Bonfiglioli Transmissions Q2 FY27 Earnings Call: Guides 15% Revenue CAGR to CY28, Record Quarter Across All Verticals

Record Quarter Across All Three Verticals in Maiden Listed Results

• Revenue up 30.2% YoY to Rs.6,602 million — the company's highest-ever quarterly revenue, with domestic growth of 23.8% and export growth of 46.2% (CFO Gautam Balaji).
• EBITDA rose 38% to Rs.1,289 million (19.5% margin) — net profit rose 38.2% to Rs.871 million (13.1% margin), attributed to efficiencies, localization, pricing, forex, cost savings and VAVA initiatives.
• Vertical growth in Q2 FY 2026-2027 — industrial automation +30.5%, off-highway mobility +54.9%, wind +8%; all three verticals posted record quarterly revenue.
• Nine-month CY26 revenue grew 22.8% to Rs.17,920 million — EBITDA margin of 19.7% and PAT margin of 13.1%; exports grew 40.4% and made up 30.6% of nine-month revenue.
• Fixed asset turnover of 6.05x for the nine months — 8.06x annualized as of 30 September 2026.
• Management noted the reported quarter was spoken of as "Q3 CY26" on the call, reflecting the calendar-year reporting convention used internally.

A "New Chapter": First Call Since Listing

• Maiden analyst call post-listing — hosted by Axis Capital, with Sonia Bonfiglioli (Promoter, Non-Executive Director), Kennedy V. Kaipalli (MD) and Gautam Balaji (Whole Time Director & CFO) participating.
• Bonfiglioli Group founded in 1956 in Bologna, Italy — Sonia Bonfiglioli said the India journey began in 1998, and the group localized the same machinery, products and technologies used in Europe rather than adopting local production standards.
• MD Kennedy V. Kaipalli called the listing "a new chapter" — reiterated a focus on profitable growth with significant investor returns and a long-term view; investors can route follow-ups via SGAE, the company's investor relations agency.
• Track record of 14.5% average growth from 2009 to 2025 — with no year of decline, including through COVID; growth was below 10% in each of the last three years.
• Bonfiglioli India contributed ~15% of group revenue and ~32% of group EBITDA in CY 2025 — the group has a presence in 80 countries (BONFROG).

Leadership Positions Across Industrial Automation, Mobility and Wind

• Nine-month CY26 revenue mix — industrial automation 42%, off-highway mobility 29% (also cited as 29.4%), wind 27% (also cited as 26.8%).
• Market share: ~25% in low/medium duty industrial automation gearboxes — ~32% in off-highway mobility drives, and more than 50% in wind drives among domestic manufacturers.
• Operating scale — over 1,000 OEM customers, more than 11,800 SKUs, ~35% of business from products introduced in the last three years (CY26 first half), and ~70% of materials sourced domestically from over 150 suppliers.
• Competitive set named by the MD — European players ACW, Nord and Premium in industrial automation; Commer, Dana and PNT in off-highway, across light/medium duty gearboxes in about 20 sectors.
• Global addressable market in CY25 cited at 14.7bn for industrial gearboxes — 4.6bn for off-highway drives and 1bn for wind turbine drives.
• Emerging applications — biogas, wastewater processing and recycling in India, which the company introduces "with agility" and says helps it grow faster than the market.

Off-Highway Programs Mature; Export Base Broadens Beyond the US

• Off-highway mobility revenue of roughly Rs.530 crore in 9M FY 2026-2027 — versus roughly Rs.370 crore a year earlier (cited by analyst Dhawan Shah of Asaccurate Advisors); program wins began in FY 2025-2026 and matured in FY 2026-2027.
• John Deere relationship expanding — started with one platform in FY 2025-2026; the company aims to extend across additional platforms to increase wallet share. Kaipalli declined to size the new mobility program opportunity, saying he did not have the figure prepared.
• 5% of 9M FY 2026-2027 business from new programs — around 14% from existing business, per Kaipalli.
• Exports to 18 countries; US share of exports fell from 58% to 48% in 9M FY 2026-2027 — Germany, the UK and Spain grew; exports to group entities were about 21% of exports.
• Supply-chain diversification tailwind — Kaipalli cited export opportunities from diversification away from China, with India playing a larger manufacturing role, supported by infrastructure built to meet global OEM quality, reliability and delivery requirements.

Structural Margin Gains, But Management Flags Tempering Ahead

• EBITDA margin rose from 15.5% in 2023 to 18.4% in 2025 — described as structural, driven by localization, productivity, scale and product mix; 18.5% in FY 2025-2026 and 19.7% for 9M FY 2026-2027.
• FY 2026-2027 margin gain partly non-recurring — reflected price increases against higher commodity prices (cost not yet fully passed through) and a forex benefit; Kaipalli expects margins to "temper down slightly" in coming quarters.
• 18.5% EBITDA margin ambition over FY 2027-2028 to FY 2028-2029 — management framed this as a two-year ambition/general trend, not a quarterly or annual target, and conservative because the FY 2026-2027 forex benefit (exports ~30.6%) will not repeat in FY 2027-2028.
• Capex of ~Rs.100 crore in FY 2026-2027 — Rs.78 crore invested up to September, driven by sales growth and debottlenecking; ~Rs.150 crore planned for FY 2027-2028; capex runs 3-4% of sales annually and is funded entirely through internal accruals, with no borrowing needed.
• Royalty to the parent is a fixed 6% on specified products — effective rate ~4.4-4.5% of sales, unchanged for many years; management said no change is planned, as any revision needs renewal and board approval (period unspecified).

Talegaon Heavy-Duty Build-Out; 20% CY26 Growth and 15% CAGR Guidance

• Heavy-duty gearbox entry via Talegaon, Pune — management corrected a media report: the 25-acre site is in Talegaon, Pune, not Tamil Nadu; seven acres are built, heavy-duty manufacturing to start in the first half of FY 2027-2028, with intent to complete in "one, one year time."
• Manur plant operations to move to Talegaon in the second half of 2028 — the Manur lease was renewed for 3 years with a 6-month notice period; management described the move as bringing operational synergy and cost advantage.
• Heavy duty to contribute meaningfully post CY 2028 — Kaipalli noted the segment is driven by its own demand cycles, which carry their own vulnerabilities.
• Guidance: ~20% revenue growth for CY26 — a prudent view after 22.8% growth in 9M FY 2026-2027, citing a larger base from the strongest quarter of the prior year and quarter-to-quarter variation in customer schedules.
• 15% revenue CAGR over CY26-28 — with an 18.5% EBITDA margin in the vicinity over CY26-28 as a goal for the period as a whole; Kaipalli declined to give segment-wise growth guidance underlying the medium-term 15% target.
• Wind: GE degrew ~30% in 9M FY 2026-2027 while other wind customers grew 22% — GE returned to growth in Q1 and Q2 of CY27 per Kaipalli, with its Q3 and Q4 still pending; domestic wind installations were ~6 GW in FY 2025-2026, expected ~8 GW in FY 2026-2027, with industry expectations of 8-10 GW in FY 2027-2028.
• Industry context cited by management — "government targeting 25% manufacturing share of GDP by 2035" under the National Manufacturing Mission (from 17%); union budget 2026-27 allocated Rs.12.2 lakh crore to infrastructure, up from Rs.2 lakh crore in financial year 2015; India installed ~6 GW of wind in FY 2025-2026 with a target of 100 GW by 2030.