Highlights
- Divgi TorqTransfer Systems Limited declined 3.05% to ₹733.55 but remains near its 52-week high levels.
- Strong AWD and transfer case order book supports growth amid rising SUV demand and export opportunities.
- Healthy EBITDA margins around 20–22% and low debt reflect operational efficiency and balance sheet strength.
Divgi TorqTransfer Systems Limited (DIVGIITTS) declined 3.05% to ₹733.55, slipping ₹23.05 as on 27 Feb. 26, though it continues to trade near its 52-week high.
Reason for Rally
The rally is supported by:
- Strong order book visibility in AWD and transfer case systems
- Growing SUV penetration in India
- Export opportunities in global drivetrain markets
- Improved operating leverage
Auto ancillary stocks are witnessing re-rating due to improved OEM demand and export tailwinds.
Financial Overview
Divgi TorqTransfer repoted in Q3 FY26 revenue of ₹ 906.21 Mn. EBITDA margins have remained healthy in the 20–22% range due to strong product positioning in niche drivetrain solutions. Net profit margins have improved alongside operating leverage, resulting in steady EPS growth. The company maintains relatively low debt levels and strong promoter holding, supporting balance sheet stability.
Technical Levels & Prediction
The stock has immediate support in the ₹700–720 range, while resistance is placed between ₹780 and ₹800. The RSI signals bullish momentum but is approaching the overbought zone. A sustained move above ₹800 could confirm a breakout and potentially drive the stock toward the next upside target of ₹850.
Analyst View
Analysts view Divgi as a niche, high-margin auto component play benefiting from structural SUV demand growth. Long-term outlook remains constructive if margin discipline continues.
Risks
Key risks include a slowdown in auto demand, which could impact sales volumes and revenue growth. Volatility in raw material prices may pressure margins and profitability. Additionally, high dependency on export markets exposes the company to global economic uncertainties, currency fluctuations, and changes in international trade policies.
Conclusion
Divgi TorqTransfer’s breakout to 52-week highs reflects improving fundamentals and sector tailwinds. Sustained earnings delivery will determine further upside.
Divgi TorqTransfer Systems slipped 3.05% to ₹733.55 but continues trading near peak levels. Growth is supported by a strong AWD order book, rising SUV penetration, export demand, and improving operating leverage. With stable margins and low debt, the company remains a niche high-margin auto ancillary player, though auto demand and raw material risks persist.
FAQs
- Why did Divgi TorqTransfer stock decline?
The stock corrected 3.05%, likely due to short-term profit booking despite strong broader sector momentum. - What supports Divgi’s long-term growth?
Growth drivers include increasing SUV penetration, export opportunities, and strong demand for AWD and transfer case systems. - What are the major risks for investors?
Key risks include slowdown in auto demand, raw material price volatility, and export market dependence.