Sansera Engineering Limited

Sansera Engineering reported a 3% year-on-year revenue growth, reaching INR7,663 million in Q1 FY26, despite facing multiple headwinds in both domestic and global markets. The company maintained a disciplined and healthy margin structure, with EBITDA at INR1,321 million, translating to a 17.2% margin (up 10 bps YoY). Profit After Tax (PAT) grew by 26% YoY to INR630 million, achieving an 8.2% PAT margin. Operating cash flow net of tax remained healthy at INR962 million, representing 13% of operating revenue.

The domestic business recorded a revenue growth of approximately 4% YoY, driven by strong performance across multiple segments including PV, CV, ADS, agriculture, and industrial applications. However, the 3 and 2-wheeler segments delivered muted performance, primarily due to a decline in 2-wheeler scooter sales. Conversely, the 2-wheeler motorcycle category continued to thrive, with strong rural demand for entry-level bikes and healthy urban demand for premium motorcycles above 200cc. The domestic non-automotive segment, including xEV and tech-agnostic products, also showed positive growth.

International business experienced a slowdown in Q1 FY26, with exports from India (excluding ADS) declining by 20.6% due to global uncertainties. In contrast, the Europe business grew by approximately 3.5%, significantly boosted by the Swedish business. The Swedish operations achieved their highest-ever quarterly sales of INR637 million, marking an exceptional 80% YoY growth, albeit on a low base. This momentum is expected to stabilize from Q3 FY26 onwards, contributing to a projected 20% plus growth for the full year and double-digit margins.

As of June 2025, Sansera's order book stood at INR20,243 million, with over 60% originating from international orders. The company secured INR1,732 million worth of new orders during the quarter, predominantly from the ADS segment (25%), followed by PV-CV (30%), 2-wheeler (15%), xEV (10%), and tech-agnostic (9%). These new order wins align with the company's long-term vision and growth strategy, focusing on high-value added, intricate components, with a target of INR280-300 crores revenue from ADS in FY26 and INR1,000 crores in three years.

The recent increase in US tariffs on Indian exports has introduced significant uncertainty. While major customers have committed to absorbing or passing on these tariffs, management maintains a cautious near-term outlook for exports. A more pressing concern is the Residual Value Content (RVC) requirement for the USMCA region, currently at 65% and potentially rising. This necessitates evaluating the cost implications of shifting value addition to the US, which could lead to strategic decisions regarding a US manufacturing facility, impacting business models and pricing.

Sansera is actively developing its aluminum forging capabilities, having installed 6 press lines and developed 100-110 components for premium 2-wheelers, with plans to develop intricate new components for PV suspension and driveline parts. The company aims for a sustained business order book of INR500 crores plus over time^⏳ in this segment. For the MMRFIC (radar technology) segment, a revenue of INR35-40 crores is projected for FY26 with healthy EBITDA margins, driven by government intent to productionize these technologies, though order book details are complex and will be shared later.

Sansera Engineering demonstrated its commitment to sustainability and environmental responsibility by achieving a Platinum rating from the Indian Green Building Council for its Bidadi plant in Karnataka. This recognition underscores the company's efforts to integrate sustainable practices into its operations, aligning with its broader commitment to delivering profitable growth responsibly.