Carraro India eyes 8-12% FY26 revenue growth on axle demand, exports

Carraro India, manufacturer of transmission systems for tractors and off-highway vehicles, is aiming for 8-12% revenue growth in the current financial year, supported by strong demand for four-wheel drive axles and a major export order in the construction equipment segment.

Balaji Gopalan, Managing Director of Carraro India, explained that the growth will be driven by product offtake, especially in segments where the company already has a strong position. “The four-wheel drive market is gaining momentum in India,” he said. Carraro does not participate in the two-wheel drive or basic mechanical gearbox space, and instead focuses on higher-technology segments.

The company has seen a rise in the penetration of four-wheel drive tractors in India, from 15-16% about 18 months ago to over 20% now. The global average is close to 99%. “Carraro is a dominant player in the four-wheel drive axle,” Gopalan added. The company has more than 60% market share in this segment.

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The company is targeting revenue of about ₹3,000–3,100 crore by 2029. This target will be supported by rising technology adoption in the agriculture and construction segments. “Technology absorption is the go-to place for Carraro,” Gopalan said, adding that the Indian market is reaching a turning point for higher-end farm equipment.

On EBITDA margins, Gopalan said several efforts are underway to improve profitability. Localisation has risen from 67% earlier to 77%, and is expected to reach 88%. “Whenever we localise, we save a minimum of 10% and up to 15% in procurement costs,” he said.

He also noted that the company has reduced royalty payments to its global headquarters following the transfer of 154 intellectual property rights to Carraro India. Combined with cost control and a stronger product mix, these measures are expected to improve margins by at least 1% year-on-year (YoY) for the next 3–4 years.

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Carraro India reported a 13% YoY increase in revenue for the quarter ended March 2025, reaching ₹447.9 crore from ₹396.3 crore. The company has a market capitalisation of ₹2,611.19 crore. However, its shares have declined by over 27% in the past six months.

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