ZF Commercial Vehicle Control Systems India Limited (NSE: ZFCVINDIA) Q3 2026 Earnings Call dated Feb. 12, 2026
Corporate Participants:
Unidentified Speaker
Paramjit Chadha — Managing Director
Sweta Agarwal — Chief Financial Officer
Analysts:
Unidentified Participant
Anamalai Jayaraj — Analyst
Mukesh Saraf — Analyst
Mumuksh Mandlesha — Analyst
Nirali Gopani — Analyst
Presentation:
operator
Sa. Sam it. Ladies and gentlemen, you’re connected to ZF Commercial Vehicle Control Systems Limited Q3FY26 post results for earnings conference call. The conference call will begin shortly. Please stay connected. Ladies and gentlemen, good day. You have been connected to ZF Commercial Vehicle Control Systems India Limited Q3FY26 post results earning conference call. The conference call will begin shortly. Please stay connected. Sam.
operator
Ladies and gentlemen, good day and welcome to ZF Commercial Vehicle Control Systems India Limited Q3FY26 post results earning conference call Hosted by Bartleywala and Karani Securities India Private Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anamalai Jayaraj. Thank you. And over to you sir.
Anamalai Jayaraj — Analyst
Thank you. Good afternoon. Thank you for joining us today. I welcome you all for the ZF Commercial Vehicle Control Systems India limiters earnings calls to brief under Q3FY 202526 quarterly earnings which will be presented by the management team. Your host today from head of Commercial Vehicle control Systems India Limited are Mr. Paranjit Singh Sadha, Managing Director Mishweta Agarwal, CFO Mr. Shankar Ven, Head of OE Sales and Ms. Yamutu Lakshmi, Company Secretary. I will now hand over the call to Mr. Parandek Sadh who will provide further insight into the results. Over to you sir.
Paramjit Chadha — Managing Director
Thank you. Good to all of you. I warmly welcome you all to General Commercial Vehicle Control System Limited’s third quarter results for the financial year 2025 26. Certain forward looking statements that we will make today are based on management’s good faith and expectations concerning future development. The actual results may differ materially from these expectations because of multiple factors. ZF Commercial Vehicle Control System India Limited results for the quarter ending 12-31-2025 were published on 02-10-2026. They are available on the website www.zdf.com under the ZDF CV India Investor Relations section. We hope that you have had an opportunity to go through them.
A transcript and recorded audio of this call will also be made available on the website www.under the ZF CV India Investor Relations section. I am happy to talk to you today as we give you an update about business of the company. We will start with the industry and economic updates. The global economy continues to demonstrate greater resilience than previously anticipated supported by easing uncertainties and broadly stable financial conditions. While trade flows are gradually normalizing and some market volatility persists, overall macroeconomic fundamentals remain steady. India’s growth trajectory remains robust. GDP expanded by 8.2% in Q2 2526 with GVA rising 8.1%.
This strong performance has been underpinned by solid domestic demand, healthy momentum in both industrial and services sectors, ongoing tax rationalization and front loaded public capital expenditure. High frequency indicators signal continued strength this past quarter reflecting resilient rural demand, improving urban consumption, firm investment activity and an uptick in manufacturing output. Looking ahead, positive agriculture prospects, benign inflation trends, strengthened corporate balance sheets and supportive monetary conditions are expected to sustain the growth momentum. GDP growth for 2526 is projected at 7.4%. Inflation has moderated sharply to multi year lows driven by broad based decline in both food and coal components.
For 2526 inflation is projected at 2% supported by favorable supply conditions and moderating global commodity prices. Overall, the outlook for both growth and inflation trend remains balanced with risk contained and domestic fundamentals continuing to prove a strong foundation for sustained economic performance. This some data is taken from Reserve bank of India press release rbi.org in Let Us Talk about Indian commercial vehicle industry basically more than 6 ton commercial vehicles. The overall CV industry has gained momentum in Q3 supported by strong economic activity driven by GST reforms. Also RBI repo rate cuts, rising demand, improved boots movement recorded 6.1% growth billion ton kilometer in the calendar year of 2025.
Over the last year with the seawee more than 6 ton segment growing at an even stronger rate of 11% on the quarterly basis, the seaweed more than 6 ton segment registered 20.6% growth in Q3 and model mix largely remained same as last year with a marginal change in the bus production. Looking at the truck segment. In the truck segment growth is supported by several favorable factors and is expected to continue in the upcoming quarter as well. With GST reforms effective September, increase in consumption demand directly boosting goods movement and in turn CV growth supported by tailwinds like repo rate cuts, this momentum is set to sustain industry growth.
Second aspect is increased government capital expenditures supported by strong infrastructure and construction activity along with the recent Union budget outlay 12.2 lakh crore that places strong emphasis on infrastructure expansion and freight corridor development. This will indirectly boost demand for truck production. The resumption of mining activity post monsoon along with government focus on developing rare earth corridors which further promote mining is expected to accelerate mining operations and stimulate demand growth in this segment. Looking at bus segment in line with the overall seaweed industry growth, the bus market also experienced robust expansion driven by strong demand from state transport units, the intercity segment and urban transport needs.
EV bus sales reached 1219 units in Q3 2526 supported by finalization of PME drive tenders and fresh government procurement orders. Looking at trailer segment while the medium and heavy duty trucks shown a strong growth migration toward multi axle vehicles fleet underutilization amid export declines the expansion of mega LPG pipeline which collectively triggered a short term production dip. However, with the government focus on infrastructure, this sector is expected to rebound. Looking at impact of this industry growth on OE sales for our company during Q3FY25 26, seaweed more than 6 ton production recorded a growth of 20.6% while our overall sale rose by 28.1%.
The strong performance enabled us to outperform the market by 7.5% primarily supported by following factors high EV bus production and increased market share among independent bus manufacturer for E compressor and EBS system. A sharp rise in ESC penetration driven by updated regulations effective September 2025 SOP of a new variant of exhaust brake wall in Q3 FY26 profitability improvement actions including price resetting of low margin products Looking ahead, the outlook for commercial vehicle industry remains positive with several indicators pointing to a sustained rebound. Improving market sentiment coupled with strong budgetary emphasis on infrastructure development, trade corridors and new initiatives such as strategic mineral corridors is expected to directly stimulate demand for heavy duty trucks.
Additionally, the growing focus on EV ecosystem and public mobility is accelerating demand for electric buses. In anticipation of this upswing and in alignment with the adoption of new technology trends, we are advancing strategic initiative aimed at strengthening our competitiveness and delivering long term value. Some of the key strategic initiatives are as follows. Increasing penetration of ESC is driving our focus on localization efforts to enhance and sustain market share across all customer segments. With government’s ongoing discussions on mandating low floor buses for city application, a significant increase in ECAAS penetration is expected. In response to this emerging demand, we have initiated efforts to localize ECAAs to strengthen and sustain our market position.
We aim to increase penetration of trailer ABS, trailer EVS and scalar EVO plug systems in line with AIs 113 trailer regulations and growing demand for safety and operational efficiency in the trailer fleets. Close collaborations with OEMS is enabling the expansion of AMT applications, effectively leveraging the segmental migration toward higher capacity engine that is driving increased AMT adoption. These developments reinforce our long term growth trajectory and underscore our strategic alignments with the future of commercial mobility. Looking at aftermarket in Q3FY25 26 our aftermarket sales reached 158 crore reflecting a strong 19.2% growth over the 132 crore recorded in the same quarter in last financial year.
This performance was driven by broad based momentum across key segments. A significant contributor to this growth was continued acceleration in retrofitment demand particularly from PSU oil and gas customers generating rupees 4.1 crore through trailer ABS EBS retro fitment programs. Our traditional product portfolio including air compressor, air processing units, actuators, AMT modulators and brake control system also saw increased penetration across markets supported by strengthening demand patterns. We also witness greater uplift from OES driven requirement primarily due to replacement demand arising from BS6 vehicles park expansion. The mining segment maintains its positive trajectory with higher equipment deployment driving strong sales of compressors and actuators.
Additionally, the expansion of our service footprint through seven new authorized service centers enhanced network accessibility and customer support. This strengthened infrastructure continued meaningfully to overall aftermarket growth by improving reach responsiveness and service reliability. Let us discuss about export of goods in Q3 financial year 202526 our export performance declined by 10.9% compared to the same period last year primarily due to volume reduction from the US market. Private tariff related cost pass throughs by OEMs to the end customer continued to adversely impact demand while the US market saw a drop. This was partially offset by improvement in the EU market.
Overall the combined market decline stood at 12.2%. Despite this, we outperformed the market by intensifying our focus on portfolio expansion across regions. While these factors created short term headwinds, the recent FTA agreement with the EU and indications of potential tariff reduction in US are expected to support demand recovery in the upcoming quarters. We remain fully committed to ramping up our capabilities to meet this anticipated growth. Along with this, the company has proactively advanced several strategic initiatives aimed at reinforcing future growth and recalibrating priorities. Notable achievements include the successful start of production for Actuator 4.0 and air compressor for additional global OEMs, strengthening our global customer footprint.
Concurrently, we continue to broaden and diversify our product portfolio to position ourselves for recovery and long term expansion. We also speak about export of services. Export of services grew by a robust 11.1% in Q3 FY 202526 compared to the corresponding quarter last year. This growth was driven by a sustained increase in engineering activities delivered from India to global centers. The continued expansion of these capabilities reinforces India’s position as a strategic engineering hub for ZF globally, underscoring the strength, scalability and technical depth of our talent base. We talk about now on ESG initiatives. Sustainability continues to remain a core strategic priority for the company and our focused effort are yielding meaningful recognition and impact across our operation.
Our Jamshedpur facility received first prize in the ACOMA Regional Trident Competition under the Safety Economic Improvement category, underscoring our commitment to building safer and more efficient workplaces. We also continue to advance energy conservation with several key initiatives delivering measurable benefits. A 200 cfm compressor Energy saving project supported by a leak arresting campaign is estimated to generate annual energy savings of approximately 50,000 units. The introduction of E fans in AHU has resulted in an additional reduction of around 20,000 units per annum. Our ESG leadership was further highlighted when we were invited to share our best practices at IIT Madras during the Accelerating Net Zero Pin Energy Efficiency Conference.
The event saw participation from more than 200 companies and our initiatives received strong appreciation from peers and industry stakeholders. These achievements reflect our continued commitment to sustainability, operational excellence and responsible growth, reinforcing our alignment with global environmental and safety standards. Some Updates about Engineering on engineering front, the company had successfully enabled start of production of E Compressor tail light for truck platform diameter 60 and 90 exhaust brake assembly product for major OEM 9 inch vacuum booster was launched for aftermarket Advanced driver assist system. ADAS test dummy was developed through institutional collaboration. One prestigious new product development excellent award from major OEM for significant contribution of ZF towards launch of advanced electronic braking system, electronic stability control, automated manual transmission compressor, air processing unit and axle products.
Advanced technology products demonstrated at Technology Day events organized by leading oem across India were also done on manufacturing updates. The company continues to ramp up production of advanced technology products from its new multi divisional manufacturing plant at Oragadam. Key products including E compressor and hydraulic ESCs, electronic stability control for E mobility, ASP air system protector cartridges for Indian OEMs and VLAN products such as actuators, brake chambers and automatic slack adjuster for both domestic and export market. New products such as PBA exhaust brake assembly, E Compressor light brake signal transmitter for Indian truck with trailer OEMs and expansion of current portfolio to aftermarket have been successfully launched.
Assembly lines have been upgraded in Yamshedpur, Lucknow and Pansanagar plant for manufacturing footprint capability resulting in improved delivery performance, flexibility and customer responsiveness as well as supporting our sustainability objectives through reduction of transportation emissions. The company continues to realize significant gains in productivity and quality through implementation of smart automation, robotic technologies, testing automation and leveraging digitalization in assembly and machining service. Let us talk about awards and recognitions. I am pleased to share that in Q3FY25 26 our lead of teams earned significant recognition across leading industry forums, securing four national level awards, four regional awards and nine state level awards.
Our teams achieved top honors in prestigious competition such as IMTMA Productivity Championship, niqr, Six Sigma and ECMA Kaizen Awards along with accolades from cii, QCFI and ABK aots. These achievements underscore our unwavering commitment to operational excellence, innovation and continuous improvement, reinforcing ZF’s leadership position in the industry. Clarification Statement on sale of ZF ADAS business to Herman International we would like to clarify that we have also given in the media Z of Commercial Vehicle Solutions CVS Custom confirmed that the announced transfer of Certain Advanced Driver Assistance System ADAS activity applies exclusively to its ADAS Division portfolio, specifically compute, Solution, Camera, Radar, Passenger car and does not pertain to ADAS portfolio of ZF cvsda.
It does not affect ZF CVS development, supplies service for support of ADAS solution for Commercial vehicle. Existing customer contracts, service agreement and terms and condition remain in force and program deliveries continue without interruption. For the complete statement and further detail, please refer to the Stock exchange announcement dated 14th January 2026. We will also talk about India Europe Free Trade Agreement ZF Group applauds the signing of India EU Free Trade Agreement, a truly important pact set to shape an integrated economic zone serving nearly 2 billion people and strengthening one of the world’s trade relationships. In times of geopolitical uncertainties and rising tariff hurdles, the agreement is an important sign for cooperation and exchange.
This agreement opens new paths for collaboration, innovation and sustainable growth across industries in both regions. For ZF Group, it unlocks significant opportunity to deepen our technology innovation and advance future mobility technologies with this bilateral agreement. Additionally, it allows us to contribute to more resilient and diversified value chains regarding some changes in the operations New Head of operation effective Friday 30th January, Mr. Ms. Ravi Kumar retired as Regional Operating Officer of CVCS India after 39 years of service. He was succeeded by Mr. G. Mukund who joins us from VE CV Ltd. He has more than 35 years of industry experience.
We would like to thank Mr. Ravikumar for his many years of service and wish Mr. G Mukram the very best in his new role. And now moving on the financial performance for Q3FY25 26. I would hand over to Shweta, our CFO.
Sweta Agarwal — Chief Financial Officer
Good afternoon. Thanks for joining in for your ready deference. The results were made public at 1550 hours on February 10, 2026. I hope you had a chance to go through them. I’m happy to share that our total revenues consolidated for the quarter ending 31st December 25th reached 1105 crores compared to the 980 crores in Q3 of the previous financial year. This is an increase of 12.8% year on year and a 15.3% increase compared to the previous quarter. The company delivers strong, strong operating performance in Q3 FY25 26 achieving an EBITDA margin of 20% on total sales and profit before tax before exceptional Items stood at 194.5 crores.
After factoring in the 7.9 crores of exceptional impact relating to the Labor Code changes, our profit before tax stood at 186.5 crores translating to 16.9% of total revenue. The company reported a pat profit after tax of 140.2 crores with 12.7% PAT margin and our PAT grew by 11.7% over same quarter in the previous financial year and an increase of 29.5% compared to Q2 2526. I am pleased to note that this is the first time we have also crossed revenues of 1100 crores in a single quarter and we continue to grow sustainably across 1000 crores in three out of the last four quarters.
Handing back to our MVP.
Paramjit Chadha — Managing Director
Thank you sir. Despite favorable policies, along with improved mining activity and rainfall patterns have enabled us to remain resilient in a volatile macroeconomic environment and continue supporting the demand from our valued customers. We remain committed to driving sustained growth for all our stakeholders including our investors, customers, suppliers and employees. Looking ahead, we are optimistic about continued momentum supported by recent India Europe FTA and positive volume outlook across the CV industry. Thank you. We now welcome your questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Char in one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Char and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Mukesh Sara from Evander Park. Please go ahead.
Mukesh Saraf
Yes, good afternoon and thank you for the opportunity. My first question is on the EBITDA margins, we have seen the margins improve significantly this quarter. We actually saw the same last year third quarter as well when sequentially the margins improved more than 300bps. So just trying to understand what has driven this margins because other expenses have come down while gross margins have stayed. Similar to QoQ, it will kind of. Help understand this phenomenon. Please.
Sweta Agarwal
Thank you for the question. Mukesh. Mukesh. We typically do our retrospective price amendments in Q3, so what you would see is a small impact of the price adjustments or collections of the increases of prices from April to September also being collected in December. That’s why you see this, the seasonal increase in the same quarter of last year as well as this year. I mean on a financial year basis you would see a small expansion in our margin over what we delivered for FY25 and 26. But this is a seasonality that you’re seeing in December quarter standalone.
Mukesh Saraf
Right, right. So I mean retrospective price adjustment will probably reflect on the gross margins I would imagine because your gross margins haven’t really moved sequentially the other expenses that have come down. So I mean, is this also driven by this pricing, the retrofit, the retractive pricing adjustments?
Sweta Agarwal
That’s right, because proportionately the expenses would not. It just goes into adding to the margin. Right.
Mukesh Saraf
Okay.
Sweta Agarwal
There is of course an effort in our cost management and better absorption due to higher volumes, but the impact of the higher EBITDA in last December as well as this December would come from the SPV or the sales price variances.
Mukesh Saraf
All right, all right, understood. And secondly, I think we did mention that exports have remained weak this quarter obviously because of the tariff issues, etc. Now that we have a lot of clarity on the US tariffs as well as with the with the EU event, how are we placed in terms of exports? I mean, if you could kind of help us understand next couple of years, how could exports grow? Especially given that the parent actively looks to source from India, given its best cost engineering capabilities. So I mean any outlook for the next couple of years we can provide on exports specifically.
Sweta Agarwal
I mean, when you’re asking for outlook on a couple of years, let’s say that the EMEA is showing consistent growth in vehicle production. But having said that, we are living in a very volatile world, so commenting for 27 would be difficult. In general, we can say EMEA is strengthening, but however, early days yet for the US tariff announcements and we are not able to comment on that and we don’t See that impact in EDI as yet.
Mukesh Saraf
Okay. Okay. And just lastly, I think in the opening remarks we mentioned about the mandating low floor buses for city applications and how that could benefit the ECAs, the electronically controlled air suspension product. Any timelines we could have on the possible, you know, mandating of these low flow buses and how is our current, you know, revenue from eCash? Are we currently importing this product? Any sense on the ECASH product?
Paramjit Chadha
Yeah, right now this is a draft legislation at this point of time. You might be aware that the market is gradually shifting to ultra low entry buses to facilitate ease of entry and mobility in cities. So there is a draft legislation that in the upcoming coming October 2026 time frame, all the buses that are going to be sold in major metros and cities could be ultra low entry. And we see a potential of this ECAS being utilized in each of these buses. And currently yes, it is an imported solution and we have internally activated some actions towards a fully localized content.
Mukesh Saraf
Okay, any sense on the how much like on an average the content per vehicle for ECAs could be for us, say once it’s localized, what could be the potential per vehicle realization?
Paramjit Chadha
So today it’s running at very low volumes. Going forward when the volume increases, the price would also typically come down to maybe about 25 to 30k per vehicle.
Mukesh Saraf
Okay. All right. And just lastly, I think the revenue mix that you mentioned for 3Q some of the numbers are inaudible. If you could just repeat the OEM aftermarket and exports revenue mix alone for this third quarter please. That’s it from my side.
Sweta Agarwal
Sorry, could you repeat your question?
Mukesh Saraf
The third quarter revenue mix between OEM aftermarket and exports. If you could just repeat those numbers. Some of those numbers were inaudible.
Sweta Agarwal
Okay, so our. Sorry, OEM was about 520 crores aftermarket 157 and exports 259. The service income being about 125.
Mukesh Saraf
All right, thank you so much for this. I’ll get back in the queue.
operator
Thank you. The next question is from the line of Mumuksh Mandlesha from Anandrati Institutional Equities. Please go ahead.
Mumuksh Mandlesha
Yeah, thank you for the opportunity and congress on healthy results and greetings to the management. Sir, we are 1/2 year away from the ADAS regulation implementation. So Most of the OEMs would have started finalizing the vendors for the EAC ABS and the ADAS function. Can you help us understand how are you seeing the book building for us for this ESC and HADAS system? How we are seeing the tax share with the major CV OEMs.
Unidentified Speaker
Hi Moksh, thank you for the question. On the ESC side we are working with all of the OEMs so we would retain our current leadership position in terms of the ESC system overall with each truck and bus OEM. On the ADAS side this is still at a discussion phase, advanced discussion phase with most of the OEMs. But there are discussions going on in the market with regards to other players who have offered products at a lower pricing than what is currently being offered by zf. And as a result of that there are several discussions and ongoing proof of concept related topics that are undertaken with each oem.
So we are at an advanced stage of discussions and expect to have some directional conclusion in the coming quarter.
Mumuksh Mandlesha
Thanks for this paper. Just on the content value for the system we earlier mentioned 60 kind of value for the system broadly or 25 30,000 for ESC is it also on the ground, are you seeing the same kind of pricing post the negotiation that’s going with the customers?
Unidentified Speaker
On the ESC we would be at around 20 to 25k. As we had indicated earlier on the ADAS. The earlier indication of 40 to 45k was the number we had indicated during the during our earlier discussions. However, based on the latest outlook and the feedback from customers, their expectation is somewhere half of that. So that’s the kind of pricing levels which we are looking at as we are going forward.
Mumuksh Mandlesha
Got it sir, thank you for this. So for this regulation would you require any CAPEX requirement for the next few years to support the order? Sir.
Unidentified Speaker
At this moment we are only enabling our capabilities from an application engineering perspective. So that’s more from a test track related capability requirement only.
Paramjit Chadha
Yes.
Mumuksh Mandlesha
Okay. Okay. I mean then going ahead there would be a requirement to then start manufacturing the regulation.
Unidentified Speaker
In the longer term. Yes, we would be looking at further localization content when the volume picks up for the market overall.
Mumuksh Mandlesha
Got it sir, Got it. And so for the this quarter because the regulation of escape have started. Right. So just want to understand what kind of volumes we are doing or what kind of revenue this quarter came from the ESC solution for the buses. Just to give a comparison from Q3 of 2425 to the Q3 of 2526, we are seeing approximately 3,000 units of ESC Delta increase. So approximately thousand units per month increase over last year based on the legislation that has been mandated for the buses. On the low flow bursity application.
operator
Sorry to interrupt. Mr. Mamuksh, may we Request you return to the question queue for a follow up question.
Mumuksh Mandlesha
Sure. Thank you.
operator
Thank you. The next question is from the line of Lakshmi Narayan from Tunga Investments. Please go ahead.
Unidentified Participant
Thank you. I just want to understand what has. Been the growth of the trailer segment in the last nine months. Because what I understand is that that segment was actually growing faster and there were some components which we are actually able to put on the trailer segments where we were doing EPS and so on and so forth. Can you just help me understand how the mix has changed and what has been our content in these trailer combinations?
Unidentified Speaker
Yeah. Thank you for the question, Mr. Lakshmi Narayanan. I think the trailer segment had been growing in the early part of the year primarily driven by by a change in mix from the rigid to the tractor trailers. However, in this quarter, quarter three, compared to previous year, there was a dip of about 6 to 7 percentage in the overall trailer production. So there has been multiple factors related to gst, fleet under utilization, export requirement decline and so on. So these were certain factors that triggered a drop in the overall trailer production in this quarter. So overall, if you see this has impacted in terms of numbers, volumes of trailers that are produced in the quarter three.
Unidentified Participant
Got it. And what kind of components we actually have it in them. And can I just give a rough estimate?
Unidentified Speaker
So apart from the prime mover to which we supply to all the OEMs on the trailer side, we supply the actuators which are fitted on the axles as well as the braking system, related components, valves and EBs, lift axle control systems as well.
Unidentified Participant
Got it. And there was, you know, we were supplying to a Russian commercial vehicle manufacturer. And that actually had a challenge because of all this Russian war, et cetera. Now can you just help me understand whether that particular thing was lost or it is actually augmented in some other way.
Unidentified Speaker
From India perspective, we were not supplying directly to any Russian manufacturer. That was more from a global business perspective. And I think since we are part of the companies which are part of the European Union, I think post the Russia, Ukraine war, all supplies have ceased for Russia.
Unidentified Participant
Got it. Third question is that, you know, can you just talk about what are the other regulations that would actually help us, you know, that is ESC and buses and AEDs, ECAs, etc. Right. So can you just plan out what would be the next two or three years and which would actually would drive the growth in terms of priority, in terms of, you know, which. Which would be taking higher prioritization? Of course. You talked about ADAS in the previous question.
Unidentified Speaker
Right. So ADAS is already a legislation which is coming up in 2027. Apart from that, we have a few other draft legislations. I think one is the draft legislation of mandating ESC in school buses. So that is again something that is potentially going to roll out later this year. And the other point which we spoke about is mandating ultra low entry buses in the type 1 city bus segment which could lead to improved sales of our E cars. Thirdly, this would be something that is an overall benefit to the CV industry is the scrap edge policy which is under discussion for last several years.
If that is potentially rolled out, that would have an overall benefit in the CV industry as a whole.
Unidentified Participant
Thank you sir.
operator
Thank you. The next question is from the line of Ankit Shah from White Equity Investment Advisors. Please go ahead.
Unidentified Participant
Thanks for taking my question. So my question was on EV bus E compressors. So we understand that our content in the EV bus jumps about 4x or 5x mainly because of this E compressor versus the ICE buses. So is this with respect to even the smaller buses or is this for a particular segment of the buses? One another piece within this was so are we a near monopoly in the E compressors for the EV bus or is there competition? So we’ve heard names like King Climber, Windsor Daily or Denzel, etc. So are this our competition or we are monopoly in India?
Paramjit Chadha
Yeah, I think you rightly said that in electric vehicle E compressor is more expensive as compared to the IC vehicle. And mostly in India we are I would say major supplier from India but there are some imports also by some of the manufacturer. But as a government policy that every EVA has to ensure that local content. So we are fulfilling that level.
Unidentified Participant
Okay, and this E compressor opportunities for all buses or is it for a particular range of buses that’s more than 9 meters or 12 meters today majority.
Unidentified Speaker
Of the buses are 9 meter and 12 meter and the current product, what we have proposed fits in that application. But off late there are some requirements coming for the smaller 7 meter buses as well. So we are trying to see the product suitable product fit with our product which is also capable to be packaged across board. So typically in a bus application which has higher air consumption and requirements, our product is a right fit.
Unidentified Participant
Got it. So we understand about four, four and a half thousand EB buses were sold in calendar year 25. One report projected that Ebus volumes could hit about 17,000 in two years time. So can you share your perspective on whether this is plausible? From your perspective.
Unidentified Speaker
As you rightly mentioned, the EBUS segment has seen A steady year on year growth that has been positively driven by two factors. One is the state transport unit undertaking related tenders as well as the PME bus EVA related discounts and incentives that are offered. So most recently I think the 10,500 buses order was also concluded in the month of November December, which is going to add a real fillip to several OEMs who are into bus manufacturing. So these are the quantum of buses that are going to be produced over the next two years. And it is anticipated that the government will further incentivize these kind of initiatives going forward, driven largely by domestic value addition.
So the key OE players who are able to give more maximum local content will also be incentivized to offer these buses, the complete OPEX model operation system to the public. In lieu of that it seems possible, but of course subject to a lot of other charging infrastructure and capabilities that need to also be built in to support that.
Unidentified Participant
Absolutely right. And the last question on the recent order that Tata Motors received from Indonesia for exports of 70,000 vehicles. So just wanted to understand whether, you know, we have an opportunity in this. So would these vehicles be exported to Indonesia in a complete knockdown position and our products would go with them or. This is not in our domain.
Unidentified Speaker
So of the vehicle order that they have received, there is an Ultra T7 which comprises 36,000 units and that is offered on an airbrake system platform. In that air brake vehicle system platform. We are working with Tata on that product.
Unidentified Participant
Got it. The advanced product. The advanced products are not the part of that. Right. But a smaller vehicle.
Unidentified Speaker
I think it’s a very basic ABS system. There are no advanced products as part of the spec.
Unidentified Participant
Right, right. And the last if you can share the number of. Sorry to interrupt.
operator
Mr. Ankit. We request you return to the question queue for a follow up.
Unidentified Participant
That’s right. I don’t. Thank you.
operator
Thank you. The next question is from the line of Nirali Gopani from Unique pms. Please go ahead.
Nirali Gopani
Yeah, hi. Thank you for the opportunity. So my question is on this dash comment that you made that where the content per vehicle or the. Or the pricing between R and the competition is different is a 50%. So if you can just talk about little bit more on this. How serious is the competition? Because given we are the technology leaders, how easy will it be for someone to replace us in the. In the. With the oem? If you can just highlight a few points there that will be helpful.
Unidentified Speaker
Thank you for the question. I think the main background of the other players who have come into the segment are from a different segment, the passenger car portfolio. So their product and offering may be differently suited. However, we are still in discussions and advanced stage of alignments with customers with vehicle proof of concept trials and so on.
Nirali Gopani
Okay, so you expect that in order to win the orders we’ll have to come midway with the competition on our pricing or we’d have to compromise on the pricing part.
Unidentified Speaker
At this point of time we are talking about what value we are offering to the customer and we also have our own testing capability as well as the field vehicle data acquisition. So these are the algorithms that are available with us which are our USP when it comes to talking about the product to customers.
Nirali Gopani
Okay. Yeah, that’s it. Thank you. Thank you.
operator
Thank you. The next question is from the line of the Sean chain from Kosar Capital. Please go ahead.
Unidentified Participant
Hello. Yeah Ma’, am, can you please repeat on that retrospective price adjustment part. The price adjustment. So price increases happen with effect from 1 April but the effect is given via POS in December, November or December. That is the reason why in December results there would be an impact of retrospective price increases from April to September. Sure. But then now if the price are increased and it should, it should have been in the like increase in the gross margins. Right?
Sweta Agarwal
It does get into the gross margin. Yes.
Unidentified Participant
But you do not.
Sweta Agarwal
Yeah, sure.
Sweta Agarwal
Sorry. Please ask your question.
Unidentified Participant
Yeah, so the. The effect of the pricing range should be visible in the gross margin. Right. Because on YMI basis it is on the similar lines.
Sweta Agarwal
If you’re comparing it to the same quarter of last year, there is the same impact also in the same quarter of last year. There.
Unidentified Participant
Okay, but even on a sequential basis the cost mar is on same.
Sweta Agarwal
I. I don’t. I’m not sure where you’re getting your numbers from. Maybe you can connect with me or send me a question via email and we can take it up there.
Unidentified Participant
Sure, sure. My second question Ma’, am would be on the that recently EU deal are they think the parent company thinking of introducing some products from the Indian operations Since we would be in a position to supply to the Europes after this deal. So any background that.
Sweta Agarwal
The EU FDA has just been signed off? Of course this presents a significant opportunity but we are still evaluating what would increase and how this would play out and there will release comments upon developers on how they are affecting our and how they are translating for us.
Unidentified Participant
Sure. And just last question ma’, am. Is it possible to give the Europe growth and the US both for Q3?
Sweta Agarwal
Yes. Europe has grown about 20. Europe has grown about 9%. Europe has grown about 9% and US has degrown by about 28% on volumes on. On vehicle production.
Unidentified Participant
On vehicle production.
Sweta Agarwal
Yes.
Unidentified Participant
Okay, thank you.
operator
Thank you. The next question is from the line of Tishan chain from Anadrati. Please go ahead. Hi.
Unidentified Participant
Thank you for the opportunity. So my question is on the low floor bus city application. So like how, what is the segment opportunity in terms of volume and value and how are we positioned to capture the opportunity?
Unidentified Speaker
Hi Dushant. When we look at the ultra low entry buses, these would be typically type one city buses. So today if you look at the overall volumes in this particular segment, maybe there may be about 1500 buses a month potentially that could be transformed into the ultra low entry type application. Of course the infrastructure and the routes that are currently mapped on the usage of these buses need to be enhanced. Otherwise you’re going to have all these buses scraping the floor of every single road pothole that we have. So surrounding that and going forward, the potential opportunity that we have apart from the basic braking system is the ecas because these ultra low entry buses also would have the kneeling and raising functionality similar to the tarmac coach buses.
So that is the opportunity that we spoke about a little while earlier.
Unidentified Participant
Okay. And my second question will be in a smaller series like how are you getting traction for ESA or. Smaller cv? You’re referring to SCV or lcv. Which segment are you having a query with regards to? Over five tonnes.
Unidentified Speaker
Okay, so in the SCV segment, the products that are there with the air brake, we are already present. The products that are fitted with the hydraulic brake, we are in series supplies to some of the OEMs with our hydraulic ESC products. Those are already in series production today.
Unidentified Participant
Okay, thank you.
Unidentified Speaker
Thank you.
operator
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.
Paramjit Chadha
Thank you very much. And we are, as we discussed that commercial vehicle market above 6 tonnes is booming buoyancy market. Our team is working to support that. And definitely the indications given by all the OEMs during our personal visits are also last month talking about this minus market at least till March and even indications are given after April. Thank you very much to all the stakeholders who are supporting us into this growth and thanks and wishing all the best for the future. Thank you.
Anamalai Jayaraj
Thank you. Thank you on behalf of Vashivala and Karani securities India Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.