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Sansera Engineering Limited — Q3 FY26 earnings call

Call held 10 Feb 2026

Management summary

Sansera Engineering Limited delivered its highest-ever quarterly sales and EBITDA in Q3 FY26, driven by robust growth in the ADS segment and strong international market performance. Despite one-time charges related to revised Labour Code and development costs, EBITDA margins expanded to 18.1%. The company also inaugurated a new Pantnagar facility for 2-wheeler OEMs and formed a joint venture with Nichidai Corporation of Japan to bolster its tech-agnostic component offerings and expand into new forging technologies.

Highlights

Revenue reached an all-time high of INR9,077 million, growing 25% year-on-year.
EBITDA also hit a record INR1,639 million, with margins improving to 18.1% from 17.5% in Q3 FY25.
ADS segment revenue surged over 4x YoY and 2x QoQ, aligning with expectations and guidance.
International sales showed strong momentum, with Europe growing 27% YoY and other foreign countries more than doubling.
Inaugurated a new Pantnagar facility dedicated to domestic 2-wheeler OEMs, focusing on crankshaft assemblies.

Concerns

A one-time exceptional item of INR162 million was recorded due to revised Labour Code law.
A provision of INR100 million for development costs impacted gross margins during the quarter.
Sales to a leading North American EV manufacturer were down 50% YoY and 60% from internal projections.
Gross margin declined by 190 bps YoY and 100 bps QoQ, primarily due to the one-time development cost provision.

Key financials

01 Revenue 9,077 Mn +25%YoY
02 EBITDA 1,639 Mn
03 EBITDA Margin 18.1%
04 PAT (excl. exceptional) 857 Mn +53%YoY
05 PAT 694 Mn +24.2%YoY
06 PAT Margin 7.6%

What they filed

Q1 FY27: revenue up 33.3%, net profit up 38.1% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	763	728	782	766	825 +8%	908 +25%	999 +28%	1,021 +33%
Expenses	631	601	655	635	683	746	806	825
EBITDA	133	127	127	131	142 +7%	162 +28%	193 +52%	196 +50%
Margin	17%	17%	16%	17%	17%	18%	19%	19%
Other income	4	7	10	12	12	-7	31	-4
Interest	23	18	10	10	8	8	11	12
Depreciation	43	44	47	48	50	52	56	62
Profit before tax	71	71	81	85	95 +34%	95 +34%	157 +94%	118 +39%
Tax rate	27%	22%	27%	26%	25%	27%	22%	26%
Net profit	52	56	59	63	71 +37%	69 +23%	123 +108%	87 +38%
EPS	9.38	8.99	9.57	10.05	11.55	11.04	19.48	13.87

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

ADS
4 x YoY Revenue Growth2 x QoQ Revenue Growth
Europe
27% Revenue Growth
Other Foreign Countries
2 x YoY Revenue Growth
Auto ICE
13% Revenue Growth
Auto Tech-agnostic & xEV
26% Revenue Growth
Sweden
736 Mn Q3 Revenue14% Q3 Margin591 Mn Q2 Revenue16% Q2 Margin70% YoY Growth

Order book

high confidence

Total value

₹3,870 Cr

as of 2025-12-31 quantified

Execution

execute INR3,800 crores of backlog orders in the next 4 years approximately, cumulatively totally.

Composition

Mix 2 segments

ADS ₹3,870 Cr 98.2%
Energy ₹70 Cr 1.8%

Share of order book by segment, derived from disclosed amounts

The pipeline remains robust, and the company expects a lot of uplift in the order book over the next couple of quarters and next year.

Source: Prepared remarks

Capital allocation

high confidence

Capex ₹400 Cr
- Investment in Nichidai JV (60% stake) ₹50 Cr
- ADS capacity expansion for FY27 revenue ₹300 Cr
- Pantnagar plant development
- Special process investment (ADS) ₹35 Cr
Previously planned ₹350 Cr

this year's capex plan. We were willing to -- I mean, we were looking at anywhere between INR350 crores to INR375 crores. That's what more or less we will spend maybe towards -- close towards INR400 crores because we want to be aggressively.
Debt Debt disclosed
- Repayment Reduction of debt over the last 1 year
Finance costs for the quarter stood at INR79 million, which is significantly lower, owing to the reduction of debt that we have done over the last 1 year.
M&A Nichidai Corporation of Japan Joint venture · Signed · Consideration ₹[object Object] (cash)

To expand into cold and warm forged precision components, leveraging Nichidai's expertise in tools, dies, and precision components.
Sansera will invest INR500 million for a 60% stake over a couple of years. Expected to have a better margin profile than current products.

Towards this, we have recently signed a joint venture agreement with Nichidai Corporation of Japan. Our JV partner's expertise in manufacturing of tools, dies and precision components in cold and warm forged categories. And these are manufactured across operations in Japan and Thailand. Sansera will be investing INR500 million towards this JV for a stake of 60% over a couple of years.

Guidance & targets

Revenue Growth

Consolidated Revenue Growth Revenue Growth · FY26 · Medium confidence teens to mid-teens

close the year with teens to mid-teens top line growth while comfortably maintaining our current margin profile.

— B. R. Preetham
Consolidated Revenue Growth Revenue Growth · long term · High confidence 20%

Our target remains to be that we should be 20% EBITDA, 20% growth, 20% ROCE.

— B. R. Preetham
Sweden Revenue Growth Revenue Growth · next year · High confidence 20%

I think next year, we are looking at about 20% growth. In the range of 20%. Yes, 20% in Sweden. Yes.

— B. R. Preetham

Profitability

Consolidated Margin Profile Profitability · FY26 · High confidence maintain current profile

close the year with teens to mid-teens top line growth while comfortably maintaining our current margin profile.

— B. R. Preetham
Aerospace EBITDA Margin Profitability · upon full utilization · Medium confidence 30%+

aerospace would give us about 25% to 30% margin. We think that once we fully utilize this, we would surpass that number of 30%. So it could be very close to 30% or 30% plus.

— B. R. Preetham
Consolidated EBITDA Margin Profitability · long term · High confidence 20%

Our target remains to be that we should be 20% EBITDA, 20% growth, 20% ROCE.

— B. R. Preetham
Sweden EBITDA Margin Profitability · ongoing · High confidence 10-12%

So we would like to continue to operate as long as this EBITDA margins are between 10% and 12%.

— B. R. Preetham

ADS Revenue

ADS Revenue ADS Revenue · FY26 · High confidence INR300 crores+

we should cross INR300 crores comfortably this year.

— B. R. Preetham
ADS Revenue ADS Revenue · FY27 · High confidence INR550-600 crores

for the next year between INR550 crores to INR600 crores is what we look at.

— B. R. Preetham

Revenue Potential

Pantnagar Plant Annual Revenue Revenue Potential · per annum (fully occupied) · Medium confidence INR500 crores

this can actually generate close to about INR500 crores per annum.

— B. R. Preetham

Working Capital

ADS Working Capital Cycle Working Capital · ongoing · High confidence 170-180 days

in aerospace and defense sorry, ADS business, we should be seeing about 170, 180 days.

— Vikas Goel

Return on Capital

Consolidated ROCE Return on Capital · long term · High confidence 20%

Our target remains to be that we should be 20% EBITDA, 20% growth, 20% ROCE.

— B. R. Preetham

Volume Growth

Domestic ICE Segment Growth Volume Growth · next couple of years · Medium confidence high single-digit to low double-digit

domestic ICE would grow between high single-digit to low double-digit kind of growth.

— B. R. Preetham
Export ICE Segment Growth Volume Growth · next 3 years · Medium confidence 20-25%

in the export segment, we should see a very healthy 20%, 25% growth given everything to be normal.

— B. R. Preetham
Consolidated ICE Segment Growth Volume Growth · ongoing · Medium confidence 15%+

on a consol basis, the ICE segment would easily be able to grow beyond 15%, right, considering both domestic and export? I think so. I think so. Yes.

— B. R. Preetham

What to watch in Q4 FY26

US Plant Investment Decision

End of this month or next month

Current Awaiting clarity on US-India trade deal tariffs

Target Decision on US plant capex and location

Why it matters

A significant capex decision and new market entry for Sansera, contingent on the finalization of trade deal outcomes.

I expect that towards the end of this month or maybe middle of this next month, we may plan a visit to conclude what we are discussing with our customers and come up with it.

Risks & concerns

Underperformance of a premium North American EV customer
medium

Sales to a leading North American EV manufacturer were down 50% YoY and 60% from the company's own projections.

Management acknowledged
Tariff issues impacting US/Europe PV ICE orders
medium

Decisions on PV ICE orders in Europe and the US have been delayed due to tariff issues, but clarity is expected in the next couple of quarters.

Management acknowledged, awaiting clarity
Seasonal weakness in auto segment
low

Q3 is seasonally a weak quarter for the auto segment due to annual maintenance-related shutdowns and yearly model changes.

Management acknowledged

Q&A highlights

5 direct

Pantnagar Plant Strategy and Revenue Potential Direct

This plant primarily is for focusing on our domestic 2-wheeler segment. So we will consolidate our operations here... more than 60% of Indian automotive 2-wheeler industry still manufactures these crankshaft assemblies in-house... this can actually generate close to about INR500 crores per annum.

Clarifies the strategic focus of the new Pantnagar plant on the 2-wheeler ICE segment, highlights the significant outsourcing opportunity, and provides an estimated annual revenue potential.

Asked by Mukesh Saraf

Tech-agnostic and xEV Order Book Growth Partial

Tech-agnostic mainly pertains to the aluminum forging kind of components that we had taken. And we have taken a pause in taking the newer orders because we've also establishing our technology there, and then we have also stabilizing what we had taken.

Explains the temporary pause in new tech-agnostic orders, indicating a strategic focus on technology stabilization and existing programs before pursuing new opportunities in this segment.

Asked by Mukesh Saraf

US Unit Capex and Tariff Negotiations Partial

I think while the news has come and it's very positive, we expect that there will be momentum and traction that will build up in the decision-making process because while there were a lot of discussions that was happening, the decision-making was not happening.

Highlights that investment decisions for a potential US manufacturing unit are contingent on clarity regarding US-India trade deal tariffs, indicating a delay in firming up capex plans.

Asked by Arjun Khanna

ADS Capacity Expansion and FY27 Targets Direct

the current capex, what we have already committed and already installed is adequate for us to reach our FY '27 numbers, which, as Preetham just said, is between INR500 crores, INR550 crores to INR600 crores is our expectation and guidance.

Provides assurance that existing capex is sufficient for achieving the FY27 ADS revenue targets and details the timeline for the new ADS facility to become operational.

Asked by Arjun Khanna

Gross Margin Contraction Direct

we had one exceptional or rather onetime adjustment this quarter where we basically provided for a development cost of about INR100 million which is not in the ordinary course.

Clarifies that the gross margin decline (190 bps YoY, 100 bps QoQ) was primarily due to a one-time development cost provision, suggesting underlying operational margins are stable.

Asked by Yash Agarwal

Nichidai JV Potential and Margin Profile Direct

we have got into this joint venture mainly to get into 2 areas of forging where our presence has been practically not - non-existent, which is cold and warm forging... we are very confident the margin profile of the products what we are targeting in the JV will be better, will be better than what we currently have as a margin profile.

Explains the strategic rationale for the JV to enter new forging technologies and highlights the expectation of a superior margin profile from these new product segments.

Asked by Siddhartha Bera

Aerospace Volatility and A220 Doors Program Direct

the volatility in the aerospace was mainly because of Boeing, one incident... But they are now, I think, as we understand, they are almost normalized now... And the last question on the company in the news recently, which delivered the first ship set of doors for the A220 aircraft. We are very much present in that.

Addresses concerns about past volatility in the aerospace segment, attributing it to Boeing incidents, and confirms the company's active participation and ramped-up production for the A220 program.

Asked by Kashyap Javeri

Consolidated Operating Margin Target Partial

Our target remains to be that we should be 20% EBITDA, 20% growth, 20% ROCE. That is what is the core objective with which the entire company is working on... I would not say that we will reach 20% next year.

Manages investor expectations by clarifying that while 20% EBITDA margin is a long-term aspiration, it is not an immediate target for the next fiscal year, providing a more realistic outlook.

Asked by Aashav Patel

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Highlights

Sansera Engineering reported its highest-ever quarterly sales of INR9,077 million, marking a 25% YoY increase. EBITDA reached INR1,639 million, with margins improving to 18.1% from 17.5% in Q3 FY25. Profit After Tax stood at INR694 million, or INR857 million excluding a one-time exceptional charge of INR162 million related to revised Labour Code, reflecting a 53% YoY growth. Finance costs were significantly lower at INR79 million due to debt reduction over the past year.

ADS Business Growth and Outlook

The ADS (Aerospace, Defense, and Semiconductor) segment demonstrated exceptional growth, with revenue more than quadrupling YoY and doubling QoQ. The company is on track to achieve its FY26 ADS revenue target of over INR300 crores and expects INR550-600 crores in FY27. The cumulative unexecuted lifetime order book for ADS stands at INR38.7 billion as of December 2025, with significant ramp-up expected towards FY30, including INR1,200-1,300 crores in FY30 alone.

New Pantnagar Facility and 2-Wheeler Strategy

Sansera inaugurated a new state-of-the-art facility in Pantnagar, primarily dedicated to domestic 2-wheeler OEMs for crankshaft assemblies. This plant, with approximately 2 lakh square feet of manufacturing space, is expected to generate close to INR500 crores in annual revenue when fully utilized. The facility is designed with high automation, IoT, and data analytics, and will be predominantly operated by women employees, aiming for 100% female workforce over time. This initiative targets the significant outsourcing opportunity in the 2-wheeler segment, where over 60% of crankshaft assemblies are still manufactured in-house.

International Market Traction and Trade Deals

International sales showed robust growth, with Europe revenues up 27% YoY and other foreign countries more than doubling on a small base. The company anticipates a positive impact on both current exports and new opportunities from the interim U.S.-India trade deal and EU FTA, which are expected to accelerate decision-making for large orders. However, sales to a leading North American EV manufacturer were down 50% YoY and 60% from internal projections, impacting overall export performance.

Nichidai Joint Venture and New Technologies

Sansera signed a joint venture agreement with Nichidai Corporation of Japan, investing INR500 million for a 60% stake over two years. This JV aims to expand Sansera's capabilities in cold and warm forged precision components, particularly for driveline and steering components, where Sansera previously had limited presence. The partnership is expected to yield a better margin profile than current products and enhance Sansera's tech-agnostic offerings, leveraging Nichidai's expertise in tools, dies, and precision component manufacturing.

Capital Expenditure and Capacity Expansion

The company's overall capex plan for FY26 is projected to be around INR350-400 crores. For the ADS business, the current committed capex is deemed adequate for FY27 targets, with a new 80,000 sq ft facility expected to be ready by June-July 2026. Sansera is also exploring additional land for aerospace expansion and is in the final stages of commissioning special processes, primarily for aerospace, to enhance its advanced manufacturing capabilities for 4-meter components and diversify its product portfolio.

ICE Segment Outlook and Long-Term Vision

The domestic ICE segment is expected to grow at high single-digit to low double-digit rates, while the export ICE segment is projected for a healthy 20-25% growth over the next three years. Sansera maintains a long-term aspiration of achieving 20% EBITDA margins, 20% revenue growth, and 20% ROCE. The company believes its strong mass manufacturing capabilities, well-established processes, and focus on complex, high-precision components position it well to achieve these targets and expand into new segments.

This is an AI-generated summary of a publicly available earnings call transcript.

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