Dhoot Transmission IPO

Strengths · 6

• 01It is among the top two players in India's two-wheeler and three-wheeler wiring harness market with about 41% share. In the electric 2W and 3W segment it is the leader with nearly 70% share in FY2026.
• 02The company is ready for the EV shift. About 95% of its automotive product range is either EV-focused or works on any type of powertrain, so a move away from petrol and diesel vehicles will not hurt it much.
• 03Business has grown well. Total income went up from Rs 2,799.32 crore in FY2024 to Rs 4,563.70 crore in FY2026. Profit after tax rose from Rs 298.75 crore to Rs 396.84 crore in the same period.
• 04Return ratios are strong. RoCE was 29.66% and RoNW was 36.18%. EBITDA for FY2026 was Rs 710.99 crore.
• 05The product range and the end markets are spread out. Apart from two and three wheelers, the parts go into commercial vehicles, off-highway vehicles, farm equipment and industrial uses.
• 06Rs 150 crore of the fresh money will build two new wiring harness plants, at Jhajjar in Haryana and Shoolagiri, Hosur in Tamil Nadu. This adds capacity close to customer clusters.

Risks · 8

• 01More than half the issue is an offer for sale. Out of Rs 3,066.89 crore, about Rs 1,666.89 crore is OFS and goes to the selling shareholders. The company will receive only about Rs 1,400 crore.
• 02Profit is growing much slower than sales. Between FY2025 and FY2026 revenue went up 31% but profit after tax rose only 12%. This shows margin pressure.
• 03The issue is not cheap. At the upper band of Rs 871, the P/E works out to about 44.9 times on an EPS of Rs 19.40.
• 04Borrowings are high. Total borrowing was Rs 841.39 crore as on 31 March 2026, up from Rs 554.90 crore in FY2024. Rs 464.80 crore of the fresh issue and another Rs 301.77 crore put into subsidiaries will go towards repaying loans.
• 05The auto parts business is cyclical. Two-wheeler and three-wheeler sales go up and down with the economy, festive demand, financing and fuel prices.
• 06The company supplies to a few large vehicle makers. Losing any big OEM, or a fall in their production, will directly hit revenue.
• 07Promoter holding will come down from 100% to 82.77% after the issue. BC Asia Investments XV Ltd, a promoter, is selling shares worth about Rs 1,395.23 crore in this offer.
• 08Part of the money is kept for buying companies that have not been identified yet. There is no clarity today on where this will be spent.

Dhoot Transmission Limited was started in April 1998. It is one of India's leading electrical and electronics companies. It designs, engineers, manufactures and supplies wiring harnesses and electrical distribution systems. These are used in vehicles as well as in non-automotive applications.

The product list is wide. It includes wiring harnesses, battery packs, sensors and electronic controllers, automotive switches, terminals, connectors and power supply cords. The company makes parts for both petrol and diesel vehicles (ICE) and for electric vehicles.

The company is among the top two players in India's two-wheeler and three-wheeler wiring harness market, with about 41% market share. In the electric two-wheeler and three-wheeler segment it is the leader with nearly 70% share in FY2026. Its products are also used in commercial vehicles, off-highway vehicles, farming equipment and industrial machines.

About 95% of its automotive product range is either EV-focused or works on any type of powertrain. This helps the company benefit from the shift to electric vehicles, premium models, connected vehicles and automation.

The company has long-term relationships with big vehicle makers and keeps a mixed customer base. As on 31 March 2026, it had 2,735 full-time employees working in manufacturing, R&D, engineering, sales, finance and corporate roles.

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