Bonfiglioli Transmission Limited (Neutral)

Highlights

Bonfiglioli Transmission Limited (BTL) incorporated in 1998, is one of India’s leading technology-driven companies providing mechanical and electro-mechanical power transmission and industrial drive solutions. They designs and manufactures high-precision, mission-critical gearboxes and drive systems that are used across a wide range of industries.

BTL markets its product across three business verticals: (i) Industrial & Automation Solutions, offering gear motors, gearboxes (13 Nm-1,400 kNm), electric motors, variable frequency drives, servo drives and precision drives for robotics and automation; (ii) Off-Highway Mobility (OHM) , providing swing, track, drum, mixer, wheel, auger, conveyor, cutter and hoist drives; and (iii) Wind Solutions, supplying yaw and pitch drives.

BTL markets and sells through direct sales across all business verticals and a dealer network under its Industry & Automation vertical, covering India through 71 touchpoints for customer sales and service, including 3 manufacturing facilities, 13 sales offices, 13 authorized third-party service facilities, and 44 authorized dealers with 54 outlets.

Out of the total proceeds of Rs. 25,338 mn, comprising entirely an offer for sale with no fresh issue component, the full Rs. 25,338 mn will accrue to the promoter and investor selling shareholders of the company.

Key Highlights                        

• The global industrial gearboxes (>15Nm) market is projected to grow from USD 9.1 bn in CY25 to USD 12.1 bn by CY31, at a CAGR of 4.9 pct, while the gearbox market (<15 Nm) is projected to rise from USD 5.6 bn to USD 7.6 bn, at a CAGR of 5.2 pct over same period.The Indian industrial gearboxes (>15Nm) market is projected to grow from Rs. 40,400 mn in FY26 to Rs. 57,900 mn by FY31, at a CAGR of 7.5 pct, while the gearbox market (<15 Nm) is projected to rise from Rs. 29,650 mn to Rs. 43,500 mn, at a CAGR of 8.0 pct over the same period.

• The global OHM drives market is projected to grow from USD 4.6 bn in CY25 to USD 6.6 bn by CY31, at a CAGR of 6.0 pct, while the Indian market is projected to rise from Rs. 19,500 mn to Rs. 30,900 mn, at a CAGR of 9.6 pct between FY26-31. Further, the global wind turbine drives market is projected to grow from USD 1.0 bn in CY25 to USD 1.4 bn by CY31, at a CAGR of 5.2 pct, while the Indian market is projected to rise from Rs. 9,350 mn to Rs. 15,000 mn, at a CAGR of 9.9 pct between FY26-31.
• BTL leverages the Bonfiglioli Group’s global brand equity, engineering expertise, and R&D capabilities to strengthen its India presence through direct OEM relationships, reliable after-sales service, diversified products and automated manufacturing. Access to the Group’s global R&D ecosystem, particularly the Chennai R&D Centre, enables faster product development, improved design-manufacturing integration, and quicker response to India-specific customer requirements, strengthening its position as a specialised solutions provider.
• BTL serves its customers directly under its Industry & Automation vertical, with more than 930 customers served in H1CY26. While it co-engineers customised, technology-intensive products in the OHM and Wind verticals, integrating into product development from the design stage to meet specific end-use requirements.
• BTL operates 3 manufacturing facilities in India (2 in Tamil Nadu and 1 in Maharashtra), with operations vertically integrated comprising of machining, gear cutting, heat treatment and final assembly. They continue to expand its manufacturing footprint through greenfield and brownfield investments targeting new business opportunities, and is additionally increasing domestic sourcing to strengthen its localisation strategy.
• BTL follows a multi-dimensional quality assurance approach across its operations and provides after-sales support through 2 dedicated channels – (i) 15 in-house service engineers stationed at its 13 sales offices and (ii) 13 authorised third-party service facilities that have 24 engineers.
• BTL’s key growth strategies include (i) To strengthen market leadership position by capitalizing on industry tailwinds across business segments (ii) broaden product portfolio and accelerate new product launches, (iii) strengthen manufacturing operations with increasing local sourcing, and (iv) strengthen market access and customer relationships while remaining cost effective.
• The sales of the company have grown by 9.24 pct CAGR over FY24-26 and EBITDA/profit has grown 23.30 pct CAGR/27.35 pct CAGR over same year. In FY26 the company reported sales of Rs. 20,135 mn rose by 8.59 pct YoY. EBITDA of the company rose by 25.65 pct YoY to Rs. 3,708 mn. In FY26 the company posted profit of Rs. 2,379 mn, which increased by 24.15 pct YoY.

Key Risk

• BTL depend on the sale of yaw and pitch drives in the Wind vertical and low-to-medium-duty gear motors in the Industry & Automation vertical, any event of demand fluctuations and manufacturing disruptions could affect it business operations.
• Any increase in prices of raw material and components or higher import duties could adversely impact BTL’s business and financial performance.

Financial Performance

Source: – RHP.

Peer Comparison based on FY26 Financials.

Source: – RHP.

*Peers numbers are recalculated as per calendar year from Jan25-Dec25.

Valuation

Bonfiglioli, a global leader in power transmission and drive solutions, has firmly established itself as a pivotal player in the Indian industrial landscape. With a rich history spanning over two decades, a robust manufacturing footprint, and an extensive product portfolio catering to diverse applications, Bonfiglioli India has consistently driven innovation and contributed significantly to the nation’s industrial drive solutions and power transmission market’s growth. At the upper end of the price band of Rs. 586, the issue is priced at an TTM PE of 40.6x based on post issue capital. The issue appears to be fully priced.

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