Sharda Motor Industries Ltd has announced receiving favorable appellate orders from the Commissioner of Income-Tax (Appeals), marking a significant development in the company's ongoing income tax proceedings. The orders, dated February 23, 2026, cover multiple assessment years and are expected to substantially reduce the company's outstanding tax liability.

Appellate Orders Details

The company received orders under Section 250 of the Income Tax Act, 1961, from The Commissioner of Income-Tax (Appeals)-27, New Delhi, covering six assessment years. The orders were received on February 25, 2026, through the IT Portal and represent the continuation of previous proceedings, with the latest intimation being from October 08, 2025.

Financial Impact and Demand Reduction

The appellate orders are expected to provide substantial financial relief to the company. According to management's assessment, the outstanding tax demand will see a dramatic reduction following the Commissioner's orders.

The company stated that it will approach the Assessing Officer to pass the appeal effect order in line with the orders under Section 250 passed by the Commissioner of Income-Tax (Appeals). This process is expected to formalize the reduction in the outstanding demand amount.

Next Steps and Future Actions

Sharda Motor Industries has outlined its strategy for addressing the remaining tax liability. The company plans to file an appeal before the Income Tax Appellate Tribunal against the balance demand of Rs 6.11 Cr, indicating its intention to further contest the remaining liability.

The disclosure was made pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and follows SEBI Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026. The company's Assistant Company Secretary and Compliance Officer, Iti Goyal, signed the regulatory filing.

Regulatory Compliance

The company has fulfilled its disclosure obligations under the listing regulations by providing detailed information about the appellate orders. The filing includes comprehensive details about the nature of the orders, financial impact, and the company's planned course of action for the remaining proceedings.

Sharda Motor Industries Limited has delivered strong financial results for the third quarter ended December 31, 2025, demonstrating robust growth across key performance metrics. The auto component manufacturer reported significant revenue expansion and maintained healthy profitability despite facing some exceptional charges during the quarter.

Strong Revenue Performance

The company achieved impressive top-line growth with revenue from operations reaching ₹88,155.02 lakh in Q3FY26, marking a substantial 27.8% increase compared to ₹68,999.47 lakh in Q3FY25. This growth momentum was supported by strong demand across the company's product portfolio and effective market positioning.

Profitability Analysis

Despite facing exceptional charges of ₹446.13 lakh related to employee benefit provisions, the company maintained solid profitability. Net profit for Q3FY26 stood at ₹8,013.01 lakh, representing a 7.2% increase from ₹7,472.02 lakh in the corresponding quarter of the previous year. The company's profit from operations before exceptional items and tax reached ₹11,041.90 lakh, up 10.4% year-on-year.

Nine-Month Performance

For the nine-month period ended December 31, 2025, the company demonstrated consistent growth with revenue from operations increasing 16.2% to ₹2,42,500.75 lakh from ₹2,08,671.69 lakh in the previous year. Nine-month net profit grew 10.7% to ₹25,462.54 lakh, reflecting the company's ability to maintain margin discipline while scaling operations.

Manufacturing Expansion Initiative

The company announced plans to establish a new manufacturing unit in Haridwar, Uttarakhand, representing a significant capacity expansion initiative. The facility will add 1,50,000 sets per annum to the company's production capacity, with modular design allowing for future augmentation with limited capital expenditure.

Major New Order Wins

The company has secured significant new orders across its business verticals, strengthening its growth trajectory. These orders span emission control systems, lightweighting solutions, and global business segments, with combined lifetime value exceeding $200 million.

Strategic Business Expansion

Sharda Motor has strengthened its lightweighting vertical through a technology licensing agreement with Donghee Industrial Co. Ltd., South Korea. This partnership expands the company's suspension portfolio to include control arms, links, subframes, and torsion beams, increasing content per vehicle from the current ₹2,000-8,000 to ₹6,000-18,000.

Conference Call Recording Available

Following the investor and analyst conference call held on February 09, 2026, at 05:00 P.M. (IST) to discuss the Q3FY26 financial performance, the company has made the audio recording available on its website. The recording provides detailed insights into the operational and financial performance for the quarter ended December 31, 2025.

Exceptional Items Impact

The quarter included exceptional charges of ₹446.13 lakh primarily related to employee benefit provisions arising from new Labour Code implementations. These provisions covered gratuity revisions of ₹367.76 lakh and long-term compensated absences of ₹78.37 lakh, reflecting the company's proactive approach to regulatory compliance.