An Indian automotive components manufacturer is expected to see steady growth over the next three years, supported by improving margins, operational efficiency and a gradual recovery in demand.
Automotive Axles Limited (AAL), a key supplier of axles and braking systems for commercial vehicles, has reported stable financial performance, with projections indicating continued expansion. The company’s net sales are forecast to rise from ₹2,078 crore in FY25 to ₹2,346 crore by FY28, while profit after tax is expected to grow from ₹154 crore to ₹219 crore over the same period.
Analysts say profitability is being supported by improving operating margins. EBITDA margins rose to 11.4% in the third quarter of FY26, up from 10.5% in the previous quarter. Management expects margins to move into the mid-teen range in the near term, driven by higher capacity utilisation and better cost control.
However, the company’s recent revenue growth has lagged the wider industry. While the commercial vehicle sector expanded by around 17%, AAL recorded growth of about 6%, largely due to weaker exports and softness in defence and off-highway segments. Its core medium and heavy commercial vehicle (M&HCV) business, which accounts for roughly 90% of revenue, continues to track broader industry trends.
Exports, which typically contribute up to a quarter of revenue, have declined amid weakness in the US truck market and wider global uncertainty. Despite this, the company maintains strong relationships with major original equipment manufacturers and reports high delivery performance.
AAL is currently operating at around 80% capacity and is investing to meet future demand, with full capacity expansion expected by late FY27. It is also adapting to regulatory changes, including new bus design standards set to take effect in October 2026.
Looking ahead, analysts expect earnings growth to be driven by new product launches, cost optimisation and a recovery in both domestic and export markets, with margins and volumes likely to improve as industry conditions stabilise.
