Table of content
Kross Introduction
Kross Ltd. is a diversified manufacturing company specializing in the production and supply of trailer axles, suspension assemblies, and a wide range of high-performance, safety-critical components for medium and heavy commercial vehicles (M&HCV) and agricultural equipment12. Founded in 1991, Kross has established itself as a key player in the automotive parts industry, offering products such as axle shafts, companion flanges, anti-roll bars, stabilizer bar assemblies, and more
Also read ITC Limited A Diversified Indian Conglomerate from 1910
Brief about Kross
Summary of the business of Kross
Kross is a diversified player focused on manufacturing and supply of trailer axle and suspension assembly and a wide range of forged and precision machined high performance safety critical parts for medium and heavy commercial vehicles (“M&HCV”) and farm equipment segments. We are widely recognized as one of the prominent manufacturers of trailer axles and suspension assembly in India (Source: CRISIL Report). In 2019, we commenced manufacture and sale of trailer axle and suspension assemblies and have witnessed robust growth between Fiscal 2021 and Fiscal 2024 (Source: CRISIL Report).
Kross History
Company was incorporated as “Kross Manufacturers (India) Private Limited”, as a private limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated May 9, 1991, issued by the Registrar of Companies, Bihar at Patna. Thereafter, the Registered Office of our Company was changed from 214, Ashiana Centre Adityapur, Jamshedpur – 831013 to M-4, Phase VI, Gamharia, Adityapur Industrial Area, Jamshedpur – 832108. Subsequently, the name of our Company was changed from “Kross Manufacturers (India) Private Limited” to “Kross Private Limited” pursuant to a fresh certificate of incorporation issued by the Registrar of Companies Jharkhand at Ranchi dated September 26, 2016. Further, the name of our Company was changed upon conversion from a private limited company “Kross Private Limited”, to a public limited company “Kross Limited” pursuant to a special resolution passed by our shareholders on January 13, 2017 and a fresh certificate of incorporation issued by the Registrar of Companies Jharkhand at Ranchi dated January 17, 2017.
Calendar Year | Particulars |
1991 | Obtained the certificate of incorporation. |
1997 | Supplied their first product, joint cross to Tata Engineering and Locomotive Company Limited (Telco Limited) |
2001 | Diversified into tractor components and started working with TAFE. |
2006 | Started working with Ashok Leyland by developing output flanges. |
2008 | Installed upsetter forging equipment (4” and 5”) and started development of manufacturing of axle shafts for Tata Motors. |
2008 | Installed press forging equipment by installing 2500 and 2000 tonnes mechanical press. |
2014 | Commenced business with International Tractors Limited for rockshafts. |
2016 | Developed spider bevel gears for TAFE. |
2018 | Commenced manufacturing anti-roll bar and stabilizer bar for OEM’s by commissioning a new facility, Unit IV |
2019 | Developed the trailer axle along with mechanical suspensions for the trailer industry. |
2022 | Established foundry Unit V, a high pressure mould line along with its machine shop. |
Kross Promoters & Board of Directors
- The Promoters of Company are Sudhir Rai, Anita Rai, Sumeet Rai and Kunal Rai
Kross Board of directors
Name | Designation |
Sudhir Rai | Chairman and Managing Director |
Anita Rai | Whole-time Director |
Sumeet Rai | Whole-time Director |
Kunal Rai | Whole-time Director (Finance) and CFO |
Sanjiv Paul | Independent Director |
Mukesh Kumar Agarwal | Independent Director |
Deepa Verma | Independent Director |
Gurvinder Singh Ahuja | Independent Director |
Kross Share Holding pattern
Name of Shareholder | % of Holding |
Promoters | |
Sudhir Rai | 57.68% |
Anita Rai | 28.1% |
Sumeet Rai | 7.02% |
Kunal Rai | 6.46% |
Total holding of the Promoters | 99.26% |
Promoter Group | |
Dipak Rai HUF | 0.74% |
Public | 0.01% |
Kross Strength
- Long standing relationship with large OEMs and their tier one suppliers, domestic dealers and fabricators for our trailer axle and suspension business complemented by a diversified network of dealers for our trailer axle and suspension assembly business
- Wide recognition as one of the prominent manufacturers of trailer axles and suspension assemblies in India and one of the few players domestically with the competency to manufacture trailer axles and suspension assembly in-house
- Diversified product portfolio with a focus on continuous value addition
- Integrated manufacturing operations coupled with in-house product and process design capabilities which offer scale, flexibility and comprehensive solutions
- Track record of sustained growth and robust financial performance in the last three financial years
Kross Strategies
- Expand capacities at our existing manufacturing facilities to increase manufacturing scale for our existing products and creation of new products
- Create manufacturing capabilities in axle beam extrusion and backward integration capabilities into the seamless tube
- Expand our geographical reach through growing exports
- Continuing focus on reduce operating costs and improving operational efficiency
- Improve financial profile
Industry Outlook
Trend in domestic CV industry
Between fiscals 2018 and 2024, domestic CV sales logged a CAGR of 2.1%. The CV industry exhibited a noteworthy recovery in fiscal year 2023, achieving a remarkable growth rate of 35% over fiscal 2022, albeit on a low base, and reaching 96% of the pre-pandemic levels observed in fiscal year 2019. This resurgence can be attributed to pent-up replacement demand, improved transporter profitability, and the pick-up in capex that had been hampered during the preceding 2-3 years due to economic stagnation and the disruptive impact of the pandemic.
In fiscals 2018 and 2019 witnessed strong recovery as compared to 2016-17 and a healthy 18-20% growth, supported by the government’s focus on road and housing infrastructure development. In fiscal 2020, the industry witnessed a sharp de-growth of 28% on a high base of fiscal 2019, due to inventory adjustment on account of the transition to BS-VI emission norms. In fiscal 2020, demand for buses was impacted due to safety regulations (emergency exit doors, fire detection and suppression, escape hatches and emergency lighting).
The pandemic brought the entire economy to a grinding halt when a nationwide lockdown was declared to contain its spread, thus affecting the profitability and sustainability of transporters due to lack of availability of freight demand. The industry, however, gained momentum afterwards as consumption demand and industry activity started gaining pace.
Segmental trends
The commercial vehicle (CV) sales for fiscal year 2024 witnessed almost flat industry over fiscal 2023. This trajectory is underpinned by increased government spending and replacement demand. In FY2023, the CV industry exhibited remarkable recovery with a growth rate of 34% over fiscal 2022, reaching 96% of pre-pandemic levels.
The Medium and Heavy Commercial Vehicle (MHCV) segment witnessed a stable performance in the fiscal year 2024. In the fiscal year 2024, the bus sales sector witnessed substantial growth of 27% over fiscal 2023. This growth is anticipated to be bolstered by robust replacement demand; wherein older buses will be replaced with newer ones.
In fiscal year 2024, the MHCV segment exhibited a de-growth of 3% over the fiscal year 2023. In fiscal year 2023, MHCV sales recorded a growth of 40%, this recovery brought MHCV sales to approximately 90% of the level recorded in fiscal year 2019, a notable milestone. The resurgence in economic activities across various sectors played a pivotal role in driving this recovery. Tractor trailers were the fastest-growing category in the MHCV segment, witnessing a growth of 71% CAGR between fiscals 2021 and 2024, followed by the MCV haulage and MAV haulage segments at 50% CAGR and 32% CAGR, respectively. Tippers grew at 14% CAGR, whereas ICVs clocked 1% growth during the same period.
The bus sales sector witnessed an extraordinary CAGR of 75% during fiscal 2021-2024 period and in fiscal 2024, it witnessed a growth of 27% over fiscal 2023. However, it is essential to contextualize this growth as it was achieved on a low base, indicating a significant decline in bus sales during the previous fiscal year (fiscal 2023). The sharp growth in fiscal 2024 was primarily propelled by the resumption of schools and offices, along with a robust recovery in the tourism sector, contributing to a strong rebound in bus sales.
Replacement demand
LCVs are typically replaced every 6-8 years, and vehicles purchased between fiscal years 2011 and 2013 were due for replacement in fiscal year 2019.. This strategic replacement cycle contributed to stable sales in fiscal year 2019 and prevented a major decline in LCV sales in fiscal year 2020 after robust sales in fiscal years 2018 and 2019. The postponement of replacement volumes since fiscal year 2020 has further supported LCV demand volumes in fiscal year 2024 and is expected to sustain growth in fiscal year 2025.
JNNURM – I (Jawaharlal Nehru National Urban Renewal Mission) buses, sold during the peak seasons of fiscals 2011 and 2012, are expected to be replaced once funds are released by the central and state governments for purchase. This replacement is expected to gain pace now, aiding long-term MCV bus growth. The government’s mandate to replace private vehicles (such as vans) with school buses in some cities, is also expected to augur well.
Also, the centre’s scrappage policy is likely to attract 6,00,000-6,50,000 MHCV vehicles for scrapping there by driving the replacement demand.
Scrappage policy
MoRTH, in August 2018, considered incentivizing the scrapping of vehicles sold before April 2005 (15 years old). After deliberations on the modalities on implementation of the norm, the government currently aims to promote vehicle scrapping by exempting registration charges for truck purchases made after scrapping older trucks. To incentivize scrappage of older vehicles, the government has increased the registration charges for older vehicles and increased stringency of fitness tests. These will entail higher costs for owners of older vehicles. Hence, by disincentivizing the ownership of older vehicles, the government expects the scrappage of older vehicles to increase. We expect the impact of the norms to be limited on additional scrappage (apart from vehicles scrapped in the normal course of business). If, through higher incentives from the government and OEMs, transporters are able to be incentivized to scrap vehicles older than 15 years, we expect 6,00,000-6,50,000 MHCVs to be available for scrapping.
Outlook of the Indian CV industry
In recent years, the CV industry has evolved significantly under the influence of several factors. Sweeping changes have impacted not only the industry, but major players, particularly transporters who form the backbone of the sector. Some of the key events are listed below:
Demonetisation, the withdrawal of high-denomination currency notes in 2016, materially impacted the CV industry by prompting a shift towards digital transactions, which increased transparency and accountability in the sector.
Introduction of the GST in 2017 revolutionised the way goods were transported across state borders. It streamlined logistics operations by removing state-level taxes and entry barriers, reducing transit time and costs.
The adoption of BS-VI emission norms in 2020 pushed the CV industry towards producing cleaner and more environmentally friendly vehicles. While it posed initial challenges due to the need for technological upgrades, it has since encouraged innovation and the development of greener transportation solutions.
The enforcement of stringent safety regulations has been a crucial aspect of the CV industry’s evolution, leading to the incorporation of advanced safety features in CVs, reducing the risk of accidents and improving road safety.
The pandemic-induced lockdowns, supply-chain disruptions and decrease in demand for transportation services disrupted business operations. However, it also accelerated the adoption of digital solutions, remote monitoring and contactless delivery methods, making the CV industry more resilient.
These changes have influenced the profitability and sustainability of transporters, who play a pivotal role in the CV industry. Though challenges did arise from these transformative events, such as the initial investment required for BS-VI compliance or the pandemic-induced disruptions, they have also opened up new opportunities for growth and efficiency.
One particularly significant change over the past few years is the evolving preference among transporters for larger trucks, driven by their superior cost economics, as detailed below.
Shifting preferences: Historically, a diverse range of vehicle sizes catered to varied transportation needs. However, now transporters increasingly favour larger trucks over smaller ones. The shift in preference is underpinned by several compelling factors.
Cost efficiency: Larger trucks are more cost efficient. They can carry more goods in a single trip, leading to lower fuel consumption per unit of cargo transported and significantly reduced labour costs, as fewer drivers are required to move the same volume of goods. The economies of scale associated with bigger trucks have made them an attractive choice for transporters looking to maximise their profit margins.
Versatility: Larger trucks are often designed to be versatile, capable of transporting a wide variety of cargo types, from perishable goods to heavy machinery. This allows transporters to diversify their services, tap into multiple markets and adapt to changing customer demands more effectively.
Competitive advantage: Transporters recognise that operating larger trucks can provide a competitive edge. The ability to handle larger volumes of cargo can lead to stronger negotiations with shippers and better utilisation of resources, ultimately contributing to a more profitable business model.
Transformation in market dynamics is notably reflected in the sales volume of trucks, characterised by the increasing prominence of higher tonnage segments that have steadily expanded their market share. Growth has, in turn, led to a gradual erosion of the market share of smaller tonnage vehicles. This can be seen from the quarterly sales figures of MAVs and tractor trailers:
The CV market is expected see a constant rise in vehicle tonnage, which is expected to significantly change the industry’s landscape. Market dynamics are changing significantly as the industry’s average payload rises, especially increasing intensity of trailer axles for CV trucks.
The driving force behind this transformation is the escalating demand for higher tonnage vehicles. Heavy-duty trucks, weighing 42-tonne or 48-tonne, are becoming more commonplace on the roads. Unlike their lighter counterparts, these massive vehicles require a greater number of parts and components to operate. This fundamental shift translates into a notable increase in production costs for these CV trucks. To put this into perspective, a typical 19-tonne or 28-tonne truck may consist of 2-3 axles, while a 42-tonne or 48-tonne truck can have as many as five axles.
The CV industry recovered spectacularly in fiscal 2023, with a 34% growth rate and 0.6% in fiscal 2024, reaching 96% of pre-pandemic levels of fiscal 2019. Increased government spending, robust replacement demand, and strong end-user sectors such as construction and mining are expected to support growth.
Light commercial vehicle goods (LCV) sales de-grew by -3% in fiscal 2024, supported by sustained replacement demand with rising competition from electric three-wheelers, especially in the sub one tonne segment restricting further expansion. In fiscal 2023, LCV sales recorded impressive growth of 23%, rebounding to 99% of pre- pandemic levels. The surge in sales can be attributed to robust replacement demand, especially in the sub-one- tonne category, which was deferred due to economic challenges and the pandemic.
Over the long-term horizon, domestic CV sales are projected to record a 4.5-6.5% CAGR between fiscals 2024 and 2029, led by a 5-7% CAGR in the LCV segment, 3-5% CAGR in the M&HCV segment and 5-7% CAGR in the bus segment.
The commercial vehicle (CV) sales for fiscal year 2025 are expected to grow marginally by 0-2%. Increased public spending and strong replacement demand support this trajectory. This upward trend is expected to be aided by important end-user industries, especially mining and construction, which are expected to maintain their robust demand.
MHCVs set to thrive in the coming five years
The MHCV industry is expected to grow significantly, with a compound annual growth rate (CAGR) of approximately 2-4% projected from fiscal year 2024 to fiscal year 2029.
Long-term MHCV sales are likely to be driven by several factors, including the country’s improving industrial activity, consistent agricultural output, and the government’s continued emphasis on infrastructure development. However, volume growth may be limited due to efficiencies gained from the implementation of the Goods and Services Tax (GST), the development of improved road infrastructure, and the commissioning of the dedicated goods corridor (DFC). Nonetheless, the industry remains on a promising growth trajectory in the coming years.
Over the next five years (fiscal 2024-2029), industry GVA is expected to be robust, driven by the government’s emphasis on “Make in India.” Furthermore, infrastructure improvements and higher-than-expected corporate spending are expected to support the capex cycle after fiscal 2024.
Bus demand to witness strong growth over the next five years
Domestic bus sales are expected to grow at a CAGR of 1-3% between fiscal years 2024 and 2029. Increased demand for inter-city/state travel, aided by improved road infrastructure, and higher personal disposable incomes will drive growth. The unregulated segment, which primarily serves demand from schools, businesses, and intercity travel by private operators, will continue to be the largest end-user. However, the implementation of metro-rail and monorail in several cities would have an impact on future bus sales growth. In terms of penetration (buses per 1,000 people), India ranks last among the countries studied, with 1 bus per 1,000 people and a 35% urbanization rate.
Emerging trends in the CV ecosystem Alternate fuels
The adoption of alternate fuels in commercial vehicles has gained significant momentum in recent years, driven by the need for low emission solutions to address environmental concerns, reduce the dependence on fossil fuels and achieve zero emission transportation. Three prominent alternatives that have garnered attention are electric vehicles (EVs), natural gas and hydrogen-powered vehicles.
Hydrogen is also being explored as an alternative fuel for commercial vehicles through fuel cell and hydrogen ICE powertrains. Hydrogen-powered trucks and buses offer a long range and faster refuelling times compared with EVs. They emit only water vapour as a by-product, making them attractive from an emission standpoint. However, challenges such as the high cost of production, transportation and infrastructure development hinder widespread adoption. Furthermore, MoRTH has framed draft rules for approval of hydrogen ICE vehicles under M and N category and MNRE has introduced the National Green Hydrogen Mission to incentivise commercial production of green hydrogen and make India a net exporter of the fuel.
Truck aggregation
The truck aggregation trend has witnessed significant growth over the past few years. This model involves online platforms that connect truck owners and transporters with businesses requiring freight services. It has transformed the traditional trucking industry by enhancing efficiency, reducing empty miles, and providing better load utilisation. Truck aggregation platforms such as BlackBuck, Rivigo, and TruckSuvidha have gained prominence by streamlining logistics through digital solutions.
Telematics and connectivity
Telematics involves the integration of telecommunications and informatics to enable real-time communication and data exchange between vehicles, fleet managers and centralised systems. Commercial vehicles are equipped with a global positioning system (GPS), sensors and communication devices, enabling fleet operators to monitor real-time parameters such as location, fuel consumption, speed and driver behaviour.
Electrification in HCV goods vehicles
EV adoption in the HCV segment is expected to be negligible in the near future as operational profile makes them highly expensive. Further, the current charging infrastructure is not suitable for larger HCV batteries, which will make electric adoption unviable for some time.
Electrification in passenger vehicles (buses)
Due to the government support through FAME and focus on quicker adoption of EVs in public transport, there has been a significant increase in electric bus sales in the last couple of years. Operational profiles of buses with fixed routes and regular stops make them suitable for charging at pre-determined intervals and specific locations. However, sales of electric buses are unlikely to meet the target in fiscal 2021 due to the pandemic and hence we expect the subsidy amount to get carried over to the coming years.
Tractor industry: Review and outlook Review
Historic domestic tractor industry
In fiscal 2023, tractor sales grew 12.2% on-year to an all-time high of ~945,000 units. Healthy crop prices, sound reservoir levels owing to above-normal monsoon, higher MSPs announced by the government and better rabi acreage, all led to positive farmer sentiment. Healthy festival demand because of various schemes and discounts supported the retail growth momentum.
In fiscal 2024, domestic tractor sales dropped by 7.4% on-year to ~875,724 units, on account of lower reservoir levels and negative farmer sentiments. Negative farmer sentiments also impacted the festive demand, with sales in the festive months September, October, and November for fiscal 2024 – being lower by 5.8% on-year as compared to the same period last fiscal.
A large part of domestic tractor sales is driven by replacement demand. The typical holding period for a tractor is 6-9 years. Most of the tractors in the country is replaced within 7-8 years. Of the domestic demand, 50-60% constitute replacement demand. In states with high penetration of tractors, such as Punjab and Haryana, the replacement demand accounts for 70-80% of total sales. On the other hand, states with lower farmer incomes than that in Punjab and Haryana have a lengthier replacement cycle (higher age tractors) vs industry average.
PMGSY completion trend
The Pradhan Mantri Gram Sadak Yojana (PMGSY) is a one-time special intervention to provide rural connectivity, by constructing a single all-weather road, to the eligible unconnected habitations in the core network with a population of 500 persons and above (Census 2001) in plain areas.
Despite the challenges, the progress under PMGSY has been satisfactory. The vertical-wise details of achievement under the PMGSY (overall) are as follows:
Vertical | Sanctioned | Completed | ||||
No of roads | Road length (in km) | No of bridges | No of roads | Road length (in km) | No of bridges | |
PMGSY-I | 164609 | 644874 | 7461 | 163440 | 624442 | 7126 |
PMGSY-II | 6679 | 49834 | 759 | 6567 | 49016 | 746 |
RCPLWEA | 1347 | 12227 | 705 | 902 | 9247 | 422 |
PMGSY-III | 15219 | 116801 | 2945 | 9564 | 83293 | 784 |
Total | 187854 | 823738 | 11870 | 180473 | 765999 | 9078 |
Outlook of Indian tractor industry
CRISIL MI&A Consulting projects domestic tractor sales to increase at a steady pace over fiscals 2024 to 2029, factoring 1-2 years of erratic monsoon, with healthy sales forecast for the remaining years.
During fiscals 2019 to 2024, the industry had registered a 2% CAGR, owing to healthy sales in fiscals 2021 and 2023.
Growth up to fiscal 2029 will be on the back of low tractor penetration in the country (three tractors per 100- hectare area), government’s focus on improving farm incomes through various schemes, promotion of farm mechanisation, and investments to improve rural infrastructure.
Key growth drivers
Farm mechanisation improving across India
Although farm mechanisation has been increasing in India, its progress across states varies widely. The northern states of Punjab, Haryana and Uttar Pradesh have already achieved high levels of mechanisation, with sales driven primarily by replacement demand.
The pace of mechanisation, though, is slower in eastern states, thus providing potential for sales growth.
Increasing non-farm usage of tractors
Farmers primarily purchase tractors for agricultural operations, but also use these for commercial purposes. Taking into consideration the short period that tractors are deployed on farms, farmers look for alternate uses such as renting it out to other farmers or to rural contractors involved in construction activities.
Tractors are also used in mining, construction and haulage activities. Currently, non-farm usage accounts for 18- 23% of demand for tractors.
As tractors are used only for short periods on farming activities, it is not economically viable for farmers to deploy them solely for farming purposes. Hence, going forward, tractors rural construction and transportation will also gain prominence in tractor usage, apart from agriculture.
Commercial demand for tractor account for 16-23% of overall tractor demand.
Kross Business Data
Kross Verticals
- M&HCV components and assemblies:
- Trailer Axles and Suspensions
- Axle Shafts
- Coupling Flanges
- Differential Spiders
- Bevel Gear Assemblies
- Bell Crank Assemblies
- Trunion Pins
- Gear Joint Assemblies
- Clutch Release Forks
- Steering Joints
- Universal Cross
- Input and Output shafts
- Reaction Plate and Carrier Annulus
- Planet Carrier Assembly
- Rear End Spindles
- ABS Pole wheels
- Interaxle rings
- Anti Roll bar and stabilizer bar assembly
- Tractor Components and assemblies:
- Spindle Front axles
- Control Spring Assembly
- Arm rams and Hydraulic lift arms
- PTO Shafts
- Hydraulic Lift shafts
Kross Product wise break-up
(in ₹ million, except %)
Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | |||
Amount | % of revenue | Amount | % of revenue | Amount | % of revenue | |
Trailer axle and suspensions | 2,690.50 | 43.38% | 1,628.22 | 33.32% | 668.96 | 22.49% |
Tractor components | 559.6 | 9.02% | 592.73 | 12.13% | 546.52 | 18.37% |
Truck components | 2,821.56 | 45.49% | 2,415.24 | 49.43% | 1,561.96 | 52.51% |
Other Component/ Service | 130.85 | 2.11% | 250.1 | 5.12% | 197.11 | 6.63% |
(in ₹ million, except %)
Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | |||
Amount | % of revenue | Amount | % of revenue | Amount | % of revenue | |
M&HCV | 5,512.06 | 88.87% | 4,043.46 | 82.75% | 2,230.92 | 75.00% |
Farm Equipment | 559.6 | 9.02% | 592.73 | 12.13% | 546.52 | 18.37% |
Other Component/ Service | 130.85 | 2.11% | 250.1 | 5.12% | 197.11 | 6.63% |
Total | 6,202.50 | 100.00% | 4,886.28 | 100.00% | 2,974.55 | 100.00% |
(in ₹ million, except %)
Key products | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | |||
Amount | % of revenue | Amount | % of revenue | Amount | % of revenue | |
Trailer axle and suspensions | 2,690.50 | 43.38% | 1,628.22 | 33.32% | 668.96 | 22.49% |
Axle shafts | 663.45 | 10.70% | 577.04 | 11.81% | 387.68 | 13.03% |
Coupling flanges | 519.26 | 8.37% | 436.89 | 8.94% | 275.81 | 9.27% |
Anti roll bar and stabiliser bar | 510.33 | 8.23% | 396.26 | 8.11% | 175.13 | 5.89% |
Bell crank assembly | 282.21 | 4.55% | 279.08 | 5.71% | 198.54 | 6.67% |
Trunion pin | 88.86 | 1.43% | 97.13 | 1.99% | 81.73 | 2.75% |
Differential spiders | 104.7 | 1.69% | 126.16 | 2.58% | 101.41 | 3.41% |
Tractor parts | 550.78 | 8.88% | 592.73 | 12.13% | 546.52 | 18.37% |
Kross Revenue contribution from Geography presence
(in ₹ million, except %)
Geography | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | |||
Amount | % of revenue | Amount | % of revenue | Amount | % of revenue | |
India | 6,131.53 | 98.86% | 4,871.29 | 99.69% | 2,948.34 | 99.12% |
Outside India | 70.97 | 1.14% | 14.99 | 0.31% | 26.21 | 0.88% |
Kross Customer dependency
(in ₹ million, except %)
Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | |||
Amount | % of revenue | Amount | % of revenue | Amount | % of revenue | |
Top 3 customers | 3,086.03 | 49.75% | 2,467.77 | 50.50% | 1,620.91 | 54.49% |
Top 5 customers | 4,095.19 | 66.02% | 3,340.95 | 68.37% | 2,096.27 | 70.47% |
Kross Machinery/Plants/Factory
Facility name and address | Products Manufactured |
Unit I Plot No M-4, Phase-VI, Adityapur Industrial Area, Gamharia, Jamshedpur | Coupling flanges Differential spiders Stabilizer bar assembly Input & output shafts Adapter ring gears Carrier annulus Universal joints Reaction plates Clutch release forks Yokes Gear joint assemblies Gear shifter forks Arm rams PTO shafts Lift shafts Spindle front axles Arm Hydraulic lifts Shaft lower links Control spring assembly Ring gear |
Unit II C-78, Phase-III, Adityapur Industrial Area, Gamharia, Jamshedpur | No finished products are manufactured at this unit |
Unit III B 30-31 & C-78, Phase-III, Adityapur Industrial Area, Gamharia, Jamshedpur | Axle shafts |
Unit IV M2(P) 4th Phase, Adityapur Industrial Area, Gamharia, Jamshedpur | Trailer axle & suspension Planet carrier Bell crank assemblies Pole wheels Bevel gear assembly Anti roll bars Rear end spindles Trunion pin |
Unit V Plot no. NS-06, Phase 5, Adityapur Industrial Area, Gamharia, Jamshedpur | No finished products are produced at this facility. Hubs and brake drums are produced as subassemblies at this facility for trailer axles and suspension systems |
Kross Capacity Utilisation
Facility | Product | Three month period ended June 30, 2024 | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | ||||||||
Installed Capacity (in number of units) | Production (in number of units) | Capacity Utilization (%) | Installed Capacity (in number of units) | Production (in number of units) | Capacity Utilization (%) | Installed Capacity (in number of units) | Production (in number of units) | Capacity Utilization (%) | Installed Capacity (in number of units) | Production (in number of units) | Capacity Utilization (%) | ||
Unit I | Coupling Flanges | 195,000 | 148,166 | 75.98% | 780,000 | 654,731 | 83.94% | 750,000 | 593,623 | 79.15% | 576,000 | 432,180 | 75.03% |
Differential Spiders | 65,000 | 40,178 | 61.81% | 260,000 | 181,632 | 69.86% | 260,000 | 216,224 | 83.16% | 228,000 | 192,982 | 84.64% | |
Unit III | Axle Shafts | 67,500 | 45,053 | 66.75% | 270,000 | 221,771 | 82.14% | 240,000 | 195,050 | 81.27% | 216,000 | 172,330 | 79.78% |
Unit IV | Trailer Axle & Suspension | 15,000 | 10,145 | 67.63% | 60,000 | 40,929 | 68.22% | 30,500 | 26,479 | 86.82% | 15,000 | 13,190 | 87.93% |
Bell Crank Assembly | 10,500 | 4,578 | 43.60% | 42,000 | 33,051 | 78.69% | 38,400 | 32,612 | 84.93% | 28,000 | 23,726 | 84.74% | |
Anti Roll Bars & Stabilizer Bar Assembly | 25,000 | 19,260 | 77.04% | 100,000 | 81,303 | 81.30% | 72,000 | 50,200 | 69.72% | 45,000 | 33,600 | 74.67% |
Competition
While there are several producers of varying size serving certain segments or sub-segments of our customer base, across M&HCV and farm equipment segments, and there are also several producers of varying size manufacturing
certain of the products that we sell, in various geographical markets. We believe that we have no peers that operate in the full spectrum of our customer base, geographical market, product range and price points.
There are no standard methodologies to assess this industry as far as we are aware, we believe that it is difficult to predict how the competitive landscape of our business will develop over the long term. General competitive factors in the market, which may affect the level of competition over the short and medium term, include vulnerability to overall macroeconomic factors, time to market, availability of after-sale and logistics support, product features, design, quality, price, delivery, warranty, general customer experience and relationships between producers and their customers.
Kross Peer companies comparison
Name of Company | Face Value (₹ per share) | Revenue from Operations (in ₹ million) | EPS (₹ per share) | NAV (₹ per share) | P/E | RONW (%) |
Kross Limited | 5 | 6,202.50 | 8.3 | 27.14 | 28.9 | 30.57% |
Ramkrishna Forgings Limited | 2 | 39,548.83 | 20.27 | 148.48 | 46.55 | 12.72% |
Jamna Auto Industries Limited | 1 | 24,267.73 | 5.15 | 22.64 | 24.3 | 22.74% |
Automotive Axles Limited | 10 | 22,291.74 | 109.95 | 579.63 | 17.05 | 18.97% |
GNA Axles Limited | 10 | 15,062.62 | 23.28 | 186.69 | 17.32 | 12.47% |
Talbros Automotive Components Limited | 2 | 7,782.67 | 17.82 | 87.02 | 19.03 | 20.47% |
(in ₹ million, except %)
Metric | Kross Limited | Ramkrishna Forgings Limited | Jamna Auto Industries Limited | Automotive Axles Limited | GNA Axles Limited | Talbros Automotive Components Limited |
Revenue from Operations | 4,886.28 | 31,928.95 | 23,253.18 | 23,237.01 | 15,829.34 | 6,471.83 |
Growth in revenue from operations | 64.27% | 37.61% | 35.36% | 55.89% | 24.59% | 12.12% |
Gross Profit | 1,989.19 | 15,823.62 | 7,753.12 | 6,549.59 | 5,328.99 | 2,960.60 |
Gross Margin | 40.71% | 49.56% | 33.34% | 28.19% | 33.67% | 45.75% |
EBITDA | 575.22 | 6,923.19 | 2,614.00 | 2,574.63 | 2,326.86 | 872.97 |
EBITDA Margin | 11.77% | 21.68% | 11.24% | 11.08% | 14.70% | 13.49% |
Profit for the Year | 309.31 | 2,481.08 | 1,683.68 | 1,620.29 | 1,302.08 | 555.77 |
PAT Margin | 6.32% | 7.76% | 7.21% | 6.96% | 8.22% | 8.51% |
Return on Equity | 30.29% | 18.77% | 21.47% | 21.34% | 18.22% | 15.12% |
Return on Capital Employed | 27.51% | 17.85% | 28.47% | 28.07% | 20.22% | 17.41% |
Debt/Total Net Worth | 0.86 | 0.99 | 0.02 | 0.01 | 0.28 | 0.24 |
Gross Fixed Assets Turnover Ratio | 3.49 | 1.2 | 3.17 | 4.79 | 2.17 | 1.82 |
Revenue from Sale of products and services (In India) | 4,871.29 | 19,404.56 | 22,819.79 | 23,235.91 | 7,206.59 | 4,624.82 |
Revenue from Sale of products and services (Outside India) | 14.99 | 12,524.39 | 433.38 | 1.1 | 8,389.14 | 1,847.01 |
Revenue from Sale of products and services | 99.69% | 60.77% | 98.14% | 100.00% | 46.21% | 71.46% |
Revenue from Sale of products and services (Outside India) | 0.31% | 39.23% | 1.86% | 0.00% | 53.79% | 28.54% |
Kross SWOT ANALYSIS
- Strengths
- Diverse Product Portfolio: Kross Ltd. offers a wide range of products including trailer axles, suspension assemblies, axle shafts, companion flanges, and more. This diversity helps mitigate risks associated with dependency on a single product line.
- Established Client Base: The company has long-term relationships with major clients like Ashok Leyland and Tata International. These relationships provide a stable revenue stream and reduce the risk of client turnover.
- Backward Integration: Kross Ltd. has integrated design, process engineering, forging, casting, and machining capabilities. This allows greater control over production processes, timelines, pricing, and quality.
- Strong Financial Performance: The company has shown significant growth in revenue and profit, with a 27% CAGR rise in revenue from operations and a 54.5% increase in profit between FY22 and FY24.
- Weaknesses
- Revenue Concentration: A significant portion of Kross Ltd.’s revenue comes from its top three clients. This heavy reliance on a few clients poses a risk if any of these relationships were to deteriorate.
- Geographic Concentration: All five of Kross Ltd.’s manufacturing facilities are located in Jharkhand. This geographic concentration exposes the company to operational risks from regional disruptions.
- Opportunities
- Growing Automotive Sector: The demand for commercial vehicles is projected to rise, which could benefit Kross Ltd. as it caters to the M&HCV segment.
- Expansion into New Markets: With its strong product portfolio and established client base, Kross Ltd. has the potential to expand into new geographic markets and diversify its revenue streams.
- Technological Advancements: Investing in new technologies and innovations could enhance product quality and operational efficiency, providing a competitive edge.
- Threats
- Cyclical Industry: The automotive parts industry is cyclical and subject to economic fluctuations. Any downturn in the economy could negatively impact Kross Ltd.’s business.
- Intense Competition: The company faces stiff competition from other organized players in the industry³. This competition could affect market share and profitability.
- Regulatory Changes: Changes in regulations related to the automotive industry could impact operations and increase compliance costs.
Kross Business risk factors
- Customer concentration risk – top five customers contributed a significant portion (more than 66.00% in each of the previous three Fiscals) of our revenues. The loss of a major customer or reduction in demand for our products from any of our major customers may adversely affect our business, financial condition, results of operations and prospects.
- Product concentration risk – We derive a portion of our revenue from the sale of trailer axle and suspension assemblies for medium and heavy commercial vehicles (“M&HCV”). Any reduction in demand for our key products on account of regulatory changes or changes in technologies including but not limited to shift in renewable/green energy would have a material adverse effect on our business, financial condition, results of operations and cash flows.
- Geographical market concentration risk – Nearly all of our revenues from operations are derived on sales made within India (more than 98.00% in Fiscal 2024 and more than 99.00% in each of Fiscal 2023 and Fiscal 2022). Our business is therefore significantly affected by fluctuations in general economic activity in India.
Kross Financials
Kross Key Financial Ratios
Ratios | March 31, 2024 | March 31, 2023 | March 31, 2022 | March 31, 2021 |
Current Ratio | 1.37 | 1.36 | 1.23 | 1.28 |
Debt-equity Ratio | 0.8 | 0.86 | 1.19 | 1.39 |
Debt Service Coverage Ratio | 2.15 | 1.52 | 1.74 | 1.47 |
Return on investment | 21.64% | 21.52% | 12.37% | 8.50% |
Return on Equity Ratio | 36.06% | 35.45% | 18.39% | 8.29% |
Inventory turnover Ratio | 8.27 | 8.88 | 6.51 | 3.92 |
Trade Receivables turnover Ratio | 7.67 | 9.57 | 6.52 | 4.87 |
Trade payables turnover Ratio | 12.85 | 15.94 | 13.92 | 8.37 |
Net capital turnover Ratio | 12.02 | 15.85 | 14.01 | -7.9 |
Net profit Ratio | 0.07 | 0.06 | 0.04 | 0.03 |
Return on Capital employed | 28.15% | 27.51% | 14.97% | 10.03% |
Kross Key Performance Indicators
(in ₹ million, except %)
Particulars | 2024 | 2023 | 2022 |
Revenue from Operations | 6,202.50 | 4,886.28 | 2,974.55 |
Gross Profit | 2,643.47 | 1,989.19 | 1,371.69 |
Gross Margin (%) | 42.62% | 40.71% | 46.11% |
EBITDA | 807.58 | 575.22 | 295.48 |
EBITDA Margin (%) | 13.02% | 11.77% | 9.93% |
Profit for the Year | 448.81 | 309.31 | 121.69 |
PAT Margin (%) | 7.22% | 6.32% | 4.09% |
Return on Equity (%) | 30.57% | 30.29% | 16.81% |
Return on Capital Employed (%) | 28.15% | 27.51% | 14.97% |
Debt/Total Net Worth (in times) | 0.80 | 0.86 | 1.19 |
Gross Fixed Assets Turnover Ratio | 3.69 | 3.49 | 2.43 |
Revenue from Sale of products and services (In India) | 6,131.53 | 4,871.29 | 2,948.34 |
Revenue from Sale of products and services (Outside India) (₹ million) | 70.97 | 14.99 | 26.21 |
Total Revenue from Sale of products and services | 6,202.50 | 4,886.28 | 2,974.55 |
Revenue from Sale of products and services (In India) (%) | 98.86% | 99.69% | 99.12% |
Revenue from Sale of products and services (Outside India) (%) | 1.14% | 0.31% | 0.88% |
Kross Assets & Liabilities
(in ₹ million)
Particulars | March 31, 2024 | March 31, 2023 | March 31, 2022 |
Assets | |||
Non-current assets | 1,178.46 | 990.85 | 843.67 |
current assets | 2,341.59 | 1,514.87 | 1,134.57 |
Total Assets | 3,520.04 | 2,505.72 | 1,978.24 |
Equity and Liabilities | |||
equity | 1,468.05 | 1,021.06 | 724.04 |
Non-current liabilities | 338.78 | 373.06 | 332.84 |
current liabilities | 1,713.22 | 1,111.60 | 921.36 |
Total Equity and Liabilities | 3,520.04 | 2,505.72 | 1,978.24 |
Kross Profit & Loss
(₹ in million except percentage data)
Particulars | Financial Year ended 2024 | Financial Year ended 2023 | Financial Year ended 2022 |
Revenue from Operations | 6,202.50 | 4,886.28 | 2,974.55 |
Gross Profit | 2,643.47 | 1,989.19 | 1,371.69 |
Gross Margin (%) | 42.62% | 40.71% | 46.11% |
EBITDA | 807.58 | 575.22 | 295.48 |
EBITDA Margin (%) | 13.02% | 11.77% | 9.93% |
Profit for the Year | 448.81 | 309.31 | 121.69 |
PAT Margin (%) | 7.22% | 6.32% | 4.09% |
Kross Cash Flow
Particulars | 2024 | 2023 | 2022 |
Net cash flow from/ (used in) operating activities | 82.51 | 417.46 | 175.38 |
Net cash flow from/(used in) investing activities | (304.04) | (187.98) | (119.96) |
Net cash flow from/ (used in) financing activities | 148.10 | (105.73) | (55.14) |
Net increase/decrease in cash and cash equivalents | (73.43) | 123.75 | 0.28 |
Cash and cash equivalent at the beginning of the year | 129.98 | 6.23 | 5.95 |
Cash and cash equivalents at the end of the year | 56.55 | 129.98 | 6.23 |
Kross Capital structure
(in ₹ million, except %)
Particulars | March 31, 2024 |
Borrowings | |
Current borrowings | 814.45 |
Non-current borrowings | 356.59 |
Total borrowings | 1,171.04 |
Equity | |
Equity share capital | 270.46 |
Other equity | 1,197.59 |
Total Equity | 1,468.05 |
Total Capital | 2,639.09 |
Non-current borrowings/ Total equity | 0.24 |
Total Borrowings / Total Equity | 0.80 |
IPO Details
Kross IPO Details
Feature | Details |
---|---|
IPO Type | Mainline IPO |
Issue Size | ₹500 crore (₹250 crore fresh issue, ₹250 crore offer for sale) |
Price Band | ₹228 – ₹240 per share |
Face Value | ₹5 per share |
Minimum Lot Size | 62 shares (₹14,880) |
Retail Quota | 35% |
QIB Quota | 50% |
HNI Quota | 15% |
Subscription Period | September 9-11, 2024 |
Listing Date | September 16, 2024 (BSE & NSE) |
Object of the issue
Particulars | Estimated amount (in ₹ million) |
Funding of capital expenditure requirements of our Company towards purchase of machinery and equipment | 700.00 |
Repayment or prepayment, in full or in part, of all or a portion of certain outstanding borrowings availed by our Company, from banks and financial institutions | 900.00 |
Funding working capital requirements of the Company | 300.00 |
General corporate purpose | [●] |
Litigation involved in Kross
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