Sandhar Technologies Limited

Sandhar Technologies reported a consolidated total income growth of 10% for the full year FY25 compared to FY24. Consolidated EBITDA for FY25 reached ₹400 crores, marking a 14% increase from FY24's ₹351 crores, with a consolidated EBITDA margin of 10.20%. The India business demonstrated strong performance, with its EBITDA growing 21% in FY25 to ₹357 crores, and 12% in Q4 FY25 to ₹97 crores. Joint Ventures also contributed positively, recording a total income of ₹303 crores with an average EBITDA close to 13% and achieving PAT positive status for both Q4 and the full year FY25.

The company's wholly-owned subsidiary, Sandhar Ascast Private Limited, successfully acquired the high pressure and low-pressure aluminum die casting business of Sundaram Clayton Limited at its Hosur plant for a total consideration of ₹163 crores. Operations for this acquired business commenced on April 1, 2025. Management expects this acquisition to contribute ₹400-425 crores in revenue for FY26, with the die casting segment typically achieving an EBITDA margin of 9% to 10%. This acquisition is a strategic move to diversify operations, enhance manufacturing capabilities, and expand the product portfolio into new markets.

The overseas business continued to be a drag on consolidated performance, sustaining an annual loss of ₹21.09 crores in FY25 and ₹3.74 crores in Q4 FY25, primarily due to low demand and slowdown in Europe. Management acknowledges this challenge and is actively reworking its strategy to mitigate losses in FY26, aiming to achieve near breakeven by the end of the fiscal year. The company plans to leverage its strategic advantages and existing capacities in regions like Romania, where capacities are now being utilized, to improve performance.

For FY26, Sandhar Technologies plans a CAPEX of ₹180-200 crores, which includes both maintenance and growth capital. Approximately ₹20-25 crores of this CAPEX is allocated for upgrading the Sundaram Clayton lines. The company's expansion projects in Pune for cabins, fabrication, and die-casting, which were under construction, are expected to commence commercial production within the current quarter, adding an estimated ₹40-50 crores to revenue in their first year of operation.

The company's EV business has initiated commercial production of battery chargers and is receiving a positive market response, with a gradually increasing customer base. For FY26, the EV business is targeted to generate ₹10-15 crores in revenue, with an aspiration to reach ₹100 crores within the next three years. Additionally, the smart locks product line, which received the EV Best Part Development Award from Suzuki Motorcycle, is ramping up and is expected to show gradual but steady growth in the current year.

Sandhar Technologies anticipates a revenue growth of 14%-15% for FY26, excluding the contribution from the Sundaram Clayton acquisition. The company is targeting an improvement of 30-40 basis points in its consolidated EBITDA margin for FY26, aiming for a range of 10.5%-10.60% from the current 10.20% in FY25. This improvement is expected to be driven by the scaling up of new Greenfield and Brownfield plants, neutralization of fixed costs, and enhanced operational efficiencies.

As of March 25, the consolidated net debt stood at ₹740 crores, which includes a ₹113 crore payment for the Sundaram Clayton acquisition, with an additional ₹50 crores paid in April 25. The gross debt at one point was ₹850 crores. The average cost of borrowings, including working capital, is in the range of 7%-7.5%. The company's current maturities for FY26 are approximately ₹100 crores, and management expects healthy cash inflows from operations to fund organic expansion without increasing debt levels.