Carraro India Limited manufactures axles and transmission systems for agricultural tractors and construction vehicles such as backhoe loaders, soil compactors, cranes, self-loading concrete mixers and small motor graders. Company's products are mission critical for their customers, as these products constitute important components of customers’ final products. Company's Promoter, Carraro S.p.A., is the parent company of the Carraro Group.
They support the full value chain of services as a solution provider for axles, transmission systems, gears and other related components with in-house product design manufacturing capabilities.
Strengths And Risks
+ Leading tier 1 suppliers of transmission systems: Company is one of the leading independent tier 1 suppliers of axles, transmission systems and gears for the agricultural tractor and construction vehicle industries in India with 60-65% share of the non-captive construction vehicle transmission market.
+ Longstanding OEM customer base: Company develops customized solutions for customers in India and international customers with Indian subsidiaries or operations, by covering the full value chain from R&D to manufacturing of axles and transmission systems.
+ Marquee supplier base : They have a supplier base of 189 suppliers spanning across eight states in India and 68 suppliers internationally. Company has developed longstanding relationships with local suppliers in India and leveraged the Carraro Group’s support for their relationship with international suppliers.
+ Strong, in-house R&D capabilities : Company was among the pioneers to enter the agricultural tractor and construction vehicle component market with its dedicated R&D team and center. With recent acquisition of CTIPL, company has integrated the design, R&D and manufacturing capabilities of its products, which is pivotal in enhancing its competitive position in India.
- Top customer concentration: Company is dependent on certain key customers for a significant portion of revenue. Almost 70% and 86% of revenue is from top five and top 10 customers respectively, in FY 2024, and any inability to retain key customers or attract new customers may impact business.
- Promoter brand dependence: Company depends partially on other entities in the Carraro Group for operations, such as the license of
the Carraro brand, customer sourcing, procurement, R&D, and general support of operations. Any
disruption in this relationship could impact business.
- Legal proceedings: Company, its Subsidiary and Promoters are involved in outstanding legal proceedings. Any adverse outcome in any of these proceedings may adversely impact its business and reputation.
- Seasonality: The sales of company's agricultural tractor products are influenced by the cyclicality and seasonality of demand in the countries in which they operate with a decline in sales in some quarters.
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