Synopsis: An auto ancillary company is strengthening its position through a strategic business acquisition that expands its product range, manufacturing base and market presence while creating opportunities for long-term growth.
The shares of this small cap company majorly engaged in manufacturing automotive components with having two divisions such Steering and Linkages Division (SLD) and Light Metal Casting India Division (LMCI) were in focus after the company enters into an agreement to acquire related business
With the market capitalization of Rs. 3457 Crores, the shares of Rane (Madras) Ltd reached an intraday high of Rs. 1265 per share rising nearly over 9 percent from its previous day close of Rs. 1156 per share and is trading at a P/E of 31.4 whereas industry P/E stands at 28.7
What is the NEWS
Rane ( Madras) Ltd has entered into an agreement to acquire the friction business of Hindustan Composites for an enterprise value of Rs. 370 crore through a slump sale. The acquired business has over 60 years of experience and manufactures brake linings, brake pads, brake blocks, clutch facings and other friction products used in automobiles, railways, farm tractors and industrial applications. It operates two manufacturing facilities in Maharashtra, has in-house research and development capabilities, and a pan-India distribution network.
In FY26, the business reported revenue of Rs. 315.04 crore and profit before tax (PBT) of Rs. 40.29 crore. As part of the transaction, the company will also acquire the COMPO brand, helping strengthen its presence across distributors, fleet operators and the aftermarket.
The company already has a friction business with over Rs. 700 crore in revenue, and after this acquisition, the combined business is expected to become a Rs. 1,000+ crore friction materials platform, making it a market leader across major segments.
The company also expects the deal to improve manufacturing efficiency, expand its distribution network, strengthen research and development capabilities, and create opportunities for future growth. The transaction is expected to be completed by the end of the second quarter, subject to regulatory approvals and other customary conditions.
About the Company and Financials
Rane (Madras) Limited is a leading auto ancillary company and part of the Rane Group, manufacturing products across Steering & Linkages, Brake Components, Light Metal Castings, Engine Components, and Aftermarket Products. The company derives 55 percent of its revenue from passenger vehicles, 20 percent from commercial vehicles, 14 percent from tractors, 7 percent from off-highway vehicles, 2 percent from two- and three-wheelers, and 2 percent from rail and defence. It operates 17 manufacturing plants, 16 in India and one in Mexico—and serves customers in over 30 countries.
Year on Year analysis: Revenue from operations has increased from Rs. 901 Crores in Q4 FY25 to Rs. 1048 Crores in Q4 FY26, up 16 percent. Operating profit has increased from Rs. 79 Crores to Rs. 96 Crores, up 21.5 percent and net profit has increased from Rs. 7 Crores to Rs. 37 Crores, up 428 percent.
Quarter on Quarter analysis: Revenue from operations has increased from Rs. 1015 Crores in Q3 FY26 to Rs. 1048 Crores in Q4 FY26, up 3 percent. Operating profit has increased from Rs. 91 Crores to Rs. 96 Crores, up 5.4 percent and net profit has increased from Rs. 31 Crores to Rs. 37 Crores, up 19 percent.
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