Tenneco Clean Air India Q2 FY27 Results Analysis: Revenue Surges 34%, Margin Compression Persists (TENNIND)
Tenneco Clean Air India Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 1,718.34 Cr (+34.18% YoY) and PAT growth of +15.00% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | November 04, 2026 |
|---|---|
| Revenue (Q2) | Rs. 1,718.34 Cr (+34.18% YoY) |
| PAT (Q2) | Rs. 173.07 Cr (+15.00% YoY) |
| EBITDA margin | 15.22% (-171 bps YoY) |
| EPS (Q2) | Rs. 4.29 (+15.01% YoY) |
Quarter Snapshot
Revenue grew 34.18% YoY, ahead of management's double-digit FY27 top-line guidance, with H1 up 27.15% and net cash of ~Rs.843 crore. The offset is a fifth consecutive quarter of margin compression (-171 bps YoY to 15.22%) from non-indexed commodity/FX pressure plus a ~384 bps YoY rise in the effective tax rate, leaving PAT growth at 15.00%. Cash conversion (CFO/PAT 1.38x) and flat receivables despite the growth ramp indicate high-quality earnings, with the Kharkhoda greenfield production start in Q3 FY27 the next visible catalyst.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue / demand | "likely ahead… the demand backdrop supports the double-digit top-line growth management guided for FY27" | Revenue +34.18% YoY, +11.24% QoQ | Played out |
| Margins | "the 18.8% → 17.9% (VAR) slide more likely extends than stabilizes" | Revenue-basis margin 15.22%, −171 bps YoY, −76 bps QoQ (VAR basis not disclosed in filing) — direction | Played out |
| Double-digit FY27 top-line | "supported by the Q2 demand prints" | H1 +27.15% YoY | Played out |
| Capex / CWIP progression | "Kharkhoda's Q3 FY27 production start should show up in CWIP progression" | CWIP Rs.152.75 crore vs Rs.58.07 crore at Mar-26; H1 capex Rs.119.06 crore | Played out |
| GST SCN provision risk | "Any provision taken in Q2 would be a discrete PAT item to isolate" | No provision / no exceptional in the Q2 P&L — contested, remains open | Not observable in filing |
| Order-book split (domestic/export) | "the promised domestic-vs-export order-book split disclosure (due with Q2)" | Not in the filing — remains open for the call | Not observable |
| Section 232 export economics | "the 25% auto-parts tariff remained in force with no India relief" | Not addressed in the filing — remains open for the call | Not observable |
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Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| Double-digit FY27 top-line growth | Management, Q1 FY27 earnings call ("targeting… to support our double-digit top-line growth") | Q2 revenue +34.18% YoY; H1 +27.15% | On Track |
| FY27 capex Rs.350–450 crore (indicative, demand-linked, from internal accruals) | Q1 FY27 earnings call (CFO: "approx INR350 crores to INR450 crores for FY '27… kind of indicative") | Rs.119.06 crore spent in H1; CWIP up to Rs.152.75 crore — H1 run-rate consistent with the band; demand-linked caveat applies | On Track |
| Return to previous margin levels "in coming years" (open-ended) | Management commentary, Q1 FY27 call | Revenue-basis margin 15.22%, still compressing (−171 bps YoY, −76 bps QoQ) | Too Early |
Key Investment Insights
Key Positives
- Revenue grew 34.18% YoY to Rs.1,718.34 crore and 11.24% QoQ; H1 FY27 up 27.15% YoY
- EBITDA grew 20.66% YoY to Rs.261.58 crore
- PAT to owners grew 15.00% YoY to Rs.173.07 crore; EPS Rs.4.29 vs Rs.3.73
- H1 CFO/PAT of 1.38x; FCF of Rs.348.66 crore after Rs.119.06 crore capex
- Net cash position of ~Rs.843.00 crore with no borrowings; cash of Rs.914.63 crore
- Trade receivables flat (-0.03%) despite 34% YoY revenue growth
- CWIP nearly tripled to Rs.152.75 crore supporting the Kharkhoda greenfield (production start guided Q3 FY27)
- Standalone H1 PBT (dividend-normalized) grew 25.45% YoY
Risk Factors
- EBITDA margin compressed 171 bps YoY and 76 bps QoQ to 15.22%, the fifth consecutive quarterly decline in the company's margin series
- Cost of materials grew 35.09% YoY, outpacing revenue growth of 34.18%
- Effective tax rate rose ~384 bps YoY to 25.53%
- Other income fell 24.08% YoY to Rs.9.16 crore
- H1 EBITDA growth (+14.09%) lagged H1 revenue growth (+27.15%) by ~13 points
- New ESOP charge of Rs.7.80 Mn in H1 FY27 (nil in H1 FY26), Q2 split undisclosed
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.