Sharda Motor

Sharda Motor Industries Ltd. reported Q3 FY26 revenues of INR881.6 crores, marking a 28% YoY growth. Gross profit for the quarter stood at INR202.3 crores, a 12% YoY increase, while EBITDA reached INR106.4 crores, growing 13% YoY with a margin of 12.1%. Profit before tax (PBT) for the quarter was INR111.6 crores, and profit after tax (PAT) was INR81.4 crores. For the nine months ended December 31, 2025, total revenue was INR2,425 crores (16% YoY growth), with PBT at INR339.1 crores (including exceptional item^📎s) and PAT at INR256 crores.

The Indian automobile industry witnessed broad-based growth in Q3 FY26, supported by strong festive demand, improved affordability, and a favorable macroeconomic environment. Passenger vehicle production rose by over 19% YoY to 13.97 lakh units, light commercial vehicle production grew over 16% to 1.75 lakh units, and three-wheeler production increased by 35% to 3.41 lakh units. The industry enters the final quarter of FY26 with firm momentum, healthy order pipelines, and expectations of continued demand, supported by macroeconomic stability and policy focus on manufacturing.

The company secured significant new orders, including control arms for a leading PV OEM with an annual value of USD3 million and a lifetime value of USD15 million, with SOP scheduled for Q3 FY27. Additionally, two orders for control arms and links from PV OEMs, valued at USD5 million annual and USD25 million lifetime, saw one SOP in Q3 FY26 and another expected in Q4 FY26. Export orders from a North American engine and genset manufacturer totaled USD3.7 million annual and USD18.5 million lifetime, with SOPs commencing from Q3 FY27 and Q4 FY27, alongside a previously announced USD7 million annual export order with SOP expected in Q2 FY27.

The partnership with Donghee reinforces Sharda Motor's strategy to expand its suspension and lightweighting portfolio, enabling participation in powertrain-agnostic products. This collaboration strengthens R&D capabilities in control arms, links, subframes, and torsion beams, leveraging Donghee's global experience and new-age technology. The company has initiated business development and engagement processes with customers, targeting Indian OEMs, including SUVs and EVs, with potential kit values ranging from INR4,000 to INR10,000.

The Emission business continues its steady growth, with traction in adjacency segments like CEV and temperature control pipes. The company is closely monitoring BS7 developments and is engaged with customers for co-development. BS6.3, essentially BS6 with WLTP, is set to be effective from April 1, 2027. A new manufacturing facility is being established in Uttarakhand with a capex of approximately INR20 crores, designed to be modular and scalable, aiming for high capacity utilization by FY27 to meet incremental volumes and improve customer proximity.

Management clarified that commodity price movements, particularly for catalysts and other raw materials, do not impact the company's margins. Catalysts are either customer-directed or procured on a free-of-cost basis, ensuring no impact from price fluctuations. Other raw materials are subject to back-to-back indexation agreements with customers, which are regularly adjusted, thus insulating margins from commodity price volatility.

The company's market share in the suspension business increased to 12.5% in FY25 from 10% in FY24, with expectations for further growth in FY26 and beyond, supported by a strong order pipeline. While Q3 FY26 gross profit growth was lower than the industry average, management attributed this to WIP and supply chain dynamics, not market share loss. They anticipate outperforming industry growth in the future, driven by new orders in lightweighting and global business verticals.