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.

SAL Automotive Limited , a key player in the automobile components and agriculture implements sectors, has reported a robust performance for the second quarter and half-year ended September 30, 2025. The company's Board of Directors has also given the green light to significant expansion plans, signaling confidence in future growth prospects.

Financial Highlights

For the quarter ended September 30, 2025, SAL Automotive reported:

The company's performance shows a notable year-on-year improvement, with income from operations increasing by 14.2% and net profit after tax growing by 18.5% compared to the same quarter in the previous year.

Half-Year Performance

For the half-year ended September 30, 2025:

While the half-yearly results show growth in income, there has been a slight decline in net profit after tax compared to the previous year.

Segment-wise Performance

SAL Automotive operates in two primary segments:

1. Automobile Components: This segment, which includes tractor seats, LCV seats, seat mechanisms, and seat frames for passenger and commercial vehicles, reported revenue of Rs. 8,794.00 lakhs for H1 2025.

2. Agriculture Implements: This segment, comprising rotavators, tractor trailers, box scrappers, and rotary tillers, generated revenue of Rs. 11,993.00 lakhs for H1 2025.

Expansion Plans

The Board of Directors has approved two significant expansion initiatives:

1. A new satellite plant at Haridwar for the seat frames business.
2. A new shed at the Nabha plant with a 1,00,000 square feet area for capacity enhancement.

These expansions aim to boost the company's production capabilities and meet growing market demands.

Capital Structure Update

In April 2025, SAL Automotive issued bonus shares in the ratio of 1:1, allotting 23,97,713 equity shares to eligible shareholders. This has resulted in an increase in the number of fully paid equity shares and a corresponding increase in paid-up share capital.

Financial Position

As of September 30, 2025:

• Total Assets: Rs. 14,513.00 lakhs
• Total Equity: Rs. 4,454.00 lakhs
• Current Liabilities: Rs. 9,465.00 lakhs

The company maintains a strong balance sheet, providing a solid foundation for its expansion plans.

SAL Automotive's Q2 results and expansion plans reflect its commitment to growth and adaptation to market demands in both the automobile components and agriculture implements sectors. The approved expansions are expected to strengthen the company's market position and potentially drive future revenue growth.