Kross Ltd Q1 FY27 Earnings Call — Analysis (NSE: KROSS)
Kross reports highest-ever Q1 revenue at ₹184.3 Cr (+32% YoY), EBITDA margin expands to 12.23%, and capacity ramp-up plans on track, with exports up 45% YoY.
The take
Q1FY27 Revenue ₹184.3 Cr ( +32.3% YoY ) . New guidance — FY27 export revenue growth 40%, 45% . New story: Backward integration & self-reliance .
Results
Q1 FY27 revenue ₹184.3 Cr (+32.3% YoY), EBITDA ₹22.55 Cr (+39.5% YoY, margin 12.23% +63 bps), PAT ₹13.31 Cr (+24.4% YoY).
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Revenue | ₹184.3 Cr | +32.3% | yoy · Q1FY27 · vs Q1FY26 |
| EBITDA | ₹22.55 Cr | +39.5% | yoy · Q1FY27 · vs Q1FY26 |
| EBITDA Margin | 12.23% | +63 bps | yoy · Q1FY27 · vs Q1FY26 |
| Profit After Tax | ₹13.31 Cr | +24.4% | yoy · Q1FY27 · vs Q1FY26 |
| PAT Margin | 7.2% | point_in_time · Q1FY27 · Q1FY27 | |
| Axle Volumes | 9,500 units | +30% | yoy · Q1FY27 · vs Q1FY26 |
| Trailer/axle/suspension/tipping Revenue Share | 41% | point_in_time · Q1FY27 · of total revenue |
Guidance
Management guides sequential margin expansion with realisation of steel and conversion cost pass-through, and targets exports contributing at least 8% of revenue within two years.
What management committed to
- Kross expects export revenue growth of 40-45% year-on-year for FY27. — 40%, 45%, FY27
- Kross targets exports contributing at least 8% of total revenue within the next two years. — at least 8%, FY28
- [Kross] expects to secure order books from [the new European tier-1 supplier] starting H2 FY27. — Q3-Q4FY27
- Kross expects to commission its seamless tube facility and begin production trials by the end of Q4 FY27. — Q4FY27
- Kross expects its high-pressure mold line for the foundry to start in Q3 FY27, doubling foundry capacity. — doubling foundry capacity, Q3FY27
- [Kross] expects to commission the axle shaft production facility using material gathering and press forging technology by September 2026. — Q2FY27
- Kross expects tipping jack capacity utilization to reach 65-70% by Q4 FY27. — 65% to 70%, Q4FY27
- Kross plans to implement a further price increase of 1-2% on its trailer business. — at least another 1% or 2% increase further
Key themes
Capacity expansion and backward integration driving growth
How the narrative shifted
- CV industry recovery from H2FY27: Management sees strong CV demand from September onward, supported by OEM schedules, Parivartan scheme, and healthy order books.
- Backward integration & self-reliance: Extrusion line, seamless tube, and casting expansions are positioned to improve margins, reduce imports, and provide first-mover advantage.
- Export diversification and new orders: Exports grew 45% YoY; new European tier-1 orders under validation, targeting 8% revenue share in two years as a hedge against domestic cycles.
- Sequential margin recovery through pass-through: Steel and conversion cost pass-through settlements expected to lift margins from Q2 onward, with price hikes already partially executed.
Operational commentary
- Extrusion line commissioned and extruded axle beam in production; first-in-India technology expected to boost trailer axle orders.
- Seamless tube facility on track; piercing mill received, sizing/straightening mills on high seas; production trials targeted by FY27-end.
- Tipping jacks ramp-up: 226 units sold Q1, capacity 800/month, utilisation expected to reach 65-70% by Q4FY27.
- High-pressure mold line for foundry expected to start in Q3FY27, doubling casting capacity.
- Axle shaft production facility using material gathering and press forging on track for commissioning by September 2026 (Q2FY27).
- Exports grew 45% YoY; European tier-1 supplier orders under validation, order inflow from H2FY27 expected.
- CV industry outlook positive: OEMs indicating strong volume schedules from September 2026 onwards, with healthy order books.
- Parivartan scheme (effective Oct 2026) banning BS4 vehicles in Delhi-NCR expected to support CV replacement demand.
- Trailer business took 3-5% price hike from 1 April 2026; further 1-2% increase planned to pass through input cost inflation.
- Forging and casting capacities adequate to support ramp-up; operating at ~70% utilisation post-IPO capex.
Analyst Q&A
Q. What caused the decline in revenue from top five customers from ₹409 Cr in FY24 to ₹379 Cr in FY26?
Management attributed it to diversification across segments, noting the top five customer percentage fell from ~60-63% to ~58-59%, and stated no business was lost, but could not confirm the exact revenue figures and said they would check.
Q. How are cost pressures evolving and have OEM settlements been finalised to protect margins?
Kunal Rai explained that a steel price pass-through of ₹4,700/tonne was given retrospectively from mid-July, tractor industry has settled a conversion cost increase retrospective from April, and CV industry settlement is imminent; margins to improve sequentially.
Q. What is driving 34% YoY growth in trailer axles and suspension versus single-digit industry growth?
Sumeet Rai attributed it to spillover of strong orders from Q4 FY26 that were previously capped by capacity, and noted market share is assessed over longer periods.
Q. Will more capacity expansion be needed, and how will debt look with seamless tube capex?
Kunal Rai said IPO-funded forging and casting expansions are sufficient for the ramp-up, no further capex required there; seamless tube is funded by a ₹100 Cr term loan that is only drawn as machines arrive, and no additional debt is planned for the existing business.
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