Revenue
Margin
Demand
Guidance
Tone
Event Participants
Executives
4 Ghan Shyam Takkar (Group CFO), Ashwani Maheshwari (Deputy Managing Director), Ashim Rellan (Group CEO), KK Sharma (Chief Manufacturing Officer)
Analysts
4 Preet Pitani (InCred Asset Management), Sonal Gupta (HSBC Asset Management), Viraj Kacharia (Securities Investment Management), Manpreet Arora (Aurora Wealth Advisors) + Unidentified Participant
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹1,011.1 crores | +34% YoY, driven by catalyst pass-through element of sales and product mix of items with catalyst |
| Gross Profit | ₹203.9 crores | +8% YoY, in line with addressable market growth of 8-10%; impacted by supplier fire at key customer and premium RM procurement due to geopolitical situation |
| EBITDA | ₹103.2 crores | +5% YoY, with margins at 10.2% for the quarter |
| PBT (before exceptional items) | ₹115 crores | vs ₹107.7 crores in Q1 FY26 (after excluding exceptional gains of ₹22.4 crores) |
| PAT | ₹86.5 crores | Reported for consolidated basis |
| Industry production (PV) | 14.53 lakh units | +16.8% YoY, led by utility vehicles which grew 21.2% YoY |
| Industry production (LCV) | 1.91 lakh units | +20.8% YoY, supported by last-mile transportation demand |
Geographic & Segment Commentary
- Lightweighting (Control Arms/Links): Previously announced control arm and link programs continue to ramp up, with order pipeline providing visibility across FY27 and FY28. Chakan 3 lightweighting facility has commenced SOP and is ramping up per customer schedules. Market share was 14% at end of FY26, expected to increase given visibility of orders in hand.
- Exports & Global Business: 3 orders from North American engine and genset manufacturers (combined annual value ~$10.7M, lifetime value ~$58.5M) remain aligned to revised customer schedules, with SOPs expected across Q3 FY27 and Q4 FY27. Execution activities including sampling and validation progressing in line with customer requirements.
- Emission Business: Secured multiple WLTP replacement business orders from leading passenger vehicle OEMs. Temperature-controlled tube order SOP for leading off-highway equipment manufacturer commenced and is ramping up. R&D work on Euro 7-related solutions with existing customer provides early technology exposure.
- Technology & R&D: Filed 2 additional patents during Q1 FY27, taking total to 24 patent filings with 4 awarded. R&D teams supporting WLTP, Euro 7 benchmarking, hybrid solutions, flex fuel readiness, temperature control tubes, and localization of lightweighting technology.
Company-Specific & Strategic Commentary
- Multi-Powertrain Strategy: Company strategy is powertrain-agnostic, building capabilities to participate across ICE, CNG, hybrid, flex fuel, and EV landscape. Diversification along three dimensions: products, powertrains, and geography.
- Donggi Technology Partnership: Jointly showcased cutting-edge products to key OEM customers, strengthening technical discussions and generating RFQs across multiple product platforms. Internal assessment of broader lightweighting portfolio opportunity is ₹8,000-9,000 crores over ~5 years, with aspiration to build mid-teen to high-teen percentage share.
- Uttarakhand Facility: Investment of approximately ₹20 crores planned closer to customer's manufacturing location to improve logistics, responsiveness, and JIT alignment. Will support relocation and co-location of existing business initially.
- Acquisitions Readiness: Company has strengthened M&A capabilities and established disciplined framework for assessing opportunities. Now ready to be more assertive in pursuing strategic acquisitions while maintaining filters of strategic fit, customer/technology relevance, valuation, integration feasibility, and ROC.
- CAFE III Regulation: Revised draft (16 July 2026) retains multi-technology approach, moderates super credit benefit for strong hybrids/flex fuel vehicles while retaining incentives for electric vehicles. Multi-technology approach favors both emission and lightweighting portfolio.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Export Revenue | Ramp-up across FY27-FY28 | SOPs aligned to customer schedules; ramp-ups typically take 1-2 years to reach peak volumes. Company declined to give specific quarterly numbers |
| FY27 Growth Contributors | Full-year benefits of lightweighting orders, additional program ramp-ups, temperature-controlled tube adjacencies, and North American export order SOPs | Growth trajectory linked to customer production schedules, SOPs, and program ramp-ups |
| Market Share - Lightweighting | Expected to increase from 14% (FY26) | Company calculates annually; visibility from orders in hand supports increase |
| Lightweighting Portfolio Opportunity | ₹8,000-9,000 crores, mid-teen to high-teen share aspiration | 5-year internal assessment; includes control arms, subframes, torsion beams |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical Disruptions | Evolving geopolitical conditions causing supply chain disruptions. Premium RM procurement costs absorbed during April-May 2026 (stabilized by July). One-time costs normalized over coming quarters |
| Customer Production Disruptions | Supplier fire at one of key customers caused production impact during Q1, affecting gross profit growth. Revenue growth tied to customer production schedules |
| Regulatory Uncertainty | BS7 not yet officially notified; content increase dependent on adoption of Euro 7 requirements. CAFE III revised but details may evolve further |
| Technology Transition Risk | Future defined by multiple powertrains, not one winning technology. Company's strategy designed to be powertrain-agnostic to mitigate this risk |
Q&A Highlights
Export Order Schedule & Ramp-up (Preet Pitani - InCred)
- Question: Based on announced export orders (~$35.5M total), how much revenue can be expected in FY27 vs FY28?
- Answer: SOPs proceeding as per announced schedule (Q3/Q4 FY27). Revenue split depends on customer schedules, company doesn't give specific numbers. Ramp-ups typically take 1-2 years to reach peak volumes based on OEM pickup schedules. (Ashwani Maheshwari)
Gross Profit & Raw Material Impact (Preet Pitani, Sonal Gupta)
- Question: Were there any gross profit impacts from higher aluminum/steel prices? What was the one-time impact?
- Answer: Substrate prices (catalyst) are customer-directed with no lag. Most direct materials indexed with regular pass-through; no "vacuum" in any quarter. One-time premium RM procurement costs were incurred but not significant, already captured in 8% gross profit growth. Steel prices pass through back-to-back, no lag. (Ghan Shyam Takkar)
Growth vs. Industry Performance (Sonal Gupta - HSBC)
- Question: When will company start growing in line with industry (16-17% growth)?
- Answer: Adjusted for Japanese OEM non-presence and customer supplier fire, addressable market grew 8-10%, and company grew 8% - broadly in line. Future growth from: existing order SOPs/ramp-ups, RFQ conversion, and industry organic growth. (Ghan Shyam Takkar, Ashwani Maheshwari)
Dongi Technology Partnership (Sonal Gupta - HSBC)
- Question: Any customer sign-ups for Donggi technology products?
- Answer: Jointly showcased Korean products to key OEM customers during Q1, strengthened technical discussions and generated RFQs across multiple product platforms. Portfolio opportunity estimated at ₹8,000-9,000 crores with mid-to-high teen share aspiration over 5 years. (Ashwani Maheshwari)
Regulatory Content Changes (Viraj Kacharia - SIMPL)
- Question: What content changes from BS6.3/CAFE through BS7?
- Answer: WLTP focuses on catalyst efficiency, calibration, thermal management - not necessarily full redesign. BS7 (if aligned to Euro 7) would increase content in hot end aftertreatment through high catalyst requirements and gasoline particulate filters. Advanced stage engine development with customer for export gives technology understanding. (Ghan Shyam Takkar)
Premium Two-Wheeler & PurMV JV (Manpreet Arora - Aurora Wealth)
- Question: Premium 2W opportunity and PurMV JV inflection point?
- Answer: Premium 2W is domestic market focus where engineered emission systems capability is directly applicable. PurMV program started Q4 last year, ramping through FY27. JV gets 50% of PAT after deductions; exploring options to participate more deeply in CV segment above 4 liters. Discussions are continuous process, not tied specifically to BS7. (Ghan Shyam Takkar, Ashwani Maheshwari)
Key Takeaway
Sharda Motor Industries reported Q1 FY27 revenue of ₹1,011.1 crores (+34% YoY) with gross profit of ₹203.9 crores (+8% YoY) and EBITDA margins at 10.2%, reflecting steady execution despite a customer supplier fire and geopolitical supply chain disruptions that created one-time costs. The company's strategic transformation continues across lightweighting (control arms to subframes/torsion beams via Donggi partnership), exports (North American orders with $58.5M lifetime value SOPs in Q3-Q4 FY27), and emission adjacencies (multiple WLTP order wins, temperature-controlled tubes ramping). Management maintains disciplined capital allocation with ₹20 crore Uttarakhand facility progressing and Chakan 3 ramping. The company positions itself as powertrain-agnostic, benefiting from CAFE III's multi-technology approach that requires engineered emission systems across ICE, hybrid, CNG, and flex fuel. Key watch points: customer production schedules, SOP timing for export orders, conversion of RFQ pipeline (notably the ₹8,000-9,000 crore lightweighting opportunity), and potential BS7 regulatory changes that could drive higher content per vehicle.