Carraro India IPO: The good and the bad

Published: 20th Dec 2024

By: Value Research

About Carraro India

Carraro India designs, manufactures, and supplies axles, transmissions, and gears, which are crucial components in agricultural tractors and construction vehicles. Presently, the company has over 1,700 employees spread across its two manufacturing plants and a research and development centre in Pune.

IPO details

Post-IPO

Financial history

EBIT is earnings before interest and taxes PAT is profit after tax TTM (trailing twelve months) is as of September 2024

Key ratios

ROE is return on equity ROCE is return on capital employed TTM is as of September 2024

The good

The company has a strong customer base both in India and abroad, with some of its major clients being Mahindra, ACE, Volvo, TAFE and CNH Industrial.

The bad

As of FY24, Carraro India derived 85% of its revenue from its top 10 customers. Hence, losing any of these key customers can significantly impact the company's financials.

The bad

The company derives 45% of its revenue from the agriculture tractor business as of FY24, which is seasonal in nature. Thus, during periods of poor or low demand, Carraro India’s financials are also affected.

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