Rane Madras reports Q3 net loss as margins face headwinds

Rane (Madras) Limited (RML), a prominent manufacturer of steering and suspension systems, reported a consolidated net loss of ₹0.2 crore for the third quarter ended December 31, 2024, marking a sharp reversal from a profit of ₹9.1 crore in the same period last year.

The company's consolidated revenue remained relatively flat at ₹523.7 crore, showing a marginal increase of 0.2% compared to ₹522.4 crore in Q3FY24. However, the operational performance witnessed significant pressure, with EBITDA declining by 19% to ₹39.2 crore from ₹48.4 crore in the corresponding quarter. The EBITDA margin contracted by 178 basis points to 7.5%.

The deterioration in profitability was primarily attributed to one-time provisions, including charges for obsolete inventory, premium freight costs, and forex reinstatement losses on overseas investments. The company's performance was further impacted by a high base effect from the previous year, which had benefited from a one-off provision reversal in employee costs.

Analysis of the business mix reveals that Rane Madras maintains a diversified revenue stream, with the Indian OEM and OES segment contributing 55% of total sales, while international operations account for 30%, and the domestic aftermarket comprises 15% of revenues. In terms of vehicle segments, passenger vehicles dominate with a 71% share, followed by commercial vehicles at 20% and farm tractors at 9%.

Looking ahead, while the company faces near-term challenges in maintaining profitability, its balanced portfolio across domestic and international markets, coupled with a strong presence across OEM and aftermarket segments, positions it to navigate through the current market dynamics.

The results were announced at the company's headquarters in Chennai, where Rane (Madras) continues to strengthen its position as a key supplier to major automotive manufacturers in India and abroad.