Detailed Narrative
Strong Q1 FY27 Performance Driven by Broad-Based Growth
Sansera Engineering Limited commenced FY27 with its highest-ever quarterly revenue, crossing the INR 10,000 million milestone to reach INR 10,213 million, representing a robust 33% year-on-year growth. This strong top-line performance was accompanied by healthy profitability, with EBITDA margin expanding by 200 basis points to 19.2% from 17.2% in the prior year. Profit after tax also grew by 39% year-on-year to INR 874 million, with PAT margins at 8.6%.
Non-Auto and ADS Segments Lead Growth Momentum
The non-auto segment was a primary growth driver, delivering its highest-ever quarterly sales of INR 1,998 million, an impressive 129.9% year-on-year increase, and contributing 20.8% to overall sales. Within this, the ADS business saw its revenue more than triple year-on-year to INR 1,454 million. The Auto Tech-Agnostic and xEV business also grew significantly by 22.2% to INR 1,316 million, reflecting accelerated EV adoption, particularly in two-wheelers.
Expanding ADS Order Book and Capacity Investments
The cumulative unexecuted lifetime order book for the ADS business, executable over five years, stood at INR 44.4 billion at quarter-end and has since increased to INR 57.5 billion. This includes a new order from a semicon equipment manufacturer valued at approximately INR 1,250 crores over five years. To support this growth, Sansera is investing in a new surface treatment facility, relocating its defense business to a dedicated facility, and constructing an 80,000 square foot hangar for aero and SEM operations, with projects coming online from Q3 FY27.
Strategic Capacity Expansion in Auto ICE and xEV
In the auto segment, Sansera is augmenting forging and machining capabilities at its Pantnagar (Plant 6) and Manesar (Plant 4) facilities, primarily for crankshafts for two-wheelers and passenger vehicles, and connecting rods for passenger vehicles. Bangalore Plant 2 is also seeing increased machining capacity for Auto Tech-Agnostic and xEV components. These expansions, along with the Sansera-Nichidai joint venture for cold and warm forged precision components, are expected to come on stream from Q3 FY27.
Margin Management Amidst Inflationary Pressures
Despite a challenging geopolitical environment and significant cost inflation, Sansera maintained healthy profitability. The company reported a provision of INR 126 million for U.S. import duty tariff and an exceptional charge📎 of INR 169 million for a litigation settlement, both impacting reported PAT. Management noted that while material cost increases, particularly in aluminum and some consumables, have occurred, steel inflation pass-throughs are still in process, with the reported EBITDA margin of 19.2% already including the tariff provision.
Long-Term Growth Outlook and Segmental Profitability Targets
Sansera aims for high-teens to 20% overall top-line growth for FY27, with non-ADS businesses expected to achieve mid-teen growth. The ADS segment is targeted to deliver EBITDA margins between 25% and 30%, significantly higher than the overall company average. Management reiterated its long-term aspiration to achieve an overall revenue of INR 8,000-9,000 crores by the end of the decade (FY31), supported by a total ADS revenue generation capacity of INR 3,500 crores from planned facilities.