Sterling Tools Limited has announced its audited standalone and consolidated financial results for the fourth quarter and financial year ended March 31, 2026. The Board of Directors, in its meeting held on May 15, 2026, approved the results and recommended a final dividend of ₹2.75 per share (face value of ₹2 per share) for FY26, up from ₹2.50 per share in the previous year, subject to shareholder approval at the ensuing Annual General Meeting. The statutory auditors, M/s Walker Chandiok & Co LLP, issued an unmodified audit opinion on both standalone and consolidated financial results.

Standalone Financial Performance

On a standalone basis, the company delivered a strong performance for FY26. Revenue from operations rose to ₹71,672.27 lakh from ₹64,478.34 lakh in the prior year, while total income stood at ₹72,587.32 lakh. Net profit for the full year climbed to ₹6,420.21 lakh from ₹4,286.97 lakh. For Q4, standalone net profit surged to ₹2,385.05 lakh from ₹1,126.17 lakh in the year-ago quarter. Profit before tax for the year was ₹8,354.29 lakh, supported by exceptional items of ₹949.64 lakh representing enhanced compensation received from Delhi Metro Rail Corporation (DMRC) against land acquired in an earlier year. Basic earnings per share for FY26 stood at ₹17.73, compared to ₹11.89 in the prior year.

The standalone balance sheet reflects a healthy financial position, with total assets of ₹69,774.90 lakh as at March 31, 2026, against ₹63,578.46 lakh a year earlier. Total equity stood at ₹52,850.45 lakh, with other equity of ₹52,123.56 lakh. Cash and cash equivalents improved significantly to ₹3,452.63 lakh from ₹668.11 lakh. Net cash from operating activities for FY26 was ₹8,335.78 lakh.

Consolidated Financial Performance

On a consolidated basis, the group reported total income of ₹83,950.51 lakh for FY26, compared to ₹1,03,795.35 lakh in the prior year. Consolidated revenue from operations stood at ₹82,780.78 lakh. Net profit for the year came in at ₹2,932.84 lakh, compared to ₹5,829.31 lakh previously. For Q4, consolidated total income was ₹22,492.46 lakh versus ₹20,569.48 lakh in the year-ago quarter, while consolidated net profit stood at ₹159.03 lakh compared to ₹881.17 lakh. The decline in consolidated profitability was attributed to a shift in the customer mix of a subsidiary company and a provision for expected credit loss recognised for a customer where legal recourse is pending at the National Company Law Tribunal (NCLT). Basic earnings per share on a consolidated basis for FY26 were ₹8.10, against ₹16.17 previously.

The consolidated balance sheet showed total assets of ₹82,111.45 lakh as at March 31, 2026, against ₹79,068.47 lakh a year earlier. Total equity stood at ₹52,625.06 lakh. Net cash from operating activities on a consolidated basis was ₹5,595.42 lakh for FY26.

Subsidiary: Sterling E-Mobility Solutions Limited

The Board approved an investment of up to ₹20 crore in Sterling E-Mobility Solutions Limited (formerly known as Sterling Gtake E-Mobility Limited), a wholly-owned subsidiary, through a rights issue in one or more tranches, to facilitate capital expenditure and working capital requirements. The investment will be made through cash consideration at a fair market value of ₹10 per share, with no change in the percentage of shareholding. Sterling E-Mobility Solutions Limited is engaged in the Electric Vehicle industry and was incorporated on January 10, 2020. The subsidiary's turnover over the last three financial years is presented below:

Management and Corporate Updates

The Board approved the appointment of Mr. Anish Agarwal as Chief Financial Officer (CFO) and Whole-Time Director of the company with effect from May 15, 2026, for a term of five years, subject to shareholder approval. A remuneration of ₹1 crore per annum is proposed for a duration of three years, commencing from July 1, 2026 and ending on June 30, 2029. Mr. Agarwal is a third-generation entrepreneur with degrees in Manufacturing and Mechanical Engineering from the University of Warwick and an MBA from Imperial College Business School, London. He is a relative of Mr. Anil Aggarwal, Chairman, and Mr. Akhill Aggarwal, Whole-Time Director of the company. The Board also approved the appointment of M/s Profads Consulting as Internal Auditors of the company for FY 2026-27. The earnings conference call held on May 18, 2026, was attended by Mr. Atul Aggarwal, Managing Director; Mr. Jaideep Wadhwa, Director; and Mr. Anish Agarwal, Director & CFO. The company confirmed that no unpublished price-sensitive information was shared during the discussion.

Labour Code Impact

Following the Government of India's notification of four Labour Codes on November 21, 2025, consolidating twenty-nine existing labour laws, Sterling Tools has assessed and disclosed the incremental impact. On a standalone basis, the incremental impact on provision for gratuity was ₹146.78 lakh and on provision for long-term compensated absences was ₹15.05 lakh. On a consolidated basis, the incremental impact on provision for gratuity was ₹160.55 lakh and on provision for long-term compensated absences was ₹27.44 lakh, primarily arising due to changes in the definition of wages. The company will continue to monitor the finalisation of Central and State Rules and further government clarifications.

Future Outlook and Strategy

During the earnings conference call, management provided an outlook for the industry and the company. The Indian automobile industry witnessed strong recovery in FY26, with passenger vehicles recording highest ever annual sales of 46.4 lakh units and 2-wheelers achieving highest ever annual sales of 2.17 crore units. The company expects its standalone fastener business to grow faster than the automotive industry. Management noted that while steel prices are a straight pass-through with customers, inflationary pressures on energy, chemicals, and plastics may cause short-term margin pressure in Q1 FY27, though steady-state EBITDA margins are expected to be maintained around 15%.

The company outlined its capital expenditure plans, expecting capex for the Fasteners business in FY27 to be around INR75 crores, primarily towards capacity expansion and operational enhancements. This investment is expected to support revenue potential up to INR900 crores to INR1,000 crores. Regarding the Electric Vehicle (EV) business, management indicated that EV adoption timelines have shifted by nearly 3 to 5 years due to slower than expected penetration. Consequently, the target for 50% of revenue from non-fastener businesses has been pushed back. The subsidiary Sterling E-Mobility Solutions (SEM) is not expected to be profitable in FY27 but is on track to regain profitability by FY28. Commercial supplies for OBC and DC/DC converters are expected to commence from Q3 FY27 onwards. The company also highlighted its entry into advanced rider safety solutions through a partnership with Nanjing Haohang for Advanced Rider Assistance Systems (ARAS).

Sterling Tools Limited has formalized its strategic partnership with Nanjing Haohang Technology Co., Ltd., China through a technical collaboration agreement and supply agreement for Advanced Rider Assistance Systems (ARAS). The company disclosed this development through a regulatory filing under Regulation 30 of SEBI Listing Regulations.

Agreement Structure

The collaboration encompasses both technical collaboration and supply agreements aimed at localizing engineering, system adaptation, manufacturing and sales of advanced rider assistance systems specifically suited for the Indian two-wheeler market. This comprehensive approach ensures complete technology transfer and market adaptation.

Regulatory Compliance

Sterling Tools filed the disclosure on April 27, 2026, pursuant to Regulation 30 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The agreement is classified as an international collaboration with no related party transactions involved. Company Secretary Pragya Saxena signed the regulatory filing confirming compliance with all disclosure requirements.

Strategic Rationale

The technical collaboration agreement aims to enable Advanced Rider Assistance System (ARAS) capabilities specifically designed for the Indian two-wheeler market. The partnership leverages Nanjing Haohang Technology's expertise while establishing local engineering capabilities to adapt systems for Indian driving environments and regulatory requirements.

Market Positioning

This formalized partnership positions Sterling Tools to capitalize on the growing demand for safety technology in India's two-wheeler segment. The focus on localization ensures that the advanced rider assistance systems will be tailored to meet specific Indian market conditions, driving environments, and regulatory standards.