Management

• Ajay Seth: Chairman and Independent Director
• Rahul Radhavallabh Dhoot: Managing Director
• Dhiren Vinodrai Sheth: Executive Director
• Saahil Haresh Bhatia: Non-Executive Director
• Rishi Mandawat: Non-Executive Director
• Burjor Kersasp Dadachanji: Non-Executive Director
• Tarun Dharampal Sharma: Independent Director
• Matangi Gowrishankar: Independent Director

Use of Proceeds

Dhoot Transmission Limited’s proposed Initial Public Offering comprises a Fresh Issue of up to Rs.1,400 crore and an Offer for Sale of up to 1.91 crore equity shares. The company will not receive any proceeds from the Offer for Sale; the net proceeds from the Fresh Issue will be used for specific growth and balance-sheet objectives.

• Repayment/Prepayment of Borrowings: The company proposes to utilise Rs.464.8 crore towards repayment or prepayment of certain outstanding borrowings.
• Reduction of Subsidiary Debt: Around Rs.301.8 crore will be invested in Dhoot Autocomponents Private Limited, Dhoot Automotive Systems Private Limited and Dhoot Transmission UK Limited to facilitate repayment or prepayment of their outstanding borrowings.
• New Manufacturing Facilities: The company plans to invest Rs.150 crore in setting up two new wiring harness manufacturing plants at Jhajjar, Haryana and Shoolagiri, Hosur, Tamil Nadu.
• Inorganic Growth and General Corporate Purposes: The remaining proceeds will be used for unidentified acquisitions and general corporate purposes.

Competitive Strengths

Leadership Position in 2W and 3W Wiring Harnesses Dhoot Transmission has established a strong leadership position in India’s two-wheeler (2W) and three-wheeler (3W) wiring harness market. In FY2026, the company held 37.58% market share in 2W and more than 70% in 3W, giving it a combined 41.03% market share across 2W and 3W and placing it among the top two players. Its strong position is supported by a broad product portfolio covering multiple vehicle models and original equipment manufacturer (OEM) platforms. The company’s early presence in electric vehicle (EV) wiring harnesses further strengthens its competitive position, particularly as EV platforms require higher wiring content per vehicle.

Extensive Product Portfolio and Higher Content per Vehicle The company has evolved from a wiring harness manufacturer into a broader automotive electrical and electronics solutions provider. Its portfolio includes wiring harnesses, battery packs, high-voltage cables, battery interconnects, sensors, electronic controllers, automotive switches and power electronics interfaces. This diversification allows Dhoot Transmission to increase its kit value per vehicle as vehicle architectures become more electrified, connected and feature-rich. The company is also expanding into data cables, auxiliary harnesses, EV battery interconnect systems and power electronics, which can further increase content per vehicle and strengthen its share of customers’ bills of material.

Strong business foundation anchored by a marquee customer base and diversified business mix, enabling sustained growth Dhoot Transmission has developed long-standing relationships with leading automotive OEMs, including Bajaj Auto, TVS Motor Company, Honda Motorcycle and Scooter India and Royal Enfield. The company had 495 customers in FY2026, compared with 466 in FY2025 and 436 in FY2024. Its engagement with customers starts from product concept and engineering and continues through development and serial production, helping it understand customer requirements and achieve shorter development timelines. Such close integration with OEMs creates opportunities for repeat business, new platform wins and higher wallet share as customers launch new models.

Professional & Experienced Management Team, R&D team and investor support The company’s in-house research and development (R&D), design and engineering capabilities provide an important competitive advantage. As of March 31, 2026, Dhoot Transmission had 237 employees dedicated to design, engineering and R&D, within a total engineering workforce of 1,129 employees. Its capabilities cover product concept, simulation, prototyping, validation and serial production. This enables faster product development and customised solutions for OEMs. The company has also introduced products such as rollover sensors, wheel-speed sensors, dock chargers, keypad and rocker switches and battery packs, demonstrating its ability to expand into new automotive electronics categories.

Backward Integration Supports Cost and Supply Advantages Dhoot Transmission has developed backward integration in critical components such as terminals, connectors, cables and moulded parts. Producing important components internally helps reduce dependence on external suppliers, improve supply security and strengthen quality control. It can also lower procurement and logistics costs while allowing better control over product specifications and manufacturing timelines. This integrated model is particularly useful for wiring harnesses, where multiple components need to work together with high reliability. The company believes its integrated capabilities improve its overall value proposition to OEM customers through reliability, efficiency and faster programme launches.

Peer Comparison

Key Risks & Concerns

High Dependence on 2W/3W Segment and Wiring Harnesses Dhoot Transmission remains significantly exposed to the Indian two-wheeler (2W) and three-wheeler (3W) markets. In FY2026, 65.47% of revenue came from 2W and 12.86% from 3W, while wiring harnesses accounted for 77.08% of revenue. Any slowdown in vehicle production, inventory correction, weak consumer demand or pricing pressure from OEMs could therefore materially affect revenue and profitability. The company also highlights the cyclical nature of its business, with sales directly linked to OEM production and inventory levels.

High Customer Concentration The company has a concentrated customer base, creating a key business risk. Its top 10 customers contributed 80.93% of revenue in FY2026, while the top five contributed 71.56%. Bajaj Auto alone accounted for 31.84%, followed by TVS Motor at 19.62% and Honda Motorcycle & Scooter India at 10.40%. Any loss of a major customer, reduction in order volumes, change in sourcing strategy or deterioration in customer relationships could have a significant impact on financial performance.

Raw Material Price Volatility Raw materials are a major cost component for Dhoot Transmission. Material consumption represented 67.82% of revenue in FY2026, with copper, polymers, brass, connectors, terminals, cables, mouldings and electronic components being key inputs. Copper is particularly important for wiring harnesses and can account for more than 50–60% of the bill of materials in a harness. Volatility in commodity prices, inflation, tariffs, geopolitical events or supply disruptions can therefore pressure margins, particularly when price increases cannot be immediately passed on to customers.

Supplier Concentration and Supply Chain Disruptions The company depends on a limited number of suppliers for critical raw materials and components. Its top 10 suppliers accounted for 43.66% of raw-material purchases in FY2026. A disruption at key suppliers could affect production schedules and customer deliveries. Replacing qualified suppliers can also require customer approvals, product validation, testing and additional investment. Furthermore, the company imports certain electronic components such as integrated circuits, sensors and printed circuit boards from countries including China, Korea, Japan and Europe, exposing it to geopolitical, trade and logistics risks.

Technology and EV Transition Risk The automotive electrical and electronics industry is undergoing rapid technological change due to electrification, high-voltage architectures, zonal electrical systems and high-speed data connectivity. Dhoot Transmission must continuously invest in research and development, technology, tooling and skilled manpower to remain competitive. Failure to develop products that meet evolving OEM requirements could weaken its market position. There is also a risk that conventional wiring harnesses could eventually be replaced by alternative interconnection technologies.

Pricing Pressure from OEM Customers Automotive component suppliers operate in a highly competitive environment where OEMs continuously seek cost reductions. Dhoot Transmission faces pressure from customers to reduce prices, while fixed manufacturing costs need to be absorbed through higher production volumes. Any inability to achieve manufacturing efficiencies, automate processes or offset cost increases could result in margin compression. The company also bears quality-related costs such as rejection, rework and additional testing, which can further affect profitability.

Outlook and Valuation

Dhoot Transmission is well placed to benefit from the structural growth in India’s automotive and electric vehicle ecosystem. Its strong position in two-wheeler and three-wheeler wiring harnesses, including a 70%+ market share in the three-wheeler segment, provides a solid base for sustained growth. The company is also gaining from rising electric vehicle penetration, premiumisation, connectivity and increasing electronic content per vehicle. Its expanding portfolio of battery packs, high-voltage interconnection systems, sensors, controllers and switches provides additional growth opportunities. EV revenue increased to 24.17% of FY2026 revenue from 16.19% in FY2024, while new products such as battery interconnect systems, data cables, DC-DC converters and onboard chargers could further improve content per vehicle. Financial performance remains strong, with FY2026 revenue rising 31.4% to Rs.4,525 crore. While strong growth prospects and market leadership provide justification for a premium valuation At the issue price of Rs.871, the stock is valued at around ~45x FY2026 earnings, making the IPO valuation relatively demanding. However, the company’s strong market position, established OEM relationships, expanding manufacturing footprint and growing presence in EV components provide a strong foundation for sustainable long-term growth. With increasing vehicle electrification and rising electronic content per vehicle, we believe Dhoot Transmission is well positioned to benefit from India’s evolving automotive landscape. Considering these growth prospects, we assign a “Subscribe for Long Term” rating to the issue.