Sandhar Technologies Limited , a prominent player in the automotive components industry, has recently made a strategic move in the renewable energy sector. The company has acquired a 4.51% shareholding in Clean Renewable Energy KK 1A Private Limited, marking its entry into the green energy space.

Acquisition Details

The acquisition was completed through a Share Subscription and Shareholders Agreement (SSSHA) for a total cash consideration of ₹2.72 crore. This move aligns with Sandhar Technologies' efforts to diversify its portfolio and tap into the growing renewable energy market.

Regulatory Compliance

In compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Sandhar Technologies Limited has duly informed the National Stock Exchange of India Limited and BSE Limited about this development. The company's Chief Financial Officer & Company Secretary, Yashpal Jain, confirmed the execution of the SSSHA in an official communication.

Background of the Transaction

This acquisition is not an isolated event but part of a series of strategic moves by Sandhar Technologies. The company had previously made intimations regarding this matter, indicating a well-planned approach to this investment.

Implications for Sandhar Technologies

While the 4.51% stake represents a minority holding, it signifies Sandhar Technologies' intent to explore opportunities beyond its core automotive component business. This diversification into the renewable energy sector could potentially open new avenues for growth and align the company with the global shift towards sustainable energy solutions.

Market Response

Investors and market analysts will likely be watching closely to see how this strategic investment impacts Sandhar Technologies' overall business strategy and financial performance in the coming quarters. The renewable energy sector in India has been gaining significant traction, and this move could position Sandhar Technologies to capitalize on the growing demand for clean energy solutions.

As the renewable energy landscape continues to evolve, Sandhar Technologies' entry into this sector through Clean Renewable Energy KK 1A Private Limited will be an interesting development to monitor in the context of the company's long-term growth strategy.

Sandhar Technologies Limited , a leading auto component manufacturer, reported a robust 21% year-on-year revenue growth in the first quarter, despite facing margin pressures due to various factors. The company's performance reflects its resilience in a challenging market environment and its strategic focus on core business areas.

Revenue Growth and Market Performance

Sandhar Technologies achieved a consolidated revenue growth of 21% compared to the same quarter of the previous year, with its India business growing by an impressive 22%. This growth comes despite supply chain issues affecting two major customers, which resulted in a business loss of approximately INR 20.00 crores for the quarter.

Margin Pressures and Exceptional Items

The company's consolidated EBITDA margin declined to 9.18% from 9.85% in the corresponding quarter of the previous year. This decline was attributed to several factors:

• A foreign currency translation loss of INR 4.50 crores
• Commodity price impact of INR 3.00 crores
• One-time power costs in Mexico amounting to INR 2.00 crores
• Supply issues with two major customers leading to a business loss of INR 20.00 crores
• Transition from BS IV to BS V in the construction sector affecting quarterly sales

Overseas Operations

Sandhar's overseas subsidiaries faced challenges, registering a loss of EUR 1.06 million, including a foreign exchange translation loss of EUR 0.46 million. The company has taken steps to reduce costs, increase operational efficiency, and expand its customer and product base in these markets.

Joint Ventures and Business Consolidation

As part of its strategic review, Sandhar Technologies has exited two joint ventures while maintaining five profitable JVs with a total investment of INR 62.72 crores. The company is focusing on consolidating its business activities and core competencies.

Electric Vehicle (EV) Segment

Sandhar has made strides in the EV segment, commencing commercial production of battery chargers, motor controllers, and DC-DC converters. The company generated INR 2.00 crores in revenue from EV products in the first quarter, indicating a positive start in this growing market segment.

Future Outlook

Despite the challenges faced in Q1, Sandhar Technologies' management maintains its guidance of a 0.5% EBITDA margin improvement for the full year. The company expects Q2 performance to be considerably better than Q1, driven by stabilization of new businesses and the normalization of one-off factors.

Management Commentary

Jayant Davar, Chairman, Managing Director, and CEO of Sandhar Technologies, commented on the results: "We are pleased with our revenue growth this quarter, despite facing some temporary headwinds. Our focus on core business areas and strategic initiatives positions us well for improved performance in the coming quarters. We remain committed to our growth trajectory and enhancing shareholder value."

The company is also undertaking a restructuring initiative to create more focused and autonomous business verticals, which is expected to drive growth and improve market positioning in the coming years.

Sandhar Technologies continues to navigate the evolving automotive landscape, balancing its traditional strengths with investments in new technologies and market segments. The company's performance in the coming quarters will be crucial in demonstrating the effectiveness of its strategic initiatives and its ability to capitalize on the recovering automotive market.