Sansera Engineering Limited has entered into a strategic joint venture agreement with Japan's Nichidai Corporation to manufacture precision forged and machined automotive components. The partnership, announced on January 29, 2026, will establish a new manufacturing facility in Bengaluru to produce advanced automotive components for both domestic and international markets.

Joint Venture Structure and Investment

The collaboration will operate through a new private limited company to be incorporated in Bengaluru, with a clear ownership structure and significant financial commitment.

Manufacturing Focus and Product Portfolio

The joint venture will concentrate on manufacturing precision forged and machined parts in aluminium and steel for several automotive applications. The product range includes components for differential assemblies, compressors, driveline systems, and other advanced automotive components not currently manufactured by Sansera Engineering. This expansion will enable the company to diversify its product portfolio beyond existing IC engine components and access new customer segments.

Governance and Management Structure

The JV company will have a structured governance framework with representation from both partners:

Technology Transfer and Operational Framework

Nichidai Corporation will exclusively supply tooling required for the business along with technical know-how, specifications, designs, process information, and manufacturing-related assistance to the JV company in India. This arrangement leverages Nichidai's 50 years of expertise in manufacturing dies, precision components, and filters developed across operations in Japan and Thailand.

Strategic Rationale and Market Impact

The partnership aligns with the Government of India's "Make in India" and "Atmanirbhar Bharat" initiatives while enabling both companies to leverage their existing customer and sales networks. The collaboration is expected to create skilled employment opportunities and contribute to Karnataka's economic development. The JV will actively explore new markets to expand the customer base and promote business growth in precision automotive components manufacturing.

Timeline and Implementation

The joint venture agreement includes standard commercial conditions covering reserved matters, deadlock situations, material events of default, representations, warranties, indemnities, termination, and dispute resolution mechanisms. The indicative completion timeline is 12 months from the date of disclosure, with the possibility of extension based on mutual agreement between both parties.

Source: Exclusive

Sansera engineering has received credit rating reaffirmation from ICRA Limited, with the rating agency maintaining its positive assessment of the company's financial and business risk profiles. The reaffirmation covers facilities worth Rs. 996.00 crore across various instruments.

Rating Details and Facility Breakdown

ICRA has reaffirmed multiple credit facilities for Sansera Engineering, reflecting confidence in the company's creditworthiness:

Strong Financial Performance and Business Profile

The rating reaffirmation considers Sansera Engineering's established position as an auto-ancillary with presence across multiple product segments including connecting rods, rocker arms, and crankshaft assembly. The company has demonstrated resilience with revenue growth of 7.4% in FY2025 and 5.6% year-on-year in H1 FY2026, primarily driven by growth in ADS (Aerospace, Defence & Semiconductor) segments.

Operating margins remained healthy at 17.2% in FY2025 compared to 17.1% in the previous year, and 17.3% in H1 FY2025. The company's financial profile has strengthened considerably following the Qualified Institutional Placement (QIP) proceeds of Rs. 1,200 crore in Q3 FY2025, which was largely utilized for prepayment and repayment of borrowings.

Key Financial Metrics and Order Book Position

Sansera Engineering's financial indicators demonstrate strong performance across key parameters:

The company maintains a robust order book position of over Rs. 2,000 crore as of September 30, 2025, diversified across auto internal combustible engine (ICE), electric vehicles (xEV), and non-auto segments from both domestic and overseas markets.

Business Diversification and Market Position

Sansera Engineering has established a diversified business model with a product portfolio of more than 80 components. The company derives 31% of its revenues from exports in H1 FY2026, providing geographical diversification and mitigating region-specific risks. In H1 FY2026, the company derived 12.7% of revenues from non-automotive segments and 14.4% from auto-tech agnostic segments, showing steady increase in proportion over the years.

The company operates 17 manufacturing plants, including 16 facilities across India and one in Sweden. It maintains established relationships with major two-wheeler and passenger vehicle/commercial vehicle original equipment manufacturers in India and overseas markets, with healthy wallet share and repeat order track record.

Investment Plans and Future Outlook

Sansera Engineering has outlined significant capital expenditure plans with over Rs. 200.0 crore planned for H2 FY2026 and annual capex plans of Rs. 350-400 crore in the coming years towards upgradation and expansion of existing facilities. The capex is expected to be funded largely through internal accruals, with ICRA drawing comfort from anticipated healthy accruals and absence of sizeable incremental debt funding.

ICRA expects the company's financial profile to remain strong going forward, supported by healthy revenues and accruals despite sizeable capex plans over the medium term. The 'Stable' outlook reflects expectations that the company will sustain its credit profile and debt metrics through strong business position, healthy cash accruals, and adequate liquidity.