Divgi TorqTransfer Systems Limited said it is progressing with plans to localise automatic transmission manufacturing in India, positioning the segment as a significant long-term growth opportunity. The initiative forms part of the company’s broader strategy to expand its drivetrain portfolio and deepen localisation across product verticals.
Management said automatic transmissions used in India are largely imported and supplied by overseas Tier 1 manufacturers, with limited domestic production. Divgi has completed an initial commercial assessment for localisation and has engaged customers on the proposal.
“Currently, automatic transmissions used in India are largely imported, with very limited domestic manufacturing and predominantly supplied by overseas Tier 1 players,” said Jitendra Divgi, Managing Director of Divgi TorqTransfer Systems Limited.
The company plans to conclude a technology demonstrator for one of its largest original equipment manufacturer (OEM) customers by the second quarter of FY27. “Directionally, we hope to conclude a contract by July 2026,” Divgi said, adding that a potential launch could take place in calendar 2028, corresponding to FY29, subject to contract finalisation.
Internal economic analysis indicates potential cost savings of more than 10 percent on a product priced above INR100,000, along with improvements in working capital efficiency across the value chain. The programme will require collaboration with suppliers across India, Europe, the United States, Korea, Taiwan and China.
Divgi said localisation of automatic transmissions complements its transfer case business and enables the company to move towards more integrated drivetrain solutions.
Alongside the automatic transmission programme, the company reported progress in developing an electronically controlled transfer case for a leading Japanese OEM, with start of production expected in the first half of FY28. “Initial prototypes are ready and a proof of concept has been successfully developed and demonstrated in a vehicle,” Divgi said.
Export Strategy
Export revenues reached a quarterly run rate of approximately INR190 million, contributing around 17 percent of total income during the period. Management said the components segment grew 117 percent year-on-year despite global market uncertainties. Divgi reiterated its medium-term objective of increasing exports to 20 percent to 25 percent of total income as part of its geographic diversification strategy.
The company also confirmed export orders totalling 70,000 transfer cases for pickup programmes in Indonesia, under which it will act as the exclusive supplier. Production is expected to commence in calendar 2026, with most execution occurring in FY27.
To support access to Japanese and East Asian markets, the company has an exclusive distribution arrangement with Toyota Tsusho India Private Limited, part of the Toyota Group. The arrangement enables Toyota Tsusho to market and distribute Divgi’s transmission and transfer case products to Japanese OEMs globally, while Divgi acts as a manufacturing partner in India for specified drivetrain categories. Management identified Thailand, China, Korea and Japan as target markets under this collaboration.
In components, Divgi said export momentum remained strong, supported by relationships with global Tier 1 suppliers. The company has commenced supplies to new geographies including Portugal and Europe and is evaluating the feasibility of establishing a manufacturing footprint in the United States. A preliminary conclusion on the U.S. evaluation is expected by the end of Q1 FY27.
In North America, Divgi is evaluating the feasibility of establishing a manufacturing footprint in the United States as part of its long-term growth strategy. The objective is to enhance customer proximity and capture demand from U.S.-based Tier 1 suppliers and OEMs. A preliminary conclusion on the evaluation is expected by the end of Q1 FY27. The company cited ongoing engagement with customers including BorgWarner, Magna, Ford and General Motors.
EV Transmissions
In electric vehicle (EV) transmissions, the company is developing a 120-kilowatt, 220 newton-metre transmission for four models of a key customer, with start of production indicated for April 2026. Management said EV volumes remain range bound but expects gradual improvement.
Financial Performance
Financially, Divgi reported its highest-ever quarterly and nine-month revenue in Q3 FY26. For the nine months ended 31 December 2025, total income rose 48 percent year-on-year to INR2.614 billion from INR1.76 billion. EBITDA increased 46 percent to INR644 million, with a margin of 24.7 percent, while profit after tax grew 65 percent to INR314 million.
In Q3 FY26, total income rose 68 percent year-on-year to INR963 million from INR575 million. EBITDA increased 72 percent to INR234 million, and profit after tax rose 125 percent to INR118 million.
“This marks yet another important milestone for our company as we delivered our highest ever quarterly total income,” Divgi said.
The company reiterated its aspiration of delivering 12 percent to 15 percent compound annual growth over five years from an FY20 base.
Divgi TorqTransfer Systems Limited is a Pune-based manufacturer of transfer cases, manual transmissions, EV transmissions and precision drivetrain components supplying domestic and international automotive OEMs.
