Carraro India Q1 profit rises 8 per cent as domestic demand drives growth

PUNE: Carraro India has put its best foot forward in FY27, with strong domestic demand helping the company navigate a tougher export environment and rising input costs.

Carraro India Limited reported a 12 per cent year-on-year increase in consolidated total income to Rs 558.7 crore for the quarter ended 30 June 2026. EBITDA, including other income, rose 6 per cent to Rs 57.9 crore, while profit after tax increased 8 per cent to Rs 31.4 crore.

Revenue from operations grew 10 per cent to Rs 544.7 crore during the quarter, compared with Rs 494.9 crore in Q1 FY26. EBITDA margin, however, narrowed to 10.4 per cent from 11 per cent, while PAT margin stood at 5.6 per cent against 5.8 per cent a year earlier.

The quarter’s growth was largely powered by the domestic market. Domestic revenue climbed 26 per cent year on year to Rs 379.5 crore, while exports fell 14 per cent to Rs 165.2 crore as geopolitical uncertainty and uneven demand across overseas markets weighed on business.

The agricultural equipment business remained the biggest contributor, with revenue rising 15 per cent to Rs 255.9 crore from Rs 221.9 crore in the year-ago period.

Demand for four-wheel-drive tractor axles continued to strengthen, helped by GST reforms that have narrowed the price gap between 4WD and 2WD tractors. Carraro said the shift towards 4WD models is accelerating and it is expanding capacity to cater to the expected increase in demand.

The construction equipment business also grew, although at a more measured pace. Revenue increased 4 per cent to Rs 226.4 crore.

The company continued to ramp up its new range of tele-boom handler axles for a major international original equipment manufacturer, with export programmes progressing as planned. New tele-boom handler axle projects with domestic customers, including Indian operations of global OEMs, are also moving ahead.

Carraro’s backhoe loader business delivered a stronger performance than the wider market. Sales of backhoe loader drivelines to Indian OEMs increased around 18 per cent year on year, compared with approximately 14 per cent growth in overall backhoe loader sales by Indian OEMs.

Carraro’s engineering services business also picked up momentum during the quarter, with enquiries increasing for higher-horsepower and more advanced technology configurations.

Its Rs 17.5 crore e-transmission engineering project with Montra Electric is progressing, with the company receiving a prototype order for field validation.

Engineering assignments worth around Rs 3.3 crore that were under discussion at the end of the quarter were subsequently finalised in July. Discussions with another prospective customer are also progressing, giving the company a potential additional growth avenue.

The higher-horsepower agricultural transmission business recorded another important milestone, with series production for a Turkish customer beginning during Q1 FY27. A separate programme for an Indian customer is progressing towards start of production in FY28.

While domestic demand provided a strong cushion, overseas markets remained challenging.

Carraro said geopolitical disruptions and uneven demand across key international markets affected exports during the quarter. Higher energy and raw-material costs also put pressure on margins, while labour availability constraints added to the operating challenges.

Despite these pressures, disciplined cost management and execution efficiencies helped the company maintain growth in absolute EBITDA and PAT.

The gears business, meanwhile, remained subdued. Carraro is working to strengthen the portfolio and expects the initiatives to support a gradual improvement in the coming quarters.

It has also secured a nomination from a major OEM for bull gears, with an estimated annual business opportunity of around Rs 15 crore from FY28. Two additional customers and projects are under development.

Carraro is continuing to invest in capacity to meet anticipated demand.

During the quarter, construction of a new paint-shop building began. The company also commissioned a side-drive sub-assembly line and a backlash machine to increase Portal axle capacity and strengthen differential-support capacity for its 4WD axle business.

During FY26, Carraro deployed Rs 41.7 crore towards new telescopic-handler axle production, high-performance agricultural transmissions and capacity expansion.

Commenting on the results, Carraro India Limited managing director Balaji Gopalan said the company had made a resilient start to FY27, with domestic revenue growth helping offset weakness in exports.

Gopalan said the company’s agriculture business continued to benefit from the shift towards 4WD tractors following GST reforms, while the construction equipment business was supported by the ramp-up of tele-boom handler programmes and stronger backhoe loader driveline sales.

He also pointed to the progress in engineering services, higher-horsepower transmission programmes and manufacturing capacity as signs of growing customer confidence in Carraro’s technology and production capabilities.

Looking ahead, the company expects uncertain global conditions to persist, but sees stronger domestic demand, recovering supply chains, new programme ramp-ups and capacity additions supporting growth through FY27.

Carraro’s near-term challenge will be turning that healthy domestic momentum into better margins. With utilisation levels expected to rise and cost absorption to improve, the company is betting that operational efficiency will provide the next leg of its growth story.