Any current/future new fundraising through debt or equity?

The transcript does not mention any current or planned fundraising through debt or equity. The company discusses significant capital expenditure plans (INR 150-200 crores over next 3 years) for non-fastener businesses like SGEM/SEM and STML but does not specify the funding sources. Emphasis is on internal investments for growth in EV-related segments, with no reference to external fundraising. Management highlights optimism about future growth but does not indicate any immediate plans to raise funds through equity or debt.

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

Fastener business capex plan for FY '26: INR 15-20 crores. Total projected capex for Sterling Tools Limited (STML) this year: Approximately INR 50 crores, mostly to be spent in FY '26. Sterling GTAKE (now Sterling E-Mobility) capex for FY '26: INR 20-25 crores. For FY '27, capex plans are being finalized and will be communicated later. Capex for assembling rare earth magnet-free motors: INR 15-25 crores for assembly lines plus INR 15-20 crores for tooling (total INR 35-40 crores approx.). Investment forecast: INR 150-200 crores over next 3 years in non-fastener businesses including S

Future growth expectations in sales/revenue/volumes?

Revenue from domestic OEMs expected to begin in FY '27. Growth in standalone fastener business remains stable, growing faster than industry despite a 5.1% industry decline in Q1 FY'26. SGEM actively working with 28 customer programs across 2-wheelers, 3-wheelers, LCVs, and HCVs, focusing on product diversification in electrification. Non-fastener businesses (SGEM/SEM and STML) targeted for INR 150-200 crores investment over next 3 years with revenue potential INR 500-1000 crores depending on market penetration and policies. New product lines (integrated motors, MCUs, DC contactors, rare earth-

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

Revenue from domestic OEMs is expected to start in FY '27, marking growth initiation in new segments. Non-fastener businesses (SGEM/SEM and STML) plan a capital investment of INR 150-200 crores over the next 3 years, aiming to build future-ready EV ecosystem products. These non-fastener ventures aim for INR 500-1000 crores in revenue potential, depending on market penetration and government policies. SGEM expects to maintain or improve its current quarter MCU run rate (INR 30-35 crores) in upcoming quarters. STML revenue is anticipated to begin in FY '27, targeting INR 150-200 crores over 5 ye

Current/ Expected Orderbook/ Pending Orders?

Sterling Tools Limited is actively working with partners to make technical proposals to meet customer requirements. No specific numerical details about the current or expected order book or pending orders are provided in the transcript. The company expects revenue from domestic OEMs to start kicking in from FY '27. They are involved in mapping customer requirements for new products like magnet-free motors but have not secured manufacturing orders in India for them yet. Several programs with OEMs, especially in the electric vehicle and heavy commercial vehicle segments, are underway with antici

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Sterling Tools LtdQ2 FY25Auto Components

Sterling Tools Ltd Q2 FY25 Earnings Call Analysis

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

Price: ₹275P/E: 29.0Market Cap: ₹951 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

→Revenue from domestic OEMs expected to begin in FY '27.
→Growth in standalone fastener business remains stable, growing faster than industry despite a 5.1% industry decline in Q1 FY'26.
→SGEM actively working with 28 customer programs across 2-wheelers, 3-wheelers, LCVs, and HCVs, focusing on product diversification in electrification.
→Non-fastener businesses (SGEM/SEM and STML) targeted for INR 150-200 crores investment over next 3 years with revenue potential INR 500-1000 crores depending on market penetration and policies.
→New product lines (integrated motors, MCUs, DC contactors, rare earth-free motors) launch and contribute over 2-5 years.
→Capex plans for FY '26 include INR 50 crores for STML, INR 15-20 crores for fasteners, and INR 20-25 crores for Sterling E-Mobility.
→Expected to regain or exceed prior MCU 2-wheeler revenue levels by end FY '27.
→Export revenues from new product components contributing, with ramp-up expected in near term.

Margin guidance

Category 3

→Revenue from domestic OEMs is expected to start in FY '27, marking growth initiation in new segments.
→Non-fastener businesses (SGEM/SEM and STML) plan a capital investment of INR 150-200 crores over the next 3 years, aiming to build future-ready EV ecosystem products.
→These non-fastener ventures aim for INR 500-1000 crores in revenue potential, depending on market penetration and government policies.
→SGEM expects to maintain or improve its current quarter MCU run rate (INR 30-35 crores) in upcoming quarters.
→STML revenue is anticipated to begin in FY '27, targeting INR 150-200 crores over 5 years.
→Overall, steady and incremental revenue/earnings growth is planned, leveraging first-mover advantages in EV-related technologies.
→Short-term setbacks due to product in-sourcing are expected to be recovered by FY '27 with diversified product launches.
→The company is optimistic about sustainable margin profiles, targeting double-digit margins in new product lines.

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Fundraise plans

→The transcript does not mention any current or planned fundraising through debt or equity.
→The company discusses significant capital expenditure plans (INR 150-200 crores over next 3 years) for non-fastener businesses like SGEM/SEM and STML but does not specify the funding sources.
→Emphasis is on internal investments for growth in EV-related segments, with no reference to external fundraising.
→Management highlights optimism about future growth but does not indicate any immediate plans to raise funds through equity or debt.

Order book

→Sterling Tools Limited is actively working with partners to make technical proposals to meet customer requirements.
→No specific numerical details about the current or expected order book or pending orders are provided in the transcript.
→The company expects revenue from domestic OEMs to start kicking in from FY '27.
→They are involved in mapping customer requirements for new products like magnet-free motors but have not secured manufacturing orders in India for them yet.
→Several programs with OEMs, especially in the electric vehicle and heavy commercial vehicle segments, are underway with anticipated revenue ramp-up in the near future.
→The company is focused on ramping up production and localization, aiming for revenue growth from new business lines over the next 2-5 years.
→There is ongoing engagement with 28 customer programs across multiple vehicle segments for MCUs and other products, indicating a growing pipeline of orders.

Capex plans

Yes

→Fastener business capex plan for FY '26: INR 15-20 crores.
→Total projected capex for Sterling Tools Limited (STML) this year: Approximately INR 50 crores, mostly to be spent in FY '26.
→Sterling GTAKE (now Sterling E-Mobility) capex for FY '26: INR 20-25 crores.
→For FY '27, capex plans are being finalized and will be communicated later.
→Capex for assembling rare earth magnet-free motors: INR 15-25 crores for assembly lines plus INR 15-20 crores for tooling (total INR 35-40 crores approx.).
→Investment forecast: INR 150-200 crores over next 3 years in non-fastener businesses including SGEM/SEM and STML.
→Strategic focus on import substitution and EV ecosystem, with greenfield manufacturing sites and technology collaborations.
→Overall approach considers capex as part of a broader strategic growth plan rather than focusing on individual ROI.

How does Sterling Tools Ltd rank vs peers in Auto Components?

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1Sterling Tools Ltd

Rev 3Mar 3

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