Any current/future new fundraising through debt or equity?

No specific mention of any current or immediate future fundraising through debt or equity in the transcript. The company has a strong liquidity position with over INR 782 crores in cash and equivalents as of September 30, 2024. On capital allocation, management indicated conservative approach toward M&A and selective incremental capex mainly on lightweighting and emission verticals. Incremental capex planned is modest and aligned with last 2 years' trajectory; primarily for capacity augmentation and new plants, no significant debt raising indicated. Management is focusing on efficient use of s

Any current/future capex/capital investment/strategic investment?

Core emission vertical: Capacity can be augmented easily with only incremental capex expected; no substantial capex anticipated. Capex trajectory to be similar to the last 2 years. Light-weighting vertical: Additional capital allocation ongoing, including INR 50 crores already invested in a new plant. Future capital and capacity investments will continue to build this vertical selectively. New suspension plant for control arms: Capex of INR 50 crores planned; plant expected to start operations in mid-December to early January with gradual ramp-up. M&A: Actively scanning for value-creatin

Future growth expectations in sales/revenue/volumes?

The company expects growth driven by new product launches and improved sales in rural markets, particularly in 2- and 3-wheelers and tractors, aided by favorable monsoons and rising mechanization. They aim for substantial growth in export revenues, especially after winning a significant U.S. emission components order with $5-7 million in first-year sales starting January 2026. Construction equipment segment offers new revenue opportunities from Jan 2025 due to evolving emission norms, though initially modest. The light-weighting vertical and suspension business are set for capacity expansion w

Future growth expectations in earnings/operating earnings/profits/EPS?

The company expects continued outperformance of industry gross profit growth, using gross profit as a key barometer rather than sales due to catalyst accounting nuances. EBITDA margins have shown steady improvement, supported by a shift to FOC model products which yield better profitability. Operating profit (EBITDA) grew 6% YoY in Q2 FY '25 and 20% in H1 FY '25, with margins improving by 178 bps and 258 bps respectively, indicating a positive margin trend. PAT for H1 FY '25 grew 15% YoY, showing strong bottom-line growth. New export orders, such as the $7 million emission components o

Current/ Expected Orderbook/ Pending Orders?

Sharda Motor Industries has won a significant export order for emission components to the U.S. market with an expected annual business of approximately $7 million and a lifetime business of over $40 million. SOP is expected by January 2026. The company is actively working on various RFQ (Request for Quotation) and business development pipelines to build export business substantially. In the light-weighting vertical, a new plant with a capacity of 280,000 control arms is being commissioned, with expected revenues starting marginally from Q4 FY '25 and gradual ramp-up thereafter. The compa

IN US

Sale is live|00:00:00left today

Sharda Motor Industries LtdQ3 FY24Auto Components

Sharda Motor Industries Ltd Q3 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹849P/E: 15.3Market Cap: ₹5.0K CrSector: Auto Components

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→The company expects growth driven by new product launches and improved sales in rural markets, particularly in 2- and 3-wheelers and tractors, aided by favorable monsoons and rising mechanization.
→They aim for substantial growth in export revenues, especially after winning a significant U.S. emission components order with $5-7 million in first-year sales starting January 2026.
→Construction equipment segment offers new revenue opportunities from Jan 2025 due to evolving emission norms, though initially modest.
→The light-weighting vertical and suspension business are set for capacity expansion with new plants launching in late 2024/Q1 2025, targeting both domestic and export growth.
→EBITDA margins expected to improve with FOC (Free of Catalyst) model contributing positively.
→The company plans incremental capex for emission products, maintaining current trajectories, and additional capex to scale the light-weighting vertical.
→Export business focus on 4 core areas: commercial vehicle emissions, temperature control tubes, stationary engine gensets, and small tractors.

Margin guidance

Category 3

→The company expects continued outperformance of industry gross profit growth, using gross profit as a key barometer rather than sales due to catalyst accounting nuances.
→EBITDA margins have shown steady improvement, supported by a shift to FOC model products which yield better profitability.
→Operating profit (EBITDA) grew 6% YoY in Q2 FY '25 and 20% in H1 FY '25, with margins improving by 178 bps and 258 bps respectively, indicating a positive margin trend.
→PAT for H1 FY '25 grew 15% YoY, showing strong bottom-line growth.
→New export orders, such as the $7 million emission components order for the U.S. starting January 2026, are expected to add significantly to revenues and earnings going forward.
→Incremental capex for core emission products will be modest; light-weighting vertical may require more capital, suggesting focused investments to drive growth.
→Overall, outlook remains positive with expectation of sustained earnings growth, improved margins, and expanding export contributions in coming years.

3 more insights locked — sign up free to unlock

Fundraise plans

→No specific mention of any current or immediate future fundraising through debt or equity in the transcript.
→The company has a strong liquidity position with over INR 782 crores in cash and equivalents as of September 30, 2024.
→On capital allocation, management indicated conservative approach toward M&A and selective incremental capex mainly on lightweighting and emission verticals.
→Incremental capex planned is modest and aligned with last 2 years' trajectory; primarily for capacity augmentation and new plants, no significant debt raising indicated.
→Management is focusing on efficient use of surplus cash through dividends and buybacks rather than aggressive fundraising.
→No timelines or plans for major equity or debt raising discussed during the call.

Order book

→Sharda Motor Industries has won a significant export order for emission components to the U.S. market with an expected annual business of approximately $7 million and a lifetime business of over $40 million. SOP is expected by January 2026.
→The company is actively working on various RFQ (Request for Quotation) and business development pipelines to build export business substantially.
→In the light-weighting vertical, a new plant with a capacity of 280,000 control arms is being commissioned, with expected revenues starting marginally from Q4 FY '25 and gradual ramp-up thereafter.
→The company is developing business in the commercial vehicle and stationary engine genset markets, including new relationships in construction equipment emission norms effective Jan '25.
→No specific exact figures for total pending order book disclosed, but multiple near-term growth avenues from new orders and market expansion efforts are evident.

Capex plans

Yes

→Core emission vertical: Capacity can be augmented easily with only incremental capex expected; no substantial capex anticipated. Capex trajectory to be similar to the last 2 years.
→Light-weighting vertical: Additional capital allocation ongoing, including INR 50 crores already invested in a new plant. Future capital and capacity investments will continue to build this vertical selectively.
→New suspension plant for control arms: Capex of INR 50 crores planned; plant expected to start operations in mid-December to early January with gradual ramp-up.
→M&A: Actively scanning for value-creating opportunities in powertrain-agnostic products but cautious and conservative with timing.
→Cash usage: Besides capex, the company is focusing on shareholder returns via buybacks and dividend policy; aiming for efficient use of surplus cash.

How does Sharda Motor Industries Ltd rank vs peers in Auto Components?

Pro feature

1Sharda Motor Industries Ltd

Rev 3Mar 3

See full Auto Components sector rankings

Want more stocks like Sharda Motor Industries Ltd?

Build an AI portfolio filtered by sector, market cap, and growth rank. Takes 2 minutes.

Build my portfolio