Shriram Pistons & Rings Limited

Shriram Pistons & Rings Ltd. delivered strong financial results for both Q4 and the full fiscal year 2025. For FY25, consolidated total income grew by 15.3% year-on-year to ₹36,612 million, with EBITDA increasing by 15% to ₹8,357 million, maintaining a margin of 22.8%. PAT for FY25 rose by 18% to ₹5,156 million, achieving a margin of 14.1%. In Q4 FY25, total income was up 15% year-on-year to ₹10,158 million, EBITDA grew 18% to ₹2,378 million (23.4% margin), and PAT surged 30% to ₹1,515 million (14.9% margin).

The company has successfully diversified its business, with approximately 50% of its revenue now derived from aftermarkets, exports, and non-automotive segments, which are less susceptible to powertrain technology changes. This strategic shift has enabled the company to outgrow the auto industry, which saw only a moderate 3% weighted average growth in FY25. Shriram Pistons aims to continuously outgrow the industry and maintain its dominant market share across all product lines, including engine valves, pistons, and piston rings.

Shriram Pistons made two significant acquisitions during the period. It acquired a 100% stake in SPR TGPEL Precision Engineering Limited, enhancing its capabilities in the precision molded plastic component segment. Additionally, the acquisition of Karna Intertech, a key supplier of gravity die casting molds, represents a backward integration strategy aimed at ensuring seamless tool availability and improving manufacturing efficiency for its piston casting operations. The company is actively exploring further M&A opportunities that align with its existing business and customer needs.

The company is expanding its manufacturing footprint, with the Pithampur facility set to double its existing capacity. A new facility for SPR EMFI in Coimbatore, involving an investment of approximately ₹70 crores, is expected to be commissioned by the end of June 2025, focusing on mid-drive motors and other EV components. The EV segment (EMFI business) has roughly doubled its revenue from ₹12 crores last year, with the company successfully clearing all PM E-Drive requirements and ICAT approvals for its motors and controllers, positioning it as a leading player in the EV component space.

Shriram Pistons is committed to sustainability, with 35% of the total power consumption at its Ghaziabad and Bulandshahr plants met by solar energy, and nearly 5% at the Pathredi plant. The company continues to invest in technology-driven components for future needs, including alternative fuel solutions like hybrid, hydrogen, CNG, LNG, flex fuels, and biofuels, alongside traditional ICE and new-age electric powertrains. Royalty payments, averaging 1.6% of revenue, are made for technology inputs from partners like Kolbenschmidt, Honda Foundry, Fuji Oozx, and Riken, ensuring the company stays ahead in technological advancements like Euro 6 introduction.

Export markets faced significant headwinds due to global geopolitical tensions, resulting in a 20-22% drop in end-market volumes for OEMs in Europe, UK, and US. Despite this, Shriram Pistons' own export sales only dropped by 4-5% due to diversification into new applications like snowmobile, marine, compressor, and lawnmower. The company anticipates a recovery in export volumes this year, expecting them to return to normal and potentially exceed previous levels. The recent free trade agreement with the UK is viewed as highly beneficial, opening new opportunities for growth.