Arvind Chandrasekharan, CEO of Tenneco Clean Air, explains the increase in margins, the efficiency playbook and the big growth behind it

Tenneco Clean Air is gearing up for the next phase of expansion after a strong market debut, with profits rising from ₹381 crore in FY23 to over ₹500 crore in FY25 even as revenues fluctuated. Speaking to ET Now, Whole-time Director & CEO Arvind Chandrasekharan attributed the profit increase to deep structural changes implemented globally after the Apollo acquisition in 2022.He said Tenneco’s global transformation – led by CEO Jim Voss – involved plant-level optimization across 180 factories, addressing raw material costs, conversion costs, fixed costs, indirect materials and SG&A. “This is now part of our DNA,” he said, describing how India benefited from the group’s P3 framework (People, Performance, Pride) and a disciplined strategic execution model.

Margin expansion continues

Tenneco India expanded its EBITDA margins by 400 basis points over the period 23-25, thanks to clean cost benchmarking, automation and continuous improvement initiatives executed by dedicated factory teams. Chandrasekharan said these improvements are structural and will support sustainable margin gains as industry tailwinds increase.

ROCE boost through asset-light, modular design

The company’s ROCE improved significantly in FY25, supported by a unique modular product design approach that reuses pre-validated standard parts, similar to a Lego set. This enables production of multiple products on one line, high utilization rates and lower capital expenditure.

Tenneco India also follows an asset-light model by leasing factories, refurbishing old equipment and importing global assets at fair value. Supplier financing programs extend payment days and increase working capital efficiency.

Big tailwind from emissions standards, premium SUVs, exports

Chandrasekharan expects strong growth over the next three to five years, driven by multiple policy and market tailwinds:

• Stricter emission standards: BS-VII, Café standards, TREM V for tractors and future CEV standards will significantly increase the “volume per vehicle” in clean air systems.
• Suspension technology upgrade: With more than 95% of India still using traditional dampers, premium SUVs will drive demand for semi-active and active suspension systems – areas where Tenneco holds more than 5,000 patents.
• Export growth: Western OEMs are increasingly shifting their sourcing to India, boosting Tenneco’s export pipeline.

India’s growth story adds momentum

“Just being in India automatically gives us 4-6% growth,” he said, adding that premiumization, electrification and global technology transfer will accelerate Tenneco’s revenue and margin trajectory.

With a strong pipeline, modular design advantages and multi-year regulatory tailwinds, Tenneco Clean Air expects continued growth in its clean air and suspension portfolios.