7,726% Profit Growth: Auto ancillary stock skyrockets 16% after announcing robust Q3 results

Synopsis: Auto Components & Equipment company shares rose 16% after Q3 results, with revenue up 21.2% YoY to ₹1,015.15 crore, net profit surging 7,725.6% YoY to ₹30.52 crore, and its earnings per share (EPS) for the quarterly period stood at ₹11.04.

The shares of the Small-Cap company specializing in the design, manufacture, and distribution of critical steering and suspension systems for the automotive industry are in focus following their Q3 results, with a 7,726 percent jump in profit.

With a market capitalization of Rs. 2,352.06 Crores on the Day’s Trade, the shares of Rane (Madras) Ltd rose by 16 percent, reaching a high of Rs. 895.75 compared to its previous close of Rs. 770.30.

What Happened

Rane (Madras) Ltd specializes in the design, manufacture, and distribution of critical steering and suspension systems for the automotive industry, is in the spotlight today as it has announced its Q3 results as follows:

Its Revenue from operations rose by 21.2 percent YoY from Rs. 837.37 Crores in Q3FY25 to Rs. 1,015.15  Crores in Q3FY26, and it rose by 10.4 percent QoQ from Rs. 919.31  Crores in Q2FY26 to Rs. 1,015.15  Crores in Q3FY26.

Its Net Profit YoY rose by 7725.6 percent from Rs. 0.39 Crores in Q3FY25 to Rs. 30.52 Crores in Q3FY26, and on a QoQ basis, it rose by 42.1 percent from Rs. 21.47 Crores in Q2FY26 to Rs. 30.52 Crores in Q3FY26. 

Last year, PAT included one-time impact of Rs. 8.27 Crores on account of tax credit reversal due to the adoption of the new income tax regime in erstwhile Rane Engine Valve Limited. The earnings per share (EPS) for the quarterly period stood at Rs. 11.04, compared to Rs. 0.14  in the previous year’s quarter.

Q3 FY26 Performance

The Sales to Domestic OE customers grew by 18%, mainly driven by stronger demand across vehicle segments. Sales to International customers increased by 21%, supported by strong offtake of steering products. 

Sales to Indian Aftermarket customers experienced a 32% growth, and the sales of aftermarket products were not comparable to Q3 FY25 due to the restructuring of the Aftermarket Product Business.

Rane (Madras) Limited (RML) is part of the Rane Group of Companies, a leading auto component group based in Chennai. RML is a preferred supplier to major OEMs and the aftermarket in India and abroad. 

RML manufactures various automotive products, viz. Steering and Suspension systems, Brake components, Engine components, and Light Metal Casting components. Its products serve a variety of industry segments, including Passenger Vehicles, Commercial Vehicles, Farm Tractors, Two-wheelers, Three-wheelers, Railways, and Stationery Engines.

The company demonstrates a decent ROCE of 11.9 percent and an ROE of 8.42 percent. Notably, it has maintained a strong 3-year average ROE of 29.3 percent, reflecting consistent shareholder returns.

Rane has a diverse customer base across multiple vehicle segments and applications. In India, their customers include leading passenger vehicle brands like Hyundai, Tata, Mahindra, and Toyota, commercial vehicle companies such as Ashok Leyland and Tata, farm tractor manufacturers including Escorts and Force Motors, and two/three-wheeler brands like Hero and TVS. 

Internationally, they serve prominent players in passenger vehicles like BMW and Skoda, commercial vehicles including Volvo and Daimler, farm tractors like John Deere and Kubota, as well as 2W/3W manufacturers such as Yamaha. Additionally, Rane caters to other applications with clients like Kawasaki and Polaris.

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