Auto ancillary stock jumps 13% on strong Q3 results; Company targets ₹1,500 Cr annual revenue

Synopsis: Shares of Divgi Torqtransfer Systems Ltd surged 13% after Q3 revenue jumped 73% to Rs. 90.6 crore, PAT rose 127%, and management outlined Rs. 1,500+ crore annual revenue potential across EV, exports, and core driveline businesses.

The shares of this company are specialised in crafting drivetrain systems and related components for a diverse array of vehicles, spanning passenger cars, utility vehicles, commercial vehicles are in the spotlight after it rose by 13% following a robust Q3 performance with revenue growth of 73 percent also sees Rs. 1,500+ crore annual revenue potential.

With a market capitalisation of Rs. 2,189 cr, the shares of Divgi Torqtransfer Systems Ltd were trading at Rs. 716 per share, jumping 13% in today’s market session, making a high of Rs. 735, up from its previous close of Rs. 652.30 per share. 

Q3 Results 

Revenue from operations rose by 73% from Rs. 52.5 cr to Rs. 90.6 cr. Total income increased 67% YoY to Rs. 96.3 cr from Rs. 57.5 cr, driven by strong growth in revenue from operations. Gross profit rose 61% YoY to Rs. 61.0 cr from Rs. 37.9 cr, though gross margin moderated slightly to 63.3% from 65.9%.

EBITDA grew 72% YoY to Rs. 23.4 cr from Rs. 13.6 cr, with EBITDA margin improving to 24.3% from 23.6%. Profit before tax more than doubled to Rs. 15.7 cr from Rs. 7.1 cr, while profit after tax surged 127% YoY to Rs. 11.8 cr from Rs. 5.2 cr. PAT margin expanded significantly to 12.2% compared to 9.1% in Q3 FY25.

Revenue from operations rose by 9% from Rs. 83 cr to Rs. 90.6 cr. Total income grew 9% QoQ from Rs. 88.3 cr to Rs. 96.3 cr, reflecting steady operational momentum. Gross profit increased in line with revenue to Rs. 61.0 cr from Rs. 55.9 cr, with gross margin remaining stable at 63.3%. 

EBITDA rose 6% QoQ to Rs. 23.4 cr from Rs. 22 cr, although EBITDA margin softened slightly to 24.3% from 24.9%. Profit before tax improved by 7% to Rs. 15.7 cr from Rs. 14.7 cr, while profit after tax increased 10% QoQ to Rs. 11.8 cr from Rs. 10.7 cr, maintaining a stable PAT margin of 12.2%.

Business Segment Highlights 

The Transfer Case segment posted robust, volume-driven growth, with volumes close to FY23 levels, reflecting a pickup in demand and rising penetration of 4WD systems. Performance was supported by higher offtake from key OEM customers and international programs, including the exclusive Indonesian pick-up program that offers strong medium-term visibility. Repeat institutional and defense orders continued to lend stability to the segment.

The E-gear Drive segment delivered a stable performance amid range-bound EV demand. The successful development of a 120kW, 220 Nm system across multiple customer platforms positions the business for gradual growth. The strategic focus remains on enhancing platform integration, diversifying products across customers, improving margins, and mitigating program concentration risks.

The Component Business remained the fastest-growing segment, registering ~117% YoY growth in 9MFY26, largely driven by exports. Export revenues achieved a run-rate of ~Rs. 19 crore per quarter, with exports accounting for ~17% of 9MFY26 revenue. The segment also strengthened its global presence by entering new geographies such as Portugal, progressing toward its medium-term export target of 20–25%.

Future Outlook 

The company’s EV Transmission business offers a significant growth opportunity, with BEV systems and components addressing a global market and an estimated annual revenue potential of ~Rs. 250 crore. The export segment, comprising transfer cases and synchronizers, presents an annual revenue potential of ~Rs. 200 crore. Continued expansion in international markets and growing acceptance of export components are expected to drive sustained growth.

The core portfolio including manual transmissions, automatic transmissions, and hybrid transmission solutions, represents the largest opportunity with an estimated annual revenue potential of ~Rs. 1,200 crore, underpinning long-term scale and stability. Together, these businesses provide a combined potential annual revenue opportunity of over Rs. 1,500 crore, supporting a strong long-term growth trajectory.

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