Tenneco Clean Air India Limited is a leading Tier-I auto components manufacturer supplying clean air, powertrain and suspension solutions to major Indian and global OEMs. It earns revenue by supplying critical, technology-intensive components used in passenger vehicles, commercial trucks, off-highway vehicles, two-wheelers and industrial engines. Its products are essential for emission control, vehicle safety and ride quality.

The company’s key clients include Maruti Suzuki, Hyundai, Kia, Nissan, Ford, Tata Motors, Mahindra & Mahindra, Cummins, Volvo-Eicher, JCB, Bajaj, TVS Motor, Volkswagen, Club Car. It operates 12 manufacturing plants across 7 states and 1 union territory, covering clean air, powertrain, sealing, ignition and ride-control manufacturing. These facilities support flexible, high-quality and scalable production.

Its portfolio includes exhaust aftertreatment systems, catalytic converters, mufflers, engine bearings, seals, ignition products, shock absorbers and struts. These lie across multiple stages of the OEM product lifecycle—initial fitment, replacement cycle and long-term maintenance—helping OEMs meet safety and emission norms. The company serves 119 OEM customers and carries strong order visibility in PV and CV segments with consistent execution supported by shared manufacturing assets.

The company underwent internal restructuring through demergers and share swaps to consolidate clean-air operations and align with group strategy. Future expansion includes strengthening R&D, capacity optimisation and executing India-focused capex to meet rising PV and CV demand. These plans leverage global Tenneco technology assets.

The company has 12 plants, 2 R&D centres, exports contribute 3% of revenue, and it serves domestic + export clients across 26 countries through the Tenneco global network. It employs a large workforce across its plants (exact headcount not disclosed) and works with a strong banking network for operations.

MANAGEMENT & GROWTH OUTLOOK

The company’s leadership focuses on building India as a competitive manufacturing and engineering base for the global Tenneco Group. Their growth vision includes expanding clean air, powertrain and ride-control product penetration, strengthening relationships with top PV and CV OEMs, and scaling exports through global platforms.

Management aims to grow by:
✔ Leveraging Tenneco’s global R&D for high-technology emission-control products
✔ Increasing capacity utilisation of the 12 manufacturing plants
✔ Expanding aftermarket reach through Motocare India
✔ Strengthening financial metrics such as EBITDA margins (16.67% in FY25) and ROCE (56.78%)

Capex will be funded through internal accruals, operational cash flows (free cash flow to EBITDA at 61% in FY25), and group-level support. With no long-term borrowings, the company plans disciplined capital allocation and selective expansion.

INDUSTRY OVERVIEW

The company operates in the automotive components industry, covering clean air solutions, powertrain components and ride-control systems. India’s automotive industry is among the fastest growing globally, with PV and CT segments growing at 5.4% and 1.9% CAGR over FY23–FY25.

Globally, the Tenneco Group had revenues of USD 16.7 billion (2024), reflecting the scale of global auto-components demand.

Industry growth is supported by:
• Stricter emission norms (BS-VI, OBD-II, and upcoming real-driving emission standards) increasing demand for clean air and aftertreatment systems
• Rising PV, CV and off-highway vehicle demand
• Electrification and safety-feature penetration boosting ride-control demand

The Indian auto-components sector is expected to grow at a high single-digit CAGR, supported by domestic OEM growth, Make-in-India manufacturing, exports and increasing technology content per vehicle. Market leadership in several product categories positions the company strongly—such as 57% share in Clean Air–CT, 68% in Clean Air–OH and 52% in PV shock absorbers.

MAJOR RISK FACTORS

1. High Dependence on Indian OEM Demand (30–40 words)

A large share of revenue comes from domestic PV and CV OEMs. Any slowdown in auto sales, regulatory changes, or delays in OEM production could significantly reduce order flows and impact capacity utilisation.

2. Regulatory & Emission Norm Changes

The company’s clean-air products depend on emission standards like BS-VI and future RDE norms. Any delay in regulatory enforcement or policy reversal may slow demand for advanced aftertreatment systems.

3. Raw Material Price Volatility

Steel, precious metals and electronics are major inputs. Price fluctuations directly impact margins, as contracts with OEMs may not always allow immediate pass-through of higher cost.

4. Promoter Group Entities in Similar Business

Certain promoter group companies operate in related automotive component segments, creating potential conflict-of-interest situations in procurement, leasing or supply arrangements, even though policies exist to mitigate these concerns.

5. Export Exposure & Global Market Risks

Though exports are only 3% of revenue, fluctuations in global demand, currency volatility, or geopolitical issues can affect performance and limit future export expansion.

6. Technology Dependence on Group R&D

The company relies on global Tenneco R&D platforms. Any disruption, strategic shift, or reduced technology transfer from the group may affect the local business’s ability to innovate or meet OEM requirements.

7. Customer Concentration Risk

Top OEMs contribute a significant part of revenue. Loss of even one large customer due to competition, pricing pressure, or supply chain issues could materially affect sales.

KEY STRENGTHS & OPPORTUNITIES

1. Market Leadership Across Product Segments

The company is the No.1 supplier in Clean Air for CT & OH segments and No.1 in ride-control for PVs. This leadership enables stable volumes, long-term supply contracts and strong OEM trust.

2. Strong, Diversified Customer Base

With 119 customers, including all top 7 PV OEMs and top 5 CT OEMs, the company enjoys broad demand visibility across vehicle categories. This reduces dependence on any single OEM.

3. Advanced Engineering & R&D Capabilities

Two India-based R&D centres and access to global Tenneco research enable the company to develop modular, emission-compliant and future-ready technologies suited for Indian and global markets.

4. Scalable Manufacturing Network

Twelve plants across the country use shared and reusable assets, improving scalability and cost efficiency. This helps meet large OEM orders while maintaining high quality and timely delivery.

5. Strong Financial Metrics & Cash Generation

FY25 EBITDA margin of 16.67%, ROCE of 56.78%, and 61% free-cash-flow-to-EBITDA reflect strong operating discipline and effective capital use, enabling internal funding of growth plans.

6. High Growth Opportunity from Emission Norms

Tightening emission regulations (BS-VI upgrades, RDE, CV standards) will expand demand for advanced clean-air systems—an area where the company already holds dominant market share.