Tenneco Q2 VAR rises 32.2% as OEM wins add new segments

Tenneco reported Q2 FY'27 Value Added Revenue of Rs 1,522.9 crore, up 32.2% year on year, as higher volumes and new programme launches included entry into three-wheelers and compressed natural gas, or CNG, applications. The company also secured new passenger-vehicle suspension platforms and locally produced semi-active suspension business.

How did Tenneco perform in Q2 FY'27?

Tenneco’s Value Added Revenue, or VAR, rose 32.2% year on year to Rs 1,522.9 crore in Q2 FY'27, while revenue from operations increased 34.2% to Rs 1,718.3 crore. VAR excludes pass-through substrate costs and is Tenneco’s primary measure of underlying operating performance, margins and comparison between periods.

The quarterly increase reflected 25.4% volume growth and the ramp-up of new programmes. Tenneco reported industry volume growth of 26.0% in Q2 FY'27, meaning its volume growth was slightly below the growth rate across its served markets, while new launches also contributed to revenue growth.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 20.7% to Rs 261.6 crore in Q2 FY'27, but the EBITDA margin on VAR declined by 165 basis points year on year to 17.2%. Profit after tax, or PAT, grew 15.0% to Rs 173.4 crore, while its margin decreased by 170 basis points to 11.4%.

The PAT comparison includes a base-period item. Q2 FY'26 included Rs 6.7 crore of net-of-tax one-time interest income related to the Motocare entity sale; excluding that income, Tenneco said Q2 FY'27 PAT increased 20.4%.

Which new segments and platforms did Tenneco win?

Tenneco entered the three-wheeler segment by winning suspension business for an Indo-Korean joint venture, and it entered CNG through a cold-end assembly programme for a European original equipment manufacturer, or OEM. These awards extend its applications beyond its established passenger-vehicle and commercial-truck operations.

In suspension, Tenneco secured content on three new vehicle platforms with a leading Indo-Chinese joint venture. It also won two next-generation models from an existing Japanese passenger-vehicle OEM and introduced three platforms with a Vietnamese OEM, adding domestic and international programme activity.

Tenneco reported the start of production for a three-door Thar suspension programme under Da Vinci, which increased production volumes. It also supplied India’s first locally produced semi-active CVSAe suspension system, which the company cited as evidence of its advanced technology capability.

In Clean Air and powertrain applications, Tenneco introduced a hot-end commercial-vehicle exhaust programme for a leading Indian commercial-vehicle OEM. It also received a new spark-plug award from a European OEM, which it described as an expansion of its customer wallet share.

What do Tenneco’s market shares show?

Tenneco reported a 59% market share in Clean Air commercial trucks in H1 FY'27, compared with 58% in FY'26 and 57% in FY'25. Its passenger-vehicle shock absorbers and struts share was 55%, unchanged from FY'26 but higher than 52% in FY'25, according to the cited Crisil Report.

Passenger-vehicle Clean Air share was 18% in H1 FY'27, compared with 19% in both FY'25 and FY'26. The disclosed data therefore show gains over two fiscal years in commercial-truck Clean Air and passenger-vehicle suspension, while passenger-vehicle Clean Air was one percentage point lower than in the prior two years.

Tenneco linked its commercial-truck Clean Air and passenger-vehicle suspension positions to technology leadership and customer relationships. The presentation does not quantify revenue from the three-wheeler, CNG or individual new-platform awards announced in Q2 FY'27.

What does Tenneco’s order book indicate about revenue visibility?

Tenneco reported an incremental lifetime order book of about Rs 16,500 crore as of 30 September 2026, including about Rs 875 crore of export orders. Management said the total covers more than 100% of its FY2030 revenue target and supports a double-digit compound annual growth rate trajectory from FY'25 to FY'30.

The order book includes orders secured on OEM confirmation of volume and price that had not entered production as of 30 September 2026. Tenneco said the awards provide revenue visibility over approximately five to six years, rather than representing revenue already recorded in Q2 FY'27.

For H1 FY'27, VAR grew 25.3% to Rs 2,904.4 crore and volumes rose 20.7%, against industry volume growth of 21.4%. EBITDA increased 14.1% to Rs 508.5 crore, while its margin declined by 172 basis points year on year to 17.5%.

How is Tenneco supporting the new programme pipeline?

Tenneco said it is investing in capacity expansion, localisation and innovation, including a new West India Clean Air manufacturing facility with a planned investment of Rs 45 crore. The disclosed facility investment accompanies new commercial-vehicle exhaust and CNG cold-end assembly programmes.

Management said productivity improvements, commercial recovery actions and cost control substantially offset inflationary pressure linked to geopolitical developments in Q2 FY'27. It also cited its P3 framework, meaning People, Performance and Pride, as an operating mechanism for execution, accountability and continuous improvement.

Tenneco reported free cash flow equal to 50% of EBITDA in Q2 FY'27 and 69% in H1 FY'27, and said it remained net debt free in H1 FY'27. Return on capital employed was 94% in FY'26, compared with 57% in FY'25; the presentation did not provide an H1 FY'27 return on capital employed figure.

Conclusion

Tenneco’s Q2 FY'27 expansion combined 32.2% VAR growth with specific new applications in three-wheelers, CNG, commercial-vehicle exhaust and advanced suspension. Revenue and profit increased, but EBITDA margin declined to 17.2% from 18.8% a year earlier as costs and listed-company transition expenses affected profitability.

The next factors to watch are the conversion of the Rs 16,500 crore incremental lifetime order book into production over the stated five-to-six-year period, construction of the planned Rs 45 crore West India Clean Air facility, and management’s progress toward its FY2030 revenue target. The presentation does not disclose expected revenue or production timing for each three-wheeler, CNG and platform win.