Kross Limited: FY26 Ends Strong, as New Capacity and Products Line Up for FY27

Kross Limited closed FY26 with a stronger second half and a sharp Q4 finish. Revenue from operations for FY26 stood at INR 673.2 crore, up 8.5% year on year. EBITDA increased to INR 87.9 crore, translating into a stable EBITDA margin of 13.1%. Profit after tax rose to INR 55.2 crore, with the PAT margin improving to 8.2%.

The quarterly picture was more upbeat. In Q4 FY26, revenue from operations grew 21.9% YoY to INR 225.4 crore. EBITDA expanded 25.3% YoY to INR 33.6 crore and EBITDA margin improved to 14.9%. PAT came in at INR 22.4 crore with a PAT margin of 10.0%. Management described Q4 as operationally challenging due to commodity and consumable inflation and LPG shortages linked to geopolitical disruption, but also emphasized that demand across OEMs remained promising.

A Two-Speed Year: H2 Recovery Drives the Finish

In the earnings call, management noted that despite a slow H1, the company accelerated meaningfully in H2. H2 revenue was stated to be 49.2% higher than H1, helped by a recovery in the commercial vehicle cycle and what management called GST rationalization benefits.

Segmentally, Kross highlighted momentum across three areas. In the M and CV segment, key OEMs such as Tata Motors and Ashok Leyland reported strong volumes in Q4 and April 2026, and management pointed to healthy order books going into FY27. In the trailer segment, Kross cited noticeable volume growth driven by adding new fabricators and deeper penetration. In tractor and agri, the company reported healthy double-digit growth in FY26 and reiterated its aim to increase this segment’s contribution to around 15% of total revenue over the next two years.

Exports remained small but strategically important. Management stated exports were about 4% of FY26 revenue and referenced secured orders from a European Tier-1 player. The company continues to talk about building exports to around 8% of revenue over the next two years.

Financial Snapshot: Q4 and FY26

A notable improvement in FY26 was at the gross margin line. Gross profit margin expanded to 45.7% in FY26 from 43.0% in FY25. Finance costs also reduced to INR 8.1 crore in FY26 from INR 12.3 crore in FY25.

Revenue Mix: Trailer Systems and Components

Kross provided revenue mix disclosures in multiple places. For FY26, the company said trailer axles and suspension assembly contributed 42.61% of revenue, while the components business contributed 57.39%. The quarterly mix in Q4 FY26 tilted slightly more towards trailer systems at 45.2%.

In a separate FY26 product-wise revenue mix, Kross disclosed that trailer axles and suspensions were 42.6% and commercial vehicle components were 43.0%. Tractor components accounted for 9.5%, exports 3.6%, and others 1.4%. The mix indicates that the company’s core continues to be trailer axles and suspensions plus commercial vehicle components, with tractor and exports positioned as growth levers.

The Strategy Layer: Extrusion, Tipping Jacks, and Backward Integration

Kross’s near-term narrative is closely tied to new capacity and product additions.

The axle beam extrusion plant is the most prominent step-change initiative. The company stated that it commissioned the plant on February 27, 2026, with production trials running. It disclosed an investment of INR 25 crore and an axle beam capacity increase to 7,500 units per month. Management positioned the move as a shift from fabricated to extruded technology with lower material cost, lighter weight, and better technical performance that could improve tyre life. It also highlighted that EBITDA margins are expected to improve significantly above 50% utilization.

Tipping jacks represent a strategic entry into the trailer ecosystem beyond axles and suspensions. Kross stated the facility has been commissioned and products launched, with positive initial feedback. The company cited OEM demand of around 7,000 units per month and a ramp plan to reach around 250 to 300 units by the end of Q1 FY27 and 500 units by Q3 FY27. During the concall, management added that it sold around 75 to 80 kits in Q4 as part of the validation cycle.

The largest capex program is the seamless tube plant. Kross disclosed a proposed capacity of 120,000 tons, planned investment of around INR 167 crore, and an 18-month timeline, funded through a mix of debt and internal accruals. It highlighted captive tube requirements for trailer axle and parts manufacturing, with surplus capacity aimed at external demand including Oil and Gas. In the concall, management stated that civil construction is complete and indicated the project is planned for completion around Q4 of FY27, while also noting that revenue contribution is expected from FY28 after in-house consumption stabilizes.

Another meaningful capacity expansion is the foundry high-pressure moulding line, which management said is targeted for completion by September 2026 and intended to double casting capacity. The company is also upgrading axle shaft production using robotic press forging, with management indicating readiness to supply rear axle shafts by September 2026.

Margins and Near-Term Operating Questions

A key Q&A theme was the near-term impact of input cost inflation. Management acknowledged commodity and consumables inflation, including steel price increases under discussion with OEMs and a surge in LPG costs. It explained that in OEM-linked businesses, settlements are typically retrospective but delayed by roughly a quarter. In the trailer axle and suspension business, where pricing is market-driven, the company stated it had taken around a 5% price hike, but also noted competitive constraints as it cannot price materially above the market leader.

On margin outlook, management said it is looking at an EBITDA margin range of 14% to 15% in coming quarters, while also flagging that Q1 could see some temporary pressure until settlements and pass-throughs catch up.

What to Watch in FY27

Kross enters FY27 with a visible execution agenda and improving end-market demand, particularly in M and CV and the trailer segment. The practical questions for investors are less about intent and more about delivery.

First, the extrusion plant is already commissioned, but the key will be ramping utilization and translating the stated cost and margin benefits into reported numbers. Second, tipping jacks will need to move beyond early validation into higher monthly run rates to become financially meaningful. Third, the seamless tube project is large and multi-year. It is strategically important for backward integration and import substitution, but management has already indicated that meaningful revenue contribution will start only from FY28.

Kross’s FY26 showed resilience, steady profitability improvement, and a stronger second-half momentum. FY27 will largely be a test of how quickly new capacity and new products can scale, while managing near-term input volatility and the typical seasonality in commercial vehicles.