hi-Tech Gears cited the inclusion of a new customer and a new platform. The company says programmes typically take about two to three years after start of production (SOP) to reach peak revenue. It also says all new programmes are being launched with limited balancing capital expenditure, rather than specifying a capex amount.

Hi-Tech Gears links the awards to a focus on premium and new segments while growing with existing customers. The presentation identifies its presence in motorcycles above 350 cubic centimetres (CC), including Royal Enfield and Harley Davidson X-440, and its entry into India’s passenger-car sport-utility vehicle segment through Mahindra & Mahindra’s Bolero and Thar. It also identifies BorgWarner and IFA within global passenger cars.

Did India revenue and profit improve in Q2 FY27?

Hi-Tech Gears' standalone operational revenue increased 21.0% year on year to Rs 210.6 crore in Q2 FY27 and rose 23.9% sequentially from Rs 170 crore in Q1 FY27. Operational earnings before interest, tax, depreciation and amortisation (EBITDA) rose 24.9% year on year to Rs 24.6 crore, while the EBITDA margin increased 36 basis points to 11.68% from 11.32% in Q2 FY26.

Standalone profit before tax rose 36.5% year on year to Rs 15.7 crore in Q2 FY27, and PAT increased 45.0% to Rs 11.6 crore. The PAT margin reached 5.51%, compared with 4.60% a year earlier and 3.65% in Q1 FY27. This quarter-on-quarter improvement occurred while management continued to report inflation-led conversion-cost pressure, showing that the reported revenue and profit gains coincided with, rather than eliminated, that constraint.

For H1 FY27, standalone operational income was Rs 380.6 crore, up 14.2% year on year, while EBITDA increased 8.6% to Rs 42.9 crore. The resulting EBITDA margin was 11.27%, below the 11.68% reported in Q2 FY27. H1 standalone profit before tax declined 0.8% year on year to Rs 24.2 crore, even as PAT rose 2.3% to Rs 17.8 crore.

What does the North American business add to the recovery?

Hi-Tech Gears says North American revenue increased both sequentially and year on year in Q2 FY27 as market demand stabilised. Management said customers were returning to normal ordering patterns after factoring geopolitical uncertainty into their planning, but did not disclose a separate North American revenue figure or growth rate.

The North American business had won additional work with two existing customers in Q2 FY26, and samples were being made for production part approval process (PPAP) approval. Hi-Tech Gears was also responding to multiple RFQs from existing North American customers. These steps identify potential future activity, but the presentation gives no award value, SOP date or revenue contribution for those RFQs and PPAP samples.

At the consolidated level, operational revenue rose 18.4% year on year to Rs 285 crore in Q2 FY27, and EBITDA increased 20.5% to Rs 33.5 crore. The consolidated EBITDA margin was 11.75%, versus 11.55% in Q2 FY26. Consolidated PAT rose 78.3% to Rs 10.7 crore, compared with Rs 6 crore a year earlier, while sequential revenue increased 19.9% from Rs 237.7 crore in Q1 FY27.

Conclusion

Hi-Tech Gears' reported turnaround evidence combines three elements: Q2 FY27 standalone revenue growth of 21.0%, improved quarterly standalone EBITDA and PAT margins, and Rs 117.2 crore of FY25-26 annualised new-business wins. The awards were more concentrated in current customers than the FY23-25 total, alongside passenger-car, premium-motorcycle and global passenger-car programme references. However, management still reported inflation in energy, consumables and wages as a constraint on conversion costs.

The next point to watch is the conversion of the Rs 117.2 crore annualised awards into sales, as Hi-Tech Gears says peak revenue normally arrives two to three years after SOP. Management’s disclosed milestones also include PPAP approval for North American samples, active RFQs in India and North America, and the benefit expected with a natural lag from machine refurbishment and labour-productivity investment. The presentation does not provide a timetable or value for those RFQs, approvals or operating-efficiency benefits.