Rane (Madras) Limited Q4 FY26: Steering-led growth and improving profitability

Rane (Madras) Limited reported a strong close to FY26, with higher revenue, improving operating performance, and a sharp rise in profit after tax. For FY26, the company reported consolidated revenue of Rs 3,878.6 crore, up 13.4% year on year. EBITDA rose 19.4% to Rs 355.6 crore, and EBITDA margin improved to 9.2%, up 46 basis points. PAT stood at Rs 107.5 crore, up 185.5%, reflecting a much stronger bottom line versus the prior year.

In Q4 FY26, consolidated revenue was Rs 1,051.7 crore, up 16.2% YoY. EBITDA increased 20.1% to Rs 99.4 crore, with margin at 9.5%, up 31 basis points. PAT came in at Rs 37.0 crore, reflecting a material improvement over the low base of Q4 FY25.

What drove Q4: steering strength, exports momentum

Q4 net sales increased to Rs 1,035.9 crore from Rs 893.3 crore in Q4 FY25. The company attributed the growth to higher offtake across domestic vehicle segments, a sharp increase in international sales, and higher reported aftermarket sales.

International customer sales grew 27% in Q4 FY26, supported by strong offtake of steering products. Domestic OE sales grew 11%, reflecting demand across segments. India aftermarket sales increased 16%, but management noted the reported growth is not comparable due to restructuring of the aftermarket product business. On a comparable basis, the company stated aftermarket sales grew 5%.

In Q4 FY26, steering and linkages remained the largest business, contributing 49% of sales, followed by aftermarket at 19%. Brake components and engine components contributed 13% each, while light metal castings contributed 6%.

Segment view: steering accelerates, others steady

Steering and linkages posted the strongest absolute growth. Sales in the segment increased to Rs 504 crore in Q4 FY26 from Rs 413 crore in Q4 FY25. The segment showed a steady rise through the year, supported by both domestic demand and exports.

Light metal castings reported sales of Rs 66 crore in Q4 FY26 compared with Rs 61 crore in Q4 FY25, with exports contributing meaningfully in the quarter. Engine components remained relatively stable at Rs 134 crore in Q4 FY26 versus Rs 129 crore in Q4 FY25. Brake components reported Rs 138 crore in Q4 FY26 compared with Rs 124 crore in Q4 FY25.

Aftermarket sales were Rs 194 crore in Q4 FY26 versus Rs 166 crore in Q4 FY25, but the company flagged comparability issues due to restructuring.

Market mix and exposure: India-led with meaningful exports

Rane (Madras) generated FY26 revenue of Rs 3,879 crore, with 57% coming from India OEM and OES, 16% from India aftermarket, and 27% from international OEM and aftermarket.

From a geographic perspective, FY26 revenue was split 73% India, 10% North America, 11% Europe, 4% South East Asia, and 2% rest of world. The company highlighted its footprint of 17 manufacturing plants, with 16 in India and one in Mexico, and stated it serves customers in more than 30 countries.

Within India OEM revenue, the mix remained skewed to passenger vehicles. The company reported India OEM revenue split as 55% passenger vehicle, 20% commercial vehicle, 14% tractors, 9% two and three wheelers, and 2% other applications.

Industry context: outperformance in CV, underperformance in PV and 2W

In Q4 FY26, the company compared its India OEM growth with industry growth across key segments. Passenger vehicle industry growth was 11% while the company grew 8%, which it attributed to lower offtake in served models. Commercial vehicle industry growth was 19% while the company grew 23%, supported by strong growth in served models.

Farm tractor industry growth was 37% while the company grew 32%, and management again attributed the gap to lower growth in served models. In two wheelers, the industry grew 21% while the company grew 10%, which the company attributed to lower offtake of brake components.

The market commentary in the presentation linked passenger vehicle strength to improved affordability, GST reductions, rising disposable incomes and lower financing costs. Commercial vehicles were supported by infrastructure activity, freight expansion, fleet utilization and last-mile demand. Tractor growth was attributed to government policies, favorable harvesting conditions and increasing mechanization, while two wheeler growth reflected rural demand, GST cuts and premiumization.

Execution markers: order wins, awards, and balance sheet improvement

The presentation included multiple operational updates. The company reported securing orders worth Rs 4.5 crore per annum from domestic commercial vehicle customers for steering and suspension components, and orders worth Rs 23 crore per annum from domestic passenger vehicle customers. It also reported orders worth Rs 5.3 crore per annum including Rs 3.3 crore per annum from international customers.

Rane (Madras) also listed several awards across facilities, including recognition at the ACMA Excellence Awards 2025 for exports and digitalization, as well as quality, safety, and ESG-related awards.

On the balance sheet, leverage improved during FY26. Net debt to equity stood at 0.94x in FY26, down 0.22x year on year. ROCE improved to 14.4%, up 303 basis points.

Takeaways from Q4 FY26

Rane (Madras) ended FY26 with stronger revenue growth, improved margins, and a healthier leverage position. Q4 performance was led by steering and linkages, supported by a strong international offtake, while other businesses were largely stable. The company’s India OEM growth showed clear strength in commercial vehicles, but underperformed the broader market in passenger vehicles and two wheelers, which management attributed to served-model dynamics and lower brake component offtake.

The key near-term variables implied by the presentation are whether the export momentum in steering sustains, whether the company can close the growth gap in PV and 2W within its served platforms, and how comparable growth in the aftermarket business tracks after restructuring-related distortions.