Tenneco's exports fell to 5-6% of sales. Six months ago, management said 7-8%.
Record EBITDA margin of 18.8% and a DaVinci technology push anchor the FY26 results, but an unexplained drop in export contribution clouds the growth narrative.
What's new
- FY26 EBITDA margin hit a record 18.8%, expanding 450 bps from FY24.
- The lifetime order book stands at ₹124,000 million, providing 100% visibility to FY28 targets.
- The DaVinci DCX mechanical suspension is expanding from one OEM to 3-4 additional OEMs.
Themes from the call
Demand
The ₹124,000 million order book supports a double-digit medium-term growth target, with a large new gasoline particulate filter program confirmed for 2028.
Margins
Record 18.8% EBITDA margin was achieved despite geopolitical pressures on freight, energy, and plastics costs.
Capital allocation
₹1,400 million in capex announced for a North India Clean Air facility and a West India suspension greenfield plant, both commissioning in 6-12 months.
Guidance watch
- Export revenue is guided to ramp 'middle-ended' in FY27-FY28, aiming for a 14-20% mix from the current 5-6%, tied to new plant commissioning.
- Management targets 50% penetration of the mid-to-premium SUV segment for DaVinci technology.
Risk flags
- The export percentage has regressed from 7-8% to 5-6% without explanation, raising questions about the ramp's start point and prior commentary.
- Clean Air segment growth of 5.5% for FY26 was modest and linked to OEM product mix concentration, a factor outside the company's control.
Key quotes
-
"This is a total game changer and disruptive to the conventional mechanical dampers which still dominate over 90% of passenger vehicles in India."
— Arvind Chandra, CEO -
"Our current exports as a percentage of sales is very low, around 5-6%, because exports were not a primary strategy in the past."
— Tenneco management, Jun 2026 call
The brief
Tenneco Clean Air's FY26 results delivered record profitability and a bold technology bet. EBITDA margin reached 18.8%, its highest ever, and the order book provides clear revenue visibility through FY28. The DaVinci DCX mechanical suspension system, described by CEO Arvind Chandra as a "total game changer," is expanding to multiple OEMs, targeting a huge slice of the SUV market.
The less clear story is exports. In December 2025, management told investors exports had grown to 7-8% of value-added revenue. Now, they say the number is 5-6%. The reversal is stark and unexplained. It matters because export growth is framed as a key pillar for the future, with the order book implying a mix of 14-20%. If the starting point has shrunk, the climb is steeper. Management says the ramp will begin in FY27-FY28, tied to new capacity, but the prior statement forces a credibility discount on that timeline.
The operational core is solid. Advanced Ride Technologies grew nearly 20% in FY26. The company is debt-free and funding its ₹1,400 million expansion from operations. The risk is in the mix. Clean Air growth was a soft 5.5%, attributed to customer concentration, and the export target now looks like it is being reset from a lower base. The new plants must deliver as promised to hit the double-digit growth guidance.
DaVinci's technology story is real, but Tenneco must explain why the export foundation shifted beneath it.