Sundaram Clayton Limited (SCL), a leading manufacturer of engineered aluminium die-cast components for the automotive sector, has reported a 9% year-on-year growth in EBITDA for the second quarter of fiscal year 2025-26, despite a decline in revenue. The company's financial results highlight its resilience in the face of challenging market conditions and strategic business decisions.

Financial Performance

Quarterly Results

SCL reported the following results for Q2 FY2025-26:

The company attributes part of this revenue decline to the sale of its 2W casting business in Hosur during Q4 FY2024-25. Despite the lower revenue, SCL's ability to improve its EBITDA demonstrates effective cost management and operational efficiency.

Half-Year Performance

For the half-year ended September 2025, SCL's financial results show:

The half-yearly figures further underscore SCL's ability to enhance profitability despite revenue challenges.

Market Overview and Operations

Domestic Market

The Indian automotive market shows promising signs for the second half of FY2025-26:

• Commercial Vehicle (CV) and Passenger Vehicle (PV) segments are expected to maintain growth momentum.
• Recent GST rate reductions are anticipated to boost overall demand.
• These factors contribute to a positive industry outlook in the domestic market.

Export Market

The North American automotive market, an important export destination for SCL, faces some headwinds:

• The market remains subdued due to ongoing tariff uncertainties in the United States.
• This situation may impact production schedules in the near term.

Operational Highlights

SCL's operations have received notable recognition:

• The company's state-of-the-art mega die-casting smart factory in Thervoy Kandigai Plant (TKP), Chennai, has garnered appreciation from customers for its logical flow and operational efficiency.
• SCL has been awarded by customers for its cost management and safety practices.
• The company received the Prithvi Award from the ESG Research Foundation, New Delhi.
• SCL also won the STAR Award for ESG practices from the Honorable Minister of Labor Welfare & Skill Development, Tamil Nadu.

USA Operations

In the United States, SCL is strategically positioned:

• The company remains a trusted partner to its customers.
• With a focus on local manufacturing, SCL is well-placed to leverage domestic growth opportunities in the USA over the long term.
• The company continues to engage closely with customers and launch new products.

Conclusion

Sundaram Clayton Limited's Q2 FY2025-26 results demonstrate the company's ability to improve profitability despite revenue challenges. The 9% growth in EBITDA, coupled with operational recognitions and strategic positioning in both domestic and international markets, indicates SCL's resilience and adaptability in a dynamic automotive component sector. As the company continues to focus on efficiency, innovation, and sustainability, it appears well-equipped to navigate the evolving landscape of the automotive industry.

Financial Performance

Sundaram-Clayton Limited (SCL), a leading manufacturer of engineered aluminium die-cast components for the automotive sector, reported a robust 16% improvement in EBITDA, reaching Rs. 70.60 crores compared to Rs. 61.10 crores in the same quarter of the previous year. The company's standalone revenue stood at Rs. 444.10 crores, down from Rs. 553.60 crores in the corresponding quarter last year. However, it's worth noting that the previous year's figure included revenue from the Hosur business, which was sold in the fourth quarter of the previous fiscal year.

Operational Highlights

India Operations

SCL's operations have ramped up smoothly at its new Thervoy Kandigai Plant (TKP) in Chennai, following the commencement of full-scale operations at its state-of-the-art mega die-casting smart factory. In a strategic move to enhance operational efficiencies, the company is consolidating its three plants (TKP, Oragadam, and Mahindra World City) into two (TKP and Oragadam). This consolidation process is in its final stages.

US Operations

Despite ongoing softness in the overall North American market, SCL's US operations have shown promising results. The company's US plant in South Carolina has begun serial production and supplies to customers from its 4,400-ton machine. Notably, the US operations registered their highest quarterly sales performance of Rs. 79.70 crores since inception, marking a 32% increase over the same quarter of the previous year.

New CFO Appointment

In a significant leadership change, SCL has appointed Hariharan V as its new Chief Financial Officer, effective September 1. Hariharan brings over 32 years of rich experience in the manufacturing industry, with expertise in finance, planning, marketing, human resources, internal audit, and risk management.

Hariharan's educational background includes:

• Bachelor's Degree from St. Joseph's College, Trichy
• Chartered Accountancy certification from the Institute of Chartered Accountants of India
• Post Graduate degree in Engineering Business Management from the University of Warwick
• Various leadership development programs

Having joined SCL in 1997, Hariharan has been instrumental in leading various functions within the company, including finance, marketing, business planning, human resources, and internal audit. His appointment as CFO comes after a successful tenure overseeing the company's US project.

Strategic Outlook

Despite challenges in the North American market, SCL continues to view it as a long-term strategic market with growth opportunities. The company's investment in its US plant and the recent performance improvements underscore this commitment.

As Sundaram-Clayton Limited moves forward with its plant consolidation in India and expansion in the US, the company appears well-positioned to capitalize on its operational efficiencies and global market presence in the automotive components sector.

With its focus on high-quality, innovative solutions for global customers in both commercial and passenger vehicle segments, and a strong emphasis on sustainability, SCL continues to strengthen its position as a leader in lightweighting, advanced manufacturing, and future-ready automotive solutions.