Tenneco CleanQ1 FY27
Tenneco Clean Q1 FY27 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹545P/E: 37.5Market Cap: ₹23.3K CrSector: Auto Components
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
No
Order
Yes
Capex
Yes
2 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 3- Served addressable market (SAM) growth expected around 16%; excluding EV impact and certain OEMs, adjusted SAM growth is about 8-10%.
- Continued gains with new and existing customers, especially in commercial vehicles and passenger vehicle segments.
- New product launches planned, notably DaVinci technology in suspension and Clean Air Powertrain segments, expected to drive growth through March 2027.
- Exports currently 7% of revenues; expected to grow faster than domestic business due to global partnerships and India as an export hub.
- Advanced Ride Technologies (ART) business growing strongly, with about 27.9% year-on-year VAR growth.
- Order book growth steady with mid-teen percentage growth expected over 2 years; careful management to scale capacity.
- Future volume growth driven by technology wins in A and B segment vehicles and upcoming regulatory norms (BS-VII, CAFE 3).
Overall, Tenneco expects sustained profitable growth driven by technology, market penetration, and export expansion.
Margin guidance
Category 3- →The company expects continued double-digit revenue growth driven by increasing content per vehicle, new program launches (especially DaVinci technology), and market share gains.
- →Advanced Ride Technologies (ART) is a key growth driver with 27.9% year-on-year VAR growth, supported by expanding adoption of advanced suspension tech and new customers.
- →EBITDA growth is steady but faces margin pressure due to commodity inflation and geopolitical uncertainties; however, disciplined cost management and productivity initiatives aim to sustain profitability.
- →Capex of INR350-450 crores is fully funded through internal accruals, maintaining a debt-free status and supporting growth capacity.
- →The company aspires to substantially penetrate India’s A and B segment passenger vehicles with DaVinci technology by FY2028-29, which is expected to increase earnings.
- →M&A and inorganic growth options are being explored to enhance future earnings.
- →Overall, earnings growth is expected to continue, with operational excellence and technology wins underpinning future profitability.
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Fundraise plans
No- →The company is currently debt-free and plans to remain so despite planned capital expenditure of INR 350-450 crores, which will be fully funded through internal accruals.
- →There is no mention of any immediate or planned fundraising through debt or equity.
- →Excess cash generated from operations may be deployed for inorganic growth, including potential mergers and acquisitions (M&A).
- →Any significant announcements regarding fundraising or strategic capital deployment will be made at the appropriate time.
- →The focus is on organic growth funded internally, maintaining a strong balance sheet without incurring debt.
Order book
Yes- →The company does not disclose exact current order book figures quarterly; it reports order books semi-annually.
- →Last known order book was around INR 12,400 crores.
- →The order book is expected to grow at a mid-teen percentage rate over two years, with no change in outlook since the last update.
- →Significant new wins include multiple new customers in suspension business and Clean Air, driven by innovative DaVinci technology.
- →Export order book proportion is increasing, with exports making up about 7% of total revenue, and export order book portion of total orders between 14%-20%.
- →The split of exports orders is roughly 70% intercompany (Tenneco to Tenneco) and 30% third-party OEMs but could change as opportunities evolve.
- →Order book growth is aided by product localization, new programs, and expansion into new customers and markets.
Capex plans
Yes- →Planned capex for FY27 is approximately INR 350 crores to INR 450 crores, fully funded through internal accruals.
- →Capex will be allocated towards both Clean Air and Powertrain business segments, including Advanced Ride Technologies (ART).
- →Includes investments for two new plants already announced, amounting to about INR 140 crores.
- →Some portion of the capex is export-oriented to support export growth plans.
- →The company is closely monitoring economic conditions and may adjust capex based on demand.
- →Options including mergers and acquisitions (M&A) are being pursued to deploy surplus cash for inorganic growth when the right opportunity arises.
How does Tenneco Clean rank vs peers in Auto Components?
Pro feature1Tenneco Clean
Rev 3Mar 3
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