Carraro India Q2 Profit Rises 11% to Rs 351 Crore as Domestic Demand Drives Growth

Carraro India reported an 11% year-on-year increase in consolidated profit after tax (PAT) to Rs 351 crore for the second quarter of FY27, compared with Rs 317 crore in Q2 FY26. Total income rose 19% to Rs 705.8 crore from Rs 593.1 crore in the year-ago quarter.

However, profitability margins declined during the quarter, reflecting higher raw material, energy, transportation and conversion costs. EBITDA, including other income, increased 10% to Rs 65.2 crore, while its margin contracted to 9.2% from 10% a year earlier. PAT margin also declined to 5% from 5.3%.

For the first half of FY27, Carraro India reported total income of Rs 1,264.4 crore, up 16% from Rs 1,093 crore in H1 FY26. EBITDA increased 8% to Rs 123.2 crore, while PAT rose 9% to Rs 66.5 crore against Rs 60.8 crore in the corresponding period last year.

The slower growth in EBITDA and PAT relative to income indicates pressure on operating profitability. The company said higher input and conversion costs continued to affect margins, with the recovery of these additional costs from customers involving a time lag. It expects margin improvement to be gradual, supported by cost optimisation, productivity improvements and operational efficiencies.

Agricultural Equipment and Domestic Business Drive Revenue

Agricultural equipment remained the largest contributor to Carraro India's operational revenue in Q2 FY27, generating Rs 330 crore, an increase of 29% year-on-year. Construction equipment revenue rose 12% to Rs 297.9 crore, while the other business category grew 9% to Rs 68.6 crore.

For H1 FY27, agricultural equipment revenue increased 23% to Rs 585.9 crore, while construction equipment revenue grew 8% to Rs 524.3 crore. Revenue from other businesses rose 13% to Rs 130.9 crore.

Geographically, domestic revenue increased 33% to Rs 485.9 crore in Q2 FY27, while exports declined 4% to Rs 210.6 crore. For the first half, domestic revenue grew 30% to Rs 865.4 crore, whereas export revenue fell 9% to Rs 375.8 crore.

The company attributed domestic growth primarily to demand for agricultural four-wheel-drive (4WD) axles and improved activity in construction equipment. International markets, meanwhile, continued to face geopolitical and supply-chain challenges.

4WD Axle Demand and Construction Equipment Programmes

Carraro India said demand for domestic agricultural 4WD axles continued to outperform the overall tractor industry. The company is expanding capacity to address anticipated demand as the transition towards 4WD tractors progresses.

In construction equipment, the company continued ramping up its new tele-boom handler (TBH) axle range for an international OEM. Two customer programmes have entered series production, while another four to five programmes are undergoing field or prototype testing.

The domestic tele-boom handler market reached approximately 800 machines during H1 FY27, according to the company. Carraro India is also developing new TBH driveline projects with Indian OEMs.

Its backhoe loader (BHL) transmission and axle business recorded improved domestic demand, with festive-season activity supporting sales. The company also reported continued export activity in BHL drivelines through Indian OEMs.

In the higher-horsepower agricultural transmission segment, export markets have yet to gain momentum, affecting product offtake. However, programmes with domestic OEMs are progressing through field validation.

Engineering Services and Manufacturing Investments

Carraro India's engineering services business received a prototype order for an e-transmission project with Montra Electric, which will undergo field validation. The company also secured an additional engineering services assignment from a customer in western India.

During H1 FY27, Carraro India developed seven prototypes, of which one progressed to production, according to Managing Director Dr Balaji Gopalan.

The company incurred capital expenditure of Rs 20.4 crore during the first half of FY27. Construction of a new paint-shop building commenced during the period, while a side-drive sub-assembly line and a backlash machine were commissioned.

These additions are intended to increase portal axle manufacturing capacity and differential-support capacity on the 4WD line.

The investments follow capital expenditure of Rs 41.7 crore during FY26, which was directed towards new telescopic-handler axle production, high-performance agricultural transmissions and capacity expansion.

Carraro India said its revenue performance remained broadly aligned with its FY27 growth outlook. However, it expects margin recovery to take longer, with profitability improvement dependent on higher volumes, progressive recovery of additional costs from customers and operating efficiencies.