Uniparts India

Uniparts India reported robust financial results for Q4 FY26, with revenue growing 31% year-on-year and 18% sequentially to ₹339 crores. For the full fiscal year 2026, revenue increased by 21% over FY25, surpassing the earlier guidance of mid-teens growth. The company achieved an EBITDA margin of 24% in Q4 and 22% for the full year, with EBITDA growing over 55% for FY26. Profit after tax for Q4 stood at ₹51 crores, up 124% YoY, contributing to a trailing 12-month EPS of ₹35.07, an 80% increase from FY25.

The global agriculture and construction equipment cycles are showing signs of turning positive. North American construction equipment demand is expected to strengthen in FY27, supported by investments in data centers and infrastructure. European construction markets appear to have passed their cyclical low, with recovery visible in Q4 FY26. The small agriculture market in North America is on a path to recovery, projected to grow approximately 5% in FY27, while Europe shows early signs of stabilization. The large agricultural machinery segment is working through its down cycle, with Q4 FY26 identified as a cyclical trough.

The company demonstrated strong operational resilience in the face of challenges. A fire incident at its Ludhiana facility in Q3 FY26, affecting the finishing shop, was swiftly managed with interim arrangements and is fully covered by insurance, including loss of profit. Furthermore, Uniparts effectively navigated supply chain uncertainties arising from the West Asia escalation in March, implementing alternate arrangements to ensure uninterrupted customer supplies. While input prices increased, favorable exchange rates helped mitigate some of this inflation.

Uniparts' strategic focus on new business momentum has yielded significant results, with trailing 12-month business wins exceeding ₹225 crores in annualized potential. These wins are broad-based across construction and agriculture segments, with a particular emphasis on large ag and PMP (Precision Machine Parts) segments, which account for about 70% of new business efforts. The company's diversified presence across tractor platforms and its aftermarket sector continue to be stable contributors, positioning it well for recovery.

The improved profitability, particularly the 24% EBITDA margin in Q4, was driven by operating leverage from increased volumes and conscious cost discipline throughout the year. Management reiterated its commitment to maintaining EBITDA margins comfortably above 20% over the cycle. The material cost of 35% in Q4 returned to the normal range of 34-37%. The company's warehousing sales, a high-margin segment, also saw an increase sequentially from Q3 to Q4, further contributing to margin expansion.

Uniparts maintains a strong balance sheet with a net cash position of ₹160 crores as of March 2026. Capex plans remain consistent at 2.5% to 3.5% of revenue, focused on balancing capex to enhance capabilities and capacity. The company distributed a total dividend of ₹170 crores for FY26, including a special dividend of ₹101 crores in Q3. Regarding acquisitions, Uniparts has evaluated a dozen targets since its IPO but has not proceeded with any, partly due to not meeting its criteria for adding a meaningful third platform, manageable size, and ROE/ROCE accretiveness.