Suprajit Engg.

Suprajit Engineering achieved a significant turnaround in Q4 FY26, with consolidated profit before tax (PBT) almost doubling to INR 97 crores compared to the previous year. This performance was largely driven by the successful restructuring and turnaround of SCS, which became EBITDA positive in Q4, improving from -20% in Q1 to +2%. Full-year consolidated revenue (excluding SCS) grew 8.7% to INR 3,377 crores, and operational EBITDA increased by 10.5% to INR 443 crores. The company also declared a higher dividend of INR 3.50 per share for the year.

The Controls division (SCD) saw a 10% revenue growth and achieved an 11% EBITDA margin, benefiting from major restructuring in North America, including consolidation of Mexican factories and warehouses. The Electronics Division grew robustly by 30% YoY, securing significant business momentum in digital clusters and electronic throttle controls. The Phoenix Lamps Division (PLD) experienced a 3% revenue decline and reduced EBITDA due to unpassed price increases and Middle East conflicts, while the Domestic Cable Division (DCD) maintained strong operational margins despite price concessions.

The Technology Center, with 150+ R&D employees and 43 patents filed, is actively developing new products. Key projects include designing a two-wheeler brake caliper for Indian OEMs, progressing on ABS with Bluebrake, and launching Sunroof Cables for multiple customers. These initiatives aim to premiumize offerings and expand beyond traditional cable products, with samples for medium-force actuators expected in the coming months. The new STC building is expected to be completed in Q3 FY27.

To better reflect its global and diversified product portfolio, Suprajit is renaming its divisions. The Domestic Cable Division (DCD) will become India Cables and Mechatronics (ICM), and the Suprajit Controls Division (SCD) will be Global Cables and Mechatronics (GCM). The Suprajit Electronics Division (SED) will now represent Sensors, Electronics, and Displays, while Phoenix Lighting and Electrical (PLE) will encompass lighting and other electrical products, moving beyond just lamps. These changes are product-focused and do not alter financial groupings.

For FY27, Suprajit projects double-digit group revenue growth and consolidated EBITDA margins in the range of 12% to 13.5%, inclusive of SCS. This growth is expected to be driven by significant margin improvement in GCM (from 6% to 10-12%), double-digit growth in ICM and SCD, and new business wins in India and China. The company anticipates tariff recoveries and capitalizes on market consolidation, particularly in the Phoenix Lamps division following a competitor's insolvency. The Electronics Division is expected to maintain comfortable double-digit margins.

Suprajit plans a capital expenditure of INR 200 crores for FY27, allocated across India operations (approximately INR 80 crores), global operations (approximately INR 50 crores), STC (approximately INR 50 crores), and corporate IT infrastructure (approximately INR 15-16 crores). This includes investments for land purchase, building completion, and capacity expansion. As of March 2026, total debt stood at INR 785 crores, with a surplus cash balance of INR 235 crores invested in mutual funds, indicating a healthy financial position.

The company is actively pursuing tariff recoveries from customers and the government, expecting a full resolution within a few months. While some past tariffs are being recovered, approximately USD 1-2 million in US tariffs, primarily on steel imports for Mexico, have been permanently absorbed as an additional material cost and are factored into future margin guidance. Additionally, a USD 6 million 301 tariff recovery case with the Federal Government is in its final stages, with a resolution expected in 3-6 months.