Sharda Motor Industries , a leading auto component manufacturer, has reported a robust 11% year-on-year growth in consolidated revenues, reaching INR 787.2 crores for Q2 FY26. The company has also made significant strides in expanding its product portfolio and global presence.

Financial Performance

Sharda Motor Industries demonstrated solid financial performance in the second quarter of FY26:

The company's gross profit growth of 4% aligns with the overall industry growth for the same period. However, EBITDA margins faced some pressure due to rising input costs, particularly from catalyst price increases.

Strategic Partnership with Donghee

In a significant move to enhance its technological capabilities, Sharda Motor Industries has entered into a technology license agreement with Donghee Industrial Company Limited, a South Korean Tier 1 auto component player. This partnership aims to strengthen Sharda's advanced suspension portfolio, focusing on chassis and suspension technologies, particularly control arms and subframes.

The collaboration with Donghee is expected to:

• Enable local manufacturing of critical components for Indian and global OEM platforms
• Expand Sharda's product offerings to include subframes and torsion beams
• Enhance the company's competitiveness in the lightweighting vertical

New Order Wins

Sharda Motor Industries has secured notable new orders:

Lightweighting Vertical

• Two new orders for control arms and links
• Combined annual value: US$14 million
• Lifetime value: US$70 million
• Start of Production (SOP): Expected in Q1 FY28

Global Business Vertical

• New order with annual value of US$4.8 million
• Lifetime value: US$24 million
• SOP: Expected in Q4 FY27 with gradual ramp-up over 2 years

These order wins underscore the company's growing presence in the lightweighting segment and its expanding global footprint.

Innovation and Future Outlook

Sharda Motor Industries continues to focus on innovation, filing one more patent during Q2 FY26, bringing its total to 16 patents filed to date. The company is actively pursuing growth opportunities in lightweighting, exports, and domestic emission control adjacencies.

The management remains optimistic about the company's prospects, citing strong consumer demand, a favorable festive season, and improving supply chain conditions in the Indian automobile industry. With its strategic initiatives and expanding product portfolio, Sharda Motor Industries is well-positioned to capitalize on the evolving dynamics of the automotive sector.

As the company navigates the changing landscape of the auto component industry, it continues to focus on technological advancements and market expansion to drive sustainable growth in the coming years.

Sharda Motor Industries , a prominent player in the auto component sector, has reported mixed financial results for the second quarter. The company saw an increase in revenue but experienced a decline in net profit compared to the same period last year.

Revenue Growth

Sharda Motor Industries reported a consolidated revenue of ₹7,872.00 crore for Q2, marking a significant increase from ₹7,113.00 crore in the corresponding quarter of the previous year. This represents a year-on-year growth of approximately 10.67%.

Profit Decline

Despite the revenue growth, the company's consolidated net profit for Q2 stood at ₹747.00 crore, down from ₹787.00 crore in the same quarter last year. This translates to a year-on-year decrease of about 5.08% in net profit.

EBITDA and Margin Compression

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also saw a slight decline:

The EBITDA margin compressed by 161 basis points, indicating increased cost pressures or changes in the product mix affecting profitability.

Management's Perspective

While the company has not provided specific comments on the results, the mixed performance suggests that Sharda Motor Industries is navigating a challenging environment. The revenue growth indicates strong demand for its products, but the decline in profitability points to potential cost pressures or competitive dynamics in the auto component sector.

Looking Ahead

Investors and analysts will be keen to see how Sharda Motor Industries addresses the margin compression in the coming quarters. The company's ability to maintain revenue growth while improving profitability will be crucial for its future performance.

As the auto component industry continues to evolve, particularly with the ongoing transition towards electric vehicles, Sharda Motor Industries' strategies to adapt and innovate will be critical in shaping its market position.