Sundram Fasteners delivered a strong Q3 FY26 performance, demonstrating resilience in domestic markets while navigating export challenges. The company reported total revenue of Rs. 1,359 crores for the quarter, supported by robust domestic growth across its business segments.

Strong Domestic Performance Drives Growth

The company achieved impressive 18% growth in domestic operations, encompassing both original equipment (OE) and aftermarket business segments. This strong domestic performance helped offset challenges in export markets, which experienced moderation due to tariff pressures.

The domestic growth was driven primarily by strong performance in commercial vehicles, passenger cars, multi-utility vehicles, and tractors. Management indicated that all three key segments - M&HCV, cars and MUVs, and tractors - contributed to the robust domestic performance.

Export Challenges and Tariff Impact

Export operations faced headwinds due to tariff pressures, with some products experiencing 25% tariffs while others faced 50% rates depending on iron and steel content. This impacted the company's contribution margins, though the business maintained operational efficiency.

To mitigate these challenges, the company is actively diversifying its export portfolio, engaging with customers in Europe including Poland, Romania, and Sweden. Several requests for quotations (RFQs) are in final stages of conclusion, with expansion efforts also targeting the UK market.

Financial Performance and Margins

For the nine-month period, Sundram Fasteners reported strong financial metrics with EBITDA margins at 17.3%. The company achieved profit after tax of Rs. 401 crores compared to Rs. 382 crores in the corresponding previous period.

The company took an exceptional charge of Rs. 11 crores related to labour code provisions, similar to other companies in the sector. Excluding this one-time impact, the underlying business performance remained strong.

Non-Automotive Diversification Strategy

Sundram Fasteners continued expanding its non-automotive portfolio, which now comprises 38% of total revenues compared to 30% previously. The company is making significant progress across multiple segments:

Wind Energy Expansion:

• Current annualized revenue: Rs. 350 crores (up from Rs. 200 crores)
• Target expansion: Rs. 500 crores annualized
• Growth rate: 30% from current levels

Aerospace Growth:

• Monthly revenue increased from Rs. 2.5-3 crores to Rs. 5 crores
• Growth rate: 50%-60%
• Total aerospace revenue: Less than Rs. 100 crores annually

Railway Fasteners:

• Expanding through dealer-distributor network
• Opportunities from Vande Bharat and track modernization projects

Capacity Utilization and Investment Plans

The company operates at approximately 60% capacity utilization across its facilities, with variations across different business lines and equipment. Management outlined clear capital expenditure plans:

The revenue-generating investments are made based on clear customer indications and agreements, ensuring productive deployment of capital.

Market Outlook and Growth Targets

Management expressed confidence about achieving 18% EBITDA margins, representing an improvement from the current 17.3% level. The company targets double-digit revenue growth for FY27, with preliminary indications suggesting growth will not fall below 10%.

For domestic markets, early customer projections indicate:

• Commercial vehicles: 8%-10% growth
• Passenger cars: 8%-10% growth
• Tractors: Above 10% growth

The company expects to outperform industry growth rates, targeting 12% growth when industry grows at 10%, driven by increased wallet share with existing customers and new business wins from ongoing RFQ processes.

Strategic Positioning

Sundram Fasteners is well-positioned to capitalize on multiple growth drivers including domestic automotive recovery, non-automotive diversification, and export market expansion beyond North America. The company's focus on high-margin businesses like aerospace and wind energy, combined with operational efficiency improvements, supports the path toward achieving 18% EBITDA margins in the near term.

Sundram Fasteners announced its unaudited financial results for the quarter and nine months ended December 31, 2025, demonstrating consistent operational performance and strategic leadership appointments. The Board of Directors meeting held on January 28, 2026, approved the quarterly results along with key organizational decisions that will shape the company's future direction.

Financial Performance Overview

The company's standalone financial performance for Q3FY26 showed steady growth across revenue metrics. Revenue from operations reached ₹1,351.47 crores for the quarter ended December 31, 2025, marking a 7.55% increase from ₹1,256.58 crores in the same period of the previous year.

For the nine months ended December 31, 2025, the company maintained its growth trajectory with revenue from operations of ₹4,040.01 crores compared to ₹3,855.75 crores in the corresponding period of the previous year. Net profit for the nine-month period stood at ₹400.50 crores against ₹382.64 crores in the previous year.

Consolidated Results

On a consolidated basis, the company reported revenue from operations of ₹1,541.11 crores for Q3FY26, up from ₹1,441.12 crores in Q3FY25. Consolidated net profit for the quarter was ₹130.80 crores compared to ₹130.73 crores in the previous year. The consolidated earnings per share remained stable at ₹6.21 for both quarters.

Exceptional Items Impact

The company recognized an exceptional item of ₹11.02 crores in the standalone results due to the statutory impact of new Labour Codes. The Government of India consolidated multiple existing labour legislations into four Labour Codes effective November 21, 2025, resulting in a one-time increase in employee benefit provisions. On a consolidated basis, this impact amounted to ₹13.11 crores.

Key Board Appointments and Reappointments

The Board approved several significant organizational changes that will strengthen the company's leadership structure:

Director Reappointments

Sri Suresh Krishna, aged 89 years, brings extensive experience with qualifications including a Bachelor of Science degree from Madras Christian College and a Master of Arts in Literature from the University of Wisconsin. He has been associated with the company since its inception and was appointed Chairman of the Board on June 15, 1979.

Ms Arathi Krishna holds a Master of Arts in Economics from Stella Maris College and an MBA from the University of Michigan Business School. She began her career as a Management Trainee at Sundram Fasteners in 1990 and progressed to General Manager by 1998.

Senior Management Addition

The Board appointed Sri K Balasubramaniam as Senior Management Personnel in Information Technology, effective January 28, 2026. He brings over 21 years of IT experience with a Bachelor of Engineering in Mechanical Engineering from P.S.G. College of Technology, Coimbatore, and an MBA from the Indian Institute of Technology, Madras.

Operational Highlights

The company's domestic sales performance remained strong, with domestic sales for Q3FY26 reaching ₹994.97 crores compared to ₹840.81 crores in the previous year, representing an 18% growth. Export sales faced headwinds, declining to ₹308.41 crores from ₹362.79 crores in the corresponding quarter.

For the nine-month period, domestic sales grew 13% to ₹2,882.82 crores from ₹2,557.53 crores in the previous year. The company incurred capital expenditure of ₹217.92 crores for the nine months ended December 31, 2025, aligned with its planned investment program for FY26.

Regulatory Compliance

The financial results were prepared in accordance with Indian Accounting Standards and SEBI Listing Regulations. The statutory auditors B S R & Co. LLP conducted a limited review and issued unmodified review reports for both standalone and consolidated results. All appointments are subject to shareholder approval through postal ballot.