Suprajit Engineering Limited

Suprajit Engineering reported a robust H1 FY26, with consolidated revenue (excluding SCS) growing 6.4% YoY to INR1,605 crores. Operational EBITDA saw a significant increase of 16.8% to INR215 crores. Standalone revenue also grew 6.1% to INR877 crores, though standalone operational EBITDA remained flat at INR145 crores. The company achieved a consolidated EBITDA margin of 14% excluding SCS, and approximately 11.5% including SCS, indicating a strong financial performance despite a challenging global environment.

The core Suprajit Controls Division (SCD) delivered strong results, with operational revenue growing approximately 7% YoY and operational EBITDA surging by 50%, reaching an 11.6% margin. The acquired SCS entity contributed INR109 crores in revenue, and its EBITDA loss was reduced to INR6.7 crores. Management is confident that SCS will achieve EBITDA positive status by Q4 FY26 and will be fully integrated into SCD by the end of the current financial year. Major restructuring efforts, including moving operations from Juarez to Matamoros and reducing German headcount, are on track for completion by December 2025.

The Phoenix Lamps Division (PLD) experienced a decline in revenues, leading to a reduction in its EBITDA margin to 12.7% from 15% in the previous year. This was primarily attributed to a steep reduction in exports to Middle Eastern countries and specific brands. However, management anticipates a stronger second half, driven by new inquiries resulting from industry consolidation, including a global competitor filing for Chapter 11. The company is also actively working on expanding its retail presence in the North American market.

The Suprajit Electronics Division demonstrated exceptional growth, with revenue increasing by 36% and EBITDA soaring by 251%, achieving a 13.5% margin, up from 5.2% last year. This strong performance was fueled by new order execution from various customers, particularly significant traction in throttle grips, which helped overcome a slowdown from a key EV customer. The division expects continued robust growth with multiple EV 2-wheeler and 3-wheeler projects slated for production in the coming quarters^⏳.

Suprajit showcased innovative technologies at EICMA 2025, including non-magnetic throttle controls and solar-based actuators, which generated substantial interest from global OEMs. The company's STC technology center is actively developing complex brake systems, such as Blubrake ABS, currently undergoing validation for two customer requirements. This focus on homegrown products and strategic collaborations is crucial for meeting evolving industry demands, especially with the impending ABS mandate, positioning Suprajit as a technology provider beyond just cables.

Management noted that the global automotive industry is experiencing low single-digit growth (1-3%), but Suprajit aims to grow 5-10% ahead of this trend. While EV traction has been slower than anticipated globally, leading to some OEM project postponements, these projects are considered delayed rather than denied, with new inquiries remaining strong. The company is actively mitigating tariff-related costs and strengthening its global footprint to capitalize on market consolidation and emerging opportunities, adapting to the dynamic industry landscape.

Working capital increased by INR70 crores in the first half, primarily due to the SCS Canada and China operations, impacting inventory and receivables. Management confirmed that restructuring costs, including approximately EUR1.1-1.2 million for employee separation in Germany, will continue to affect opex and employee costs until December 2025. These expenses are part of the ongoing efforts to optimize operations and improve overall efficiency across the group, with the expectation of cleaner operations post-restructuring.