SAL Automotive Limited has released its unaudited financial results for the quarter and nine months ended December 31, 2025, showing mixed performance with sequential revenue decline but stable year-over-year growth for the nine-month period.

Financial Performance Overview

The company's financial performance for Q3FY26 reflected challenging market conditions with sequential decline in key metrics:

Nine-Month Performance Analysis

For the nine months ended December 31, 2025, SAL Automotive demonstrated resilience with improved performance compared to the corresponding previous period:

Impact of Labour Code Implementation

The company's results were significantly affected by the implementation of new Labour Codes notified by the Government of India on November 21, 2025. These codes consolidated twenty-nine existing labour laws into a unified framework, introducing changes including uniform wage definitions and enhanced leave benefits.

The financial implications included:

• Increased gratuity liability from past service costs
• Enhanced leave liability provisions
• Total impact of ₹58 lakhs classified as exceptional items

This non-recurring impact was presented under 'Impact of Labour Codes' in the exceptional items section for Q3FY26 and nine-month results.

Corporate Actions and Capital Structure

SAL Automotive implemented a significant corporate action during the financial year:

The bonus issue was executed by capitalizing General Reserve, resulting in doubled equity shares and corresponding increase in paid-up share capital from ₹240 lakhs to ₹480 lakhs.

Regulatory Compliance and Governance

The financial results underwent comprehensive review and approval processes. The Audit Committee reviewed the results, followed by Board of Directors' approval at their meeting held in Ghaziabad on February 3, 2026. Statutory auditors conducted a limited review of the financial results, ensuring compliance with regulatory requirements.

The company continues monitoring developments regarding Rules to be notified by regulatory authorities, including clarifications and additional guidance, while assessing ongoing accounting implications based on such developments.

SAL Automotive Limited announced its unaudited financial results for the third quarter of FY26 ended December 31, 2025, revealing a challenging performance with significant decline in profitability. The automotive components and agriculture implements manufacturer faced headwinds that impacted both quarterly and nine-month financial metrics.

Financial Performance Overview

The company's financial performance showed mixed results across different time periods:

Exceptional Items Impact

The quarter was significantly affected by exceptional items worth ₹58 lakhs arising from the implementation of new Labour Codes. On November 21, 2025, the Government of India notified provisions of four consolidated labour codes that replaced twenty-nine existing labour laws. These changes resulted in increased gratuity liability from past service costs and enhanced leave liability benefits for employees.

Segment-wise Performance

SAL Automotive operates through two primary business segments with varying performance levels:

The automobile components segment, which includes tractor seats, LCV seats, seat mechanisms and seat frames, demonstrated strong growth. Conversely, the agriculture implements segment, comprising rotavators, tractor trailers, box scrapers and rotary tillers, experienced a notable decline.

Cost Structure Analysis

The company's cost management showed mixed results during the quarter. Cost of materials consumed decreased to ₹6606 lakhs from ₹7423 lakhs year-on-year, representing an 11.01% reduction. However, employee benefits expenses increased significantly to ₹1305 lakhs from ₹1168 lakhs, marking an 11.73% rise. Finance costs also increased to ₹53 lakhs from ₹47 lakhs in the corresponding quarter.

Capital Structure Changes

SAL Automotive implemented a significant capital restructuring during FY26. The company issued bonus shares on April 4, 2025, in a 1:1 ratio, allotting 2397713 equity shares to eligible shareholders by capitalizing general reserves. This resulted in the paid-up equity share capital increasing to ₹480 lakhs from ₹240 lakhs, effectively doubling the number of outstanding shares.

Operational Facilities

The company operates from multiple locations across India, with its registered office in Mohali, Punjab, and manufacturing facilities in Dharwad (Karnataka), Rudrapur (Uttarakhand), and Pune (Maharashtra). SAL Automotive maintains various quality certifications including ISO 14001 Environmental Management, ISO 45001 Occupational Health and Safety Management, and IATF 16949 Automotive Quality Management standards.