Kheria Autocomp Limited’s Gujarat revenue concentration reaches 99.96%

Kheria Autocomp Limited generated 99.96% of revenue from operations from Gujarat-based customers in the year ended March 31, 2026, while its sole operating manufacturing base is in Ahmedabad and its proposed new facility is at Sanand, Gujarat. A state-specific disruption could therefore affect both customer demand and production capacity.

How concentrated is Kheria Autocomp’s revenue in Gujarat?

Kheria Autocomp’s revenue is almost entirely generated from Gujarat customers, and that concentration increased modestly over the three reported financial years. Gujarat-based customers accounted for 99.96% of revenue from operations in fiscal 2026, compared with 99.92% in fiscal 2025 and 99.88% in fiscal 2024. Customers in all other states collectively contributed less than 1% in each year.

The Gujarat share rose by 0.08 percentage points between fiscal 2024 and fiscal 2026, meaning the already small contribution from outside the state did not become a meaningful offset. Kheria Autocomp attributes the pattern to Gujarat’s automotive manufacturing and supplier cluster, where key customers, including original equipment manufacturers (OEMs) and Tier-I suppliers, operate facilities. OEMs assemble and market vehicles, while Tier-I suppliers supply directly to OEMs.

Why does Gujarat concentration also affect Kheria Autocomp’s output?

Kheria Autocomp’s Gujarat concentration extends to output because its current manufacturing base is in Ahmedabad and its planned capacity expansion is at Sanand, also in Gujarat. The company had 30 injection moulding machines at its manufacturing facility as of the prospectus date, with capacities from 120 tons to 1,700 tons, alongside robotic systems and automated assembly lines.

The Sanand project adds capacity within the same state rather than establishing a manufacturing location elsewhere. Kheria Autocomp had received Gujarat Industrial Development Corporation drawing approval and Gujarat Pollution Control Board consent to establish, but had not applied for a factory licence, consent to operate, fire no-objection certificate or stability certificate. The company says delays in those permissions could defer commercial production and increase costs through changes in equipment, labour, interest rates, foreign exchange rates or regulations.

A Gujarat-specific event could consequently affect two parts of the operating model at once. Kheria Autocomp identifies economic, political, regulatory, labour-related and environmental developments, logistics disruptions and natural calamities in Gujarat as factors that could affect operations, capacity utilisation and financial performance. The stated exposure is compounded if such an event also reduces procurement by customers located in the same state.

What makes proximity to Gujarat customers important?

Kheria Autocomp relies on proximity to customer plants because automotive component supply is tied to customer-specific production schedules and Just-in-Time delivery. Just-in-Time is an inventory and production arrangement in which components are supplied close to the time they are needed for assembly. The company says component manufacturers generally locate supply near customer plants to optimise logistics and meet delivery requirements.

Kheria Autocomp manufactures plastic injection moulding sub-assemblies primarily to designs and specifications supplied by Tier-I vendors. A disruption to transport, labour availability or local supply chains can therefore interrupt deliveries even where demand remains intact. The prospectus identifies reduced capacity utilisation, inventory build-up and pressure on margins as potential consequences when OEM production schedules or Tier-I procurement change.

Customer concentration narrows the number of relationships supporting this geographically concentrated revenue. Kheria Autocomp’s top five customers contributed 97.32% of fiscal 2026 revenue from operations, compared with 97.43% in fiscal 2025 and 98.65% in fiscal 2024. Its top 10 customers contributed 99.95% in fiscal 2026, showing that revenue was concentrated both by location and among a limited customer group.

Which supply-chain factors could amplify a Gujarat disruption?

Kheria Autocomp’s customer-approved sourcing process could make a production interruption harder to manage because it has limited ability to change raw-material vendors. Customers determine the required quality, colour, grade and other features of plastic resins, and the company procures raw materials only from customer-approved vendors. It must also maintain batch records used by customers to identify and approve product manufacturing.

The top-10 supplier share declined by 9.93 percentage points from fiscal 2024 to fiscal 2026, but approved-vendor restrictions remained in place. Kheria Autocomp says shortages, transportation delays or unavailability of particular resin grades and colours can disrupt production schedules, result in idle machine time and delay customer supplies. The largest supplier accounted for 24.64% of fiscal 2026 raw materials consumed.

Raw materials consumed represented 67.70% of revenue from operations in fiscal 2026, up from 67.10% in fiscal 2025 and 63.74% in fiscal 2024. Kheria Autocomp says its pricing arrangements generally factor in raw-material price changes, reducing direct exposure to price volatility. However, supply delays, off-specification materials and working-capital mismatches can still affect manufacturing schedules and delivery commitments.

What would reduce Kheria Autocomp’s Gujarat concentration?

Kheria Autocomp would need to diversify customers outside Gujarat, establish manufacturing capacity outside Gujarat, or do both, for the regional concentration to decline materially. The company states that an inability to diversify its customer base outside Gujarat in a timely manner, or a decline in demand from Gujarat customers, could materially affect its business, financial condition and results of operations. The Sanand facility, if commissioned, would not by itself change the state concentration.

The expansion also depends on implementation steps beyond regulatory approvals. Kheria Autocomp proposes to use Rs 39.9569 crore of issue proceeds for capital expenditure, including plant and machinery for the new facility, and had placed orders for certain machinery as of the prospectus date. Delays in procurement, delivery or installation could postpone commissioning, while the expected capacity utilisation also depends on securing customer orders for the new facility.

Conclusion

Kheria Autocomp’s Gujarat concentration is operationally material because 99.96% of fiscal 2026 revenue came from customers in the state while its existing production base and planned expansion remain there. The top five customers generated 97.32% of fiscal 2026 revenue, and customer-approved raw-material sourcing further limits flexibility when supply chains or logistics are disrupted.

The next disclosed matter to watch is the Sanand expansion’s remaining approvals, including the factory licence, consent to operate, fire no-objection certificate and stability certificate. Machinery delivery and installation, together with customer orders needed to utilise the proposed capacity, will determine whether the project is commissioned on schedule without changing the underlying Gujarat concentration.