Akar Auto Industries Ltd (530621)
Latest quarterly results (Q1 FY27)
In its latest reported quarter, Q1 FY27, Akar Auto's revenue was ₹78.1 Cr (-13.6% year on year, -1.5% on the previous quarter), and net profit ₹0.5 Cr (-74.1% year on year); the operating margin was 7.4%.
| Q1 FY27 (₹ Cr) | Value | YoY vs Q1 FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹78.1 | -13.6% | -1.5% |
| Operating profit | ₹5.8 | -10.0% | +3.6% |
| Net profit | ₹0.5 | -74.1% | from loss |
| EPS (₹) | 0.44 | -74.0% | from loss |
| Operating margin | 7.4% | — | — |
📢 Recent Corporate Announcements
Akar Auto Industries has addressed a non-compliance notice from BSE regarding the delayed appointment of a Woman Director under Regulation 17(1) of SEBI LODR. The company stated the delay was due to the time required for candidate selection but confirmed that the appointment has now been completed. An application for a waiver of the associated fine is currently pending with the Stock Exchange. Given the company's thin TTM PAT of ₹1 Cr, regulatory penalties could have a disproportionate impact on the bottom line.
- BSE issued a non-compliance notice via email on 27.05.2026 regarding the board composition.
- Company has now appointed a Woman Director to comply with SEBI LODR Regulation 17(1).
- A waiver application for the penalty is currently under process with the Stock Exchange as of 12.08.2026.
- Company reported a low TTM PAT of ₹1 Cr against a TTM Revenue of ₹341 Cr.
- Promoter holding remains stable at 73.06% as of June 2026.
Akar Auto Industries has recommended a dividend of Rs 0.30 per share (6% of face value) for the financial year 2025-26. This follows a fiscal year where the company reported a net profit of Rs 1.0 crore, down from Rs 6.0 crore in the previous year. The total estimated payout is approximately Rs 0.32 crore, representing a payout ratio of roughly 32% of FY26 profits. The dividend is subject to shareholder approval at the Annual General Meeting scheduled for September 29, 2026.
- Recommended dividend of Rs 0.30 per equity share on a face value of Rs 5.00
- Dividend rate fixed at 6% for the full financial year 2025-26
- 37th Annual General Meeting (AGM) to be held on September 29, 2026, via video conferencing
- Proposed re-appointment of M/s Singh Mundada & Associates as Statutory Auditors for a 5-year term
- Board meeting concluded at 4:20 P.M. after approving Q1 FY27 unaudited results
Akar Auto Industries has recommended a 6% final dividend (Rs 0.30 per share) for FY26 alongside approving its Q1 FY27 financial results. The company is navigating a period of thin profitability, with a TTM PAT of only Rs 1 Cr on a revenue base of Rs 341 Cr. Leverage remains a concern with a debt-to-equity ratio of 1.86. The 37th Annual General Meeting is scheduled for September 29, 2026, to finalize these approvals and the re-appointment of statutory auditors.
- Recommended a final dividend of Rs 0.30 per share (6% of Rs 5 face value) for FY26.
- 37th Annual General Meeting (AGM) scheduled for September 29, 2026.
- Statutory Auditors re-appointed for a second consecutive 5-year term until the 42nd AGM.
- TTM Revenue stands at Rs 341 Cr against a market capitalization of Rs 124 Cr.
- Company maintains a high debt level of Rs 93 Cr relative to its Rs 50 Cr net worth.
Akar Auto Industries has approved its unaudited financial results for the quarter ended June 30, 2026. The Board recommended a dividend of Rs 0.30 per share (6% of face value) for the financial year 2025-26, which is modest given the company's thin TTM net profit of Rs 1 crore. Additionally, the company has proposed the re-appointment of its statutory auditors for a second five-year term. The 37th Annual General Meeting (AGM) is scheduled for September 29, 2026, where these proposals will be put to shareholder vote.
- Recommended a dividend of Rs 0.30 per equity share (6% of Rs 5 face value) for FY 2025-26
- Scheduled the 37th Annual General Meeting for September 29, 2026
- Proposed re-appointment of M/s Singh Mundada & Associates as Statutory Auditors for a 5-year term
- Board meeting concluded after 3 hours and 50 minutes of deliberation (12:30 PM to 4:20 PM)
- Approved unaudited financial results for the quarter ended June 30, 2026
Akar Auto Industries has scheduled a board meeting on August 12, 2026, to approve the unaudited financial results for the quarter ended June 30, 2026. Additionally, the board will consider recommending a final dividend for the fiscal year ended March 31, 2026. This comes after a weak FY26 where the company reported a net profit of just ₹1.0 crore on ₹341 crore revenue, with losses in the last two consecutive quarters. The trading window for designated persons remains closed until August 14, 2026.
- Board meeting scheduled for August 12, 2026, to approve Q1 FY27 results.
- Consideration of a final dividend for the financial year ended March 31, 2026.
- Trading window closed from July 1, 2026, to August 14, 2026.
- Company reported a net loss of ₹0.49 crore in the most recent quarter (March 2026).
Financial Performance
Revenue Growth by Segment
Total Operating Income grew 0.896% to INR 377.17 Cr in FY25 from INR 373.82 Cr in FY24. Growth was supported by higher production volumes in passenger vehicle and two-wheeler segments, offsetting a 1.2% decline in domestic commercial vehicle sales.
Geographic Revenue Split
Domestic sales account for approximately 80% of revenue, while exports contribute ~20% (INR 74.76 Cr in FY24). Export markets include USA, Netherlands, Germany, South Africa, Canada, Italy, Saudi Arabia, UK, Tanzania, Vietnam, Hungary, and Poland.
Profitability Margins
Gross margins are supported by raw material pass-through arrangements with OEMs. Operating Profit Margin improved to 5.84% in FY25 from 5.37% in FY24. Net Profit Margin increased to 1.71% (INR 6.46 Cr) in FY25 from 1.47% (INR 5.49 Cr) in FY24.
EBITDA Margin
EBITDA margin expanded to 7.06% in FY25 from 6.39% in FY24. Absolute EBITDA grew 11.4% YoY to INR 26.63 Cr, driven by efficient cost management and stability in raw material costs.
Capital Expenditure
The company is undertaking ongoing capacity expansion and solar power projects to enhance cost efficiency. Total debt increased slightly to INR 74.83 Cr in FY25 to support these initiatives.
Credit Rating & Borrowing
Ratings upgraded in November 2025 to IVR BBB/Stable (Long Term) and IVR A3+ (Short Term) from IVR BBB-/Stable and IVR A3. Borrowing includes term loans of INR 13.26 Cr and cash credit limits of INR 33.75 Cr.
Operational Drivers
Raw Materials
Steel is the primary raw material. The company sources 16.37% of its total steel requirement from group company RL Steels and Energy Limited.
Import Sources
Raw materials are primarily sourced domestically from Maharashtra (Aurangabad) to minimize logistics costs.
Key Suppliers
RL Steels and Energy Limited is a key supplier, providing strategic proximity (a few kilometers from the manufacturing unit) and quality control.
Capacity Expansion
Current installed capacity is 36,840 MTPA as of August 2025, up from 34,300 MTPA in 2024.
Raw Material Costs
Raw material costs are managed through pass-through arrangements with OEMs. Sourcing from group companies leads to significant savings in transportation costs.
Manufacturing Efficiency
Manufacturing base in Aurangabad provides a strategic locational advantage over peers in Gujarat and Punjab, enabling lower logistics costs for southern and western India markets.
Logistics & Distribution
Strategic location in Maharashtra enables better access to major auto OEMs and distributors across India.
Strategic Growth
Growth Strategy
Growth will be driven by the reduction in GST rates on commercial vehicles from 28% to 18% (effective Sept 2025), capacity expansion, and increased demand for leaf springs and forging products in secondary markets.
Products & Services
Precision engineered forging components, hand tools, tool kits, and leaf springs for auto and non-auto OEMs.
Brand Portfolio
Akar Auto Industries Limited (AAIL).
New Products/Services
Expansion of value-added product offerings in the European Union and advanced technology components for the EV segment.
Market Expansion
Targeting expansion in the European Union and increasing penetration in secondary markets for toolkits following GST rate cuts.
Strategic Alliances
Maintains a strategic sourcing arrangement with group company RL Steels and Energy Limited for 16.37% of steel requirements.
External Factors
Industry Trends
The industry is shifting toward EV-aligned components and advanced technologies. The CV segment is expected to recover following the GST reduction to 18%.
Competitive Landscape
Intense competition from both domestic and international automotive ancillary players exerts continuous pressure on margins.
Competitive Moat
Moat is built on long-standing (30+ years) relationships with Tier-1 OEMs and locational advantages in Aurangabad. Sustainability is supported by backward integration into solar power.
Macro Economic Sensitivity
Highly sensitive to infrastructure spending and private sector capital expenditure, which directly influence commercial vehicle demand.
Consumer Behavior
Fleet operators have recently postponed purchases due to constrained infrastructure spending, though demand is expected to revive in FY26.
Geopolitical Risks
Global uncertainties and regulatory changes in export markets like the USA and Germany pose potential trade barrier risks.
Regulatory & Governance
Industry Regulations
Operations are subject to SEBI (LODR) Regulations 2015 and the Companies Act 2013. Compliance with pollution norms and manufacturing standards is mandatory.
Environmental Compliance
Investing in solar power projects to improve ESG profile and reduce long-term energy costs.
Taxation Policy Impact
Effective tax rate resulted in PAT of INR 6.46 Cr from PBT of INR 9.08 Cr in FY25. GST rate on CVs reduced from 28% to 18% in Sept 2025.
Legal Contingencies
The company has affirmed compliance with the Code of Conduct for Directors and Senior Management; no specific pending litigation values were disclosed.
Risk Analysis
Key Uncertainties
Cyclicality of the auto industry and volatility in raw material prices could impact cash accruals by more than 10%.
Geographic Concentration Risk
80% of revenue is concentrated in the Indian domestic market, particularly the southern and western regions.
Third Party Dependencies
Significant dependency on major OEMs like Tata Motors and Ashok Leyland for revenue stability.
Technology Obsolescence Risk
Risk of obsolescence if the company fails to align its forging and component portfolio with the rapid transition to Electric Vehicles (EVs).
Credit & Counterparty Risk
Counterparty risk is mitigated by a client base of reputed OEMs and average bank limit utilization of 79.16% as of August 2025.
