Sterling Tools Limited reported a standalone net profit of ₹1,640.25 lakhs for the first quarter of FY27 (Q1FY27), ended June 30, 2026, marking a 48.5% year-on-year increase from ₹1,104.95 lakhs in the same period last year. The growth was driven by a robust 23.8% rise in revenue from operations to ₹19,940.17 lakhs, supported by improved operating efficiency that expanded the EBITDA margin to 15.4% from 15.0%. Managing Director Atul Aggarwal attributed the outperformance to increased wallet share with existing customers and deeper OEM relationships, allowing the company to outperform the broader automotive industry despite rising input costs.

The Board of Directors approved the unaudited financial results on August 5, 2026. Statutory auditors Walker Chandiok & Co LLP conducted a limited review pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the earnings call held on August 6, 2026, management highlighted that while steel prices increased during the quarter, disciplined cost management and existing pricing arrangements limited the impact. However, with lower-cost inventory largely utilized, higher steel price impacts are expected to be more visible in the coming quarter, though management remains confident in its pass-through mechanism.

Financial Performance

The company demonstrated strong top-line momentum and improved bottom-line metrics in Q1FY27. Standalone profit before tax rose 47.9% to ₹2,196.18 lakhs from ₹1,485.51 lakhs in Q1FY26. Total income increased by 23.7% to ₹20,185.51 lakhs, while total expenses grew at a slower pace of 21.3% to ₹17,989.33 lakhs. This divergence contributed to the expansion in operating margins. The standalone business remains net debt-free and strongly cash-generative.

Consolidated net profit attributable to owners of the holding company stood at ₹585.82 lakhs, compared to ₹898.88 lakhs in Q1FY26. Consolidated revenue from operations grew 11.4% to ₹21,407.13 lakhs. The divergence between standalone and consolidated performance highlights ongoing margin pressures within subsidiary entities, particularly in the e-mobility segment, where subsidiaries reported a total net loss after tax of ₹923.83 lakhs for the quarter.

Strategic Investments and Capacity Expansion

Management outlined significant capital expenditure plans to support future growth. The Board authorized an equity investment of up to ₹15 crores in Sterling Tech – Mobility Limited (STML), a wholly-owned subsidiary, to meet its working capital requirements as it scales operations. Additionally, the company announced an ₹80 crore capex plan for its standalone fasteners business, focused on expanding existing facilities in Bangalore and NCR. This investment aims to build capacity to support potential revenue of ₹1,000 crores, with benefits expected to materialize in the second half of FY27 and beyond.

In the e-mobility segment, Sterling E-Mobility (SEM) is engaged in 33 active customer programs and has received business confirmations from four OEMs. SEM expects to commission onboard charger and multifunction unit production lines in Q2FY27. Commercial supplies for STML’s high-voltage DC contactors are scheduled to commence in Q2FY27. Management projects both SEM and STML to reach breakeven in FY28, at revenue levels of approximately ₹175 crores for SEM and ₹70 crores for STML.

What the Numbers Show

The significant outperformance of standalone profit growth (48.5%) over consolidated profit decline (-34.8%) underscores the profitability concentration in the parent entity’s core fasteners business. While the core automotive components segment delivered strong operational leverage with EBITDA margins expanding by 40 basis points, the consolidated group faces drag from its e-mobility subsidiaries. The ₹15 crore injection into STML and the broader ₹80 crore capex signal management’s commitment to these strategic pivots despite current losses, aiming to convert early-stage investments into future revenue streams. With capacity utilization in the fastener business at 90-95%, the company is aggressively positioning itself to capture market share in a growing automotive sector.

Sterling Tools Limited has informed shareholders that its Board of Directors, at its meeting held on May 15, 2026, recommended a dividend of Rs. 2.75 per equity share of face value Rs. 2 each for the financial year ended March 31, 2026. The dividend is subject to approval by shareholders at the company's ensuing Annual General Meeting scheduled to be held in 2026. Shareholders holding equity shares as on the record date of August 28, 2026 will be eligible to receive the dividend in electronic form.

Dividend and TDS Framework

In accordance with the provisions of the Income-tax Act, 2025, dividend paid or distributed by a company is taxable in the hands of shareholders. Sterling Tools Limited is therefore required to deduct tax at source at the time of dividend payment. The applicable TDS rates vary based on shareholder category and the documents submitted. The following table summarises the TDS structure:

TDS Provisions for Resident Shareholders

For resident shareholders, TDS will be deducted under Section 393(1) [Table: S.No.7] read with Section 393(4) [Table Sr. no. 10] of the Act at 10% on the dividend amount, unless an exemption applies. TDS will not apply if the aggregate dividend paid to a resident shareholder during the financial year does not exceed Rs. 10,000/-. Shareholders may submit Form 121 to claim NIL deduction, provided all eligibility conditions are met. The following categories of resident shareholders may claim NIL or lower TDS on submission of the required self-declarations and supporting documents:

• Insurance companies: Declaration under Section 393(4) [Table: S.No.10] with self-attested registration certificate and PAN card
• Mutual Funds: Declaration of eligibility under Schedule VII (Table: Sl. No. 20 or 21) of Section 11 of the Act, with registration documents and PAN card
• Alternative Investment Funds (AIF) established in India: Declaration of eligibility under Schedule V [Table: Sl. No. 1] of Section 11 of the Act for Category I or Category II AIFs, with registration documents and PAN card
• New Pension System Trust: Declaration with documentary evidence and self-attested PAN card
• Other shareholders: Declaration with relevant documentary evidence and self-attested PAN card
• Shareholders with valid lower/nil deduction certificate: Certificate under Section 395(1) of the Act along with declaration

TDS Provisions for Non-Resident Shareholders

For non-resident shareholders, tax is required to be withheld under Section 393(2) [Table Sl. No 17] read with Section 207(1) [Table Sl. No. 1] of the Act at 20% plus applicable surcharge and cess. Non-resident shareholders may opt for the beneficial provisions of the applicable Double Tax Avoidance Agreement (DTAA) between India and their country of tax residence under Section 159 of the Act. To avail DTAA benefits, non-resident shareholders must submit the following documents:

• Self-attested copy of PAN card, if allotted by Indian Income Tax Authorities
• Self-attested copy of Tax Residency Certificate (TRC) from the tax authorities of the country of residence
• Electronically generated Form 41 from the income tax portal
• Self-declaration confirming DTAA eligibility and beneficial ownership
• In case of Foreign Portfolio Investors, self-attested copy of SEBI registration certificate
• For shareholders tax resident in Singapore, additional evidence demonstrating non-applicability of Article 24 (Limitation of Relief) under the India-Singapore DTAA

Document Submission and Key Deadlines

All tax exemption forms and supporting documents must be uploaded on or before August 28, 2026 with Mas Services Limited, the Registrar and Share Transfer Agent, at the designated portal. Resident individual shareholders holding shares in dematerialised form may alternatively submit Form 121 through the NSDL/CDSL Tax Service Platform. Any declaration received after the cut-off date of August 28, 2026 will not be accepted by the company.

Bank Account and PAN Updation

In accordance with SEBI Notification No. SEBI/LADNRO/GN/2025/273 dated November 18, 2025, all dividend payments will be made exclusively in electronic mode. No payable-at-par warrants, cheques, or drafts will be issued. Shareholders holding shares in demat mode are requested to update their correct core banking account number, including the 9-digit MICR Code and 11-digit IFSC Code, with their respective depository participants. Shareholders in physical form are requested to communicate such details to Mas Services Limited. Failure to update bank details will result in non-payment of dividend. The company has clarified that TDS will be deducted based on records available with the RTA, and no requests for revision of TDS returns will be entertained.