Dhoot Transmission is expanding beyond its core wiring harness business as rising electric vehicle penetration increases the amount of electrical content supplied per vehicle. The company is adding battery packs, electronic controllers, sensors, chargers and other components, while using the acquisition of Multilink and new manufacturing capacity to support growth.
The shift is already visible in the company's revenue mix. EV-related sales accounted for 27% of revenue in Q1FY27, up from 24% in FY26, while revenue from non-wiring products rose 67.7% year over year to Rs 358 crore. Dhoot Transmission is targeting 25% to 30% revenue growth in FY27.
The challenge is valuation. The stock is trading at 73x earnings after gaining 36% over the past month following its listing. That puts greater focus on whether the company's newer growth businesses can scale quickly enough to support its current valuation.
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Core Business
Wiring harnesses remain the main source of revenue for Dhoot Transmission.
The company generated Rs 3,484 crore from wiring harnesses in FY26, or 77% of total revenue. It has a 41% share of the domestic two-wheeler and three-wheeler wiring harness market and about 70% of the electric two-wheeler and three-wheeler wiring business.
Two-wheelers accounted for 65% of FY26 revenue and three-wheelers for 13%. Commercial vehicles, off-highway equipment and non-auto businesses contributed the remaining 22%.
Dhoot Transmission's customers include Bajaj Auto, TVS Motor, Honda, Suzuki, Royal Enfield, Ather and Hero Electric. The five largest customers accounted for 71% of Q1FY27 revenue. Bajaj Auto contributed 32% of FY26 revenue, followed by TVS Motor at 20% and Honda at 11%.
The company also remains heavily dependent on the domestic market, which contributed 92% of revenue in Q1FY27.
EV Content
The larger opportunity comes from the increase in electrical content as vehicles shift from internal combustion engines to electric powertrains.
Wiring harness content has already increased 2.5 to 3.5 times between BS-IV and BS-VI vehicles. Ambit estimates that wiring harness content could rise from about Rs 1,800-1,900 in BS-VI models to Rs 4,000-5,000 in electric two-wheelers.
That gives Dhoot Transmission an opportunity to increase the value of components supplied per vehicle as EV adoption rises. Ambit expects electric two-wheeler penetration to reach 25% by FY31 from 7% in FY26.
EV revenue rose 79.2% year over year to Rs 390.5 crore in Q1FY27 and accounted for 27% of total revenue. Internal combustion engine-related revenue still accounted for 63%, leaving scope for the EV share to increase as the market shifts.
Dhoot Transmission is also seeking to capture a larger share of the electrical content by expanding beyond wiring harnesses. Its non-wiring portfolio includes battery pack assemblies, electronic controllers, switches, sensors, chargers, connectors and plugs.
Battery pack assembly is the largest business within this portfolio. The company supplies all of Bajaj Auto's battery pack assembly requirements for the Chetak electric two-wheeler. Battery pack sales grew 81% year over year and 25% quarter over quarter in Q1FY27.
Bajaj Auto is increasing its electric scooter production capacity from 50,000 to 60,000 units a month and plans to expand its Chetak retail network from 530-550 stores to 1,000. Dhoot Transmission has also started supplying battery packs to another major original equipment manufacturer in southern India.
The company says expanding battery pack assembly to more OEMs could increase EV-related revenue and content per vehicle while broadening its customer base. About 95% of its auto product portfolio is either EV-focused or powertrain-neutral.
Multilink Boost
The acquisition of Multilink gives Dhoot Transmission another route to expand its product portfolio and customer base.
Multilink has an annual revenue run rate of about Rs 450 crore and an EBITDA margin of around 20%, implying annual EBITDA of roughly Rs 90 crore at the current run rate. Management expects its EBITDA margin to move towards Dhoot Transmission's overall margin.
The acquisition adds relays and fuel level sensors to the company's portfolio. It also provides vendor-code access to Hero MotoCorp, Ola Electric, River Mobility and Greaves Electric, creating an opportunity to sell Dhoot Transmission's existing products to these customers.
Management expects operational integration to be completed within three to four months and is targeting 25% to 30% annual revenue growth from the acquired product portfolio.
The company is also pursuing backward integration by manufacturing connectors, terminals, switches and sensors internally. This could reduce import dependence and support margins.
Capacity Build
Capacity additions are another part of the growth plan.
Utilisation in Dhoot Transmission's core wiring harness business increased to 74% in FY26 from 64% in FY25. The company generally operates at about 75% utilisation, leaving some capacity to meet seasonal demand, particularly around Diwali.
New manufacturing units are expected to increase total wiring harness capacity by 15% to 20% during the current financial year. Non-wiring products are operating at lower utilisation levels, giving the company room to increase volumes without an immediate requirement for equivalent capacity additions.
Earnings Test
Dhoot Transmission entered FY27 with higher revenue and profit.
Revenue from operations rose 49.7% year over year to Rs 1,446.4 crore in Q1FY27. EBITDA increased 29% to Rs 218.4 crore, with the margin at 15.1%. Net profit rose 37.8% to Rs 132.7 crore, helped by a 34% decline in finance costs.
Management is targeting 25% to 30% revenue growth in FY27 and expects margins to remain above 15%. It expects backward integration and the integration of Multilink to support margins, with the latter expected to be completed by the end of Q3 or early Q4 FY27.
The earnings trajectory will therefore depend on how quickly EV volumes, battery packs, non-wiring products and the acquired Multilink business scale within the overall revenue mix. New capacity and higher content per vehicle are also central to the growth plan.
At 73x earnings, Dhoot Transmission trades at a higher multiple than Samvardhana Motherson at 38x, Uno Minda at 61x and Sona BLW at 65x.
That leaves the company's earnings growth as a key factor for the stock. The main risks identified in the analysis are slower-than-expected EV adoption, raw material price volatility, OEM-led value engineering that could reduce wiring content per vehicle and high customer concentration.
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