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MUNJALSHOW - Munjal Showa

📊 NSE: MUNJALSHOW 🏢 Auto Ancillaries 📅 Last Updated: 12/14/2025 10:07

📢 Recent Corporate Announcements

Munjal Showa Q3 FY26 PAT Jumps 82% YoY to ₹10.91 Cr; Revenue Up 9.6%

🟢 POSITIVE ⭐ 7/10

EARNINGS 📅 07 Feb 2026, 02:29 PM

Munjal Showa Limited reported a strong financial performance for the quarter ended December 31, 2025, with Revenue from Operations growing 9.6% YoY to ₹349.68 crore. Net Profit (PAT) surged by 82.4% YoY to ₹10.91 crore, up from ₹5.98 crore in the previous year's corresponding quarter. The results were achieved despite an exceptional charge of ₹2.20 crore related to the impact of new Labour Codes on gratuity liabilities. For the nine-month period, PAT stands at ₹21.92 crore compared to ₹19.95 crore in the prior year.

Revenue from operations increased to ₹349.68 crore in Q3 FY26 from ₹319.08 crore in Q3 FY25.
Net Profit (PAT) rose significantly to ₹10.91 crore, resulting in an EPS of ₹2.73 compared to ₹1.49 YoY.
Profit before tax and exceptional items more than doubled to ₹17.01 crore from ₹8.05 crore in the year-ago quarter.
Recognized a one-time exceptional charge of ₹2.20 crore due to increased gratuity liability from new Labour Codes.
Total expenses for the nine-month period included ₹3.23 crore in separation costs for a Voluntary Retirement Scheme (VRS).

💡 Investors should view the sharp expansion in net margins and profit growth positively, especially as it comes despite one-off labor-related costs. The company's ability to grow revenue and significantly improve bottom-line efficiency suggests strong operational tailwinds in the auto-component segment.

Munjal Showa Q3 PAT Jumps 82% YoY to ₹10.9 Cr; Revenue Up 9.6%

🟢 POSITIVE ⭐ 8/10

EARNINGS 📅 07 Feb 2026, 02:28 PM

Munjal Showa reported a strong performance for the quarter ended December 31, 2025, with revenue from operations growing 9.6% YoY to ₹349.68 crore. Net profit surged by 82.4% YoY to ₹10.91 crore, despite an exceptional charge of ₹2.20 crore related to the impact of new Labour Codes. The company's EPS improved significantly to ₹2.73 from ₹1.49 in the same quarter last year. For the nine-month period, the company maintained steady growth with a PAT of ₹21.92 crore compared to ₹19.95 crore in the previous year.

Revenue from operations increased to ₹34,968.17 lakhs in Q3 FY26 from ₹31,908.48 lakhs in Q3 FY25.
Net Profit (PAT) grew by 82.4% YoY to ₹1,090.72 lakhs despite a ₹220.02 lakh exceptional charge.
Earnings Per Share (EPS) rose to ₹2.73 for the quarter, up from ₹1.49 in the year-ago period.
Exceptional item of ₹220.02 lakhs recognized due to increased gratuity liability from new Labour Codes.
Total expenses for 9M FY26 included ₹322.51 lakhs in separation costs for employees opting for Voluntary Retirement Scheme (VRS).

💡 The strong bottom-line growth and margin improvement are positive signals for the stock. Investors should monitor the impact of the new Labour Codes on future operating costs and the company's ability to maintain revenue momentum in the auto component sector.

Munjal Showa Submits Q3 FY26 SEBI Compliance Certificate for Share Dematerialization

🟡 NEUTRAL ⭐ 2/10

ROUTINE 📅 05 Jan 2026, 10:26 AM

Munjal Showa Limited has filed its quarterly compliance certificate under Regulation 74(5) of SEBI (Depositories and Participants) Regulations for the quarter ended December 31, 2025. The document confirms that the company's Registrar and Share Transfer Agent, MCS Share Transfer Agent Limited, processed all dematerialization requests within the required 15-day window. It ensures that physical certificates were properly cancelled and the depository's name was updated in the records. This filing is a standard procedural requirement and indicates smooth administrative operations regarding share transfers.

Compliance certificate issued for the quarter ended December 31, 2025.
Dematerialization requests processed within the mandatory 15-day period.
Physical share certificates were mutilated and cancelled after due verification.
Registrar and Share Transfer Agent (RTA) is MCS Share Transfer Agent Limited.

💡 This is a routine administrative update with no impact on company fundamentals. Investors do not need to take any action.

Munjal Showa Receives Income Tax Demand Notice of INR 703.83 Lakhs

🔴 NEGATIVE ⭐ 6/10

LEGAL 📅 27 Dec 2025, 11:30 AM

Munjal Showa Limited has received a tax demand notice of INR 703.83 Lakhs, including interest, for the Assessment Year 2022-23. The Income Tax Department assessed the company's income at INR 2768.90 Lakhs, which is significantly higher than the returned income of INR 489.48 Lakhs. The primary reason for this discrepancy is an adjustment of INR 2254.99 Lakhs related to royalty and other payments. The company has stated it will challenge this order before the Income Tax Appellate Tribunal (ITAT) based on strong merits.

Total tax demand of INR 703.83 Lakhs issued for Assessment Year 2022-23
Assessed income revised to INR 2768.90 Lakhs against reported INR 489.48 Lakhs
Adjustment of INR 2254.99 Lakhs made specifically regarding royalty payments
Company to file an appeal before the Income Tax Appellate Tribunal (ITAT)

💡 Investors should monitor the outcome of the ITAT appeal as a final unfavorable ruling would impact the company's cash flows. However, since the company is contesting the demand, there is no immediate cash outflow beyond potential mandatory deposits for the appeal.

Munjal Showa to Close Trading Window from Jan 1, 2026 for Q3 FY26 Results

🟡 NEUTRAL ⭐ 2/10

ROUTINE 📅 24 Dec 2025, 02:43 PM

Munjal Showa Limited has announced the closure of its trading window starting January 1, 2026, in compliance with SEBI (Prohibition of Insider Trading) Regulations. This closure is ahead of the declaration of the company's un-audited financial results for the quarter ending December 31, 2025. The restriction applies to all designated persons, connected persons, and their immediate relatives. The trading window will remain closed until 48 hours after the financial results are officially declared to the exchanges.

Trading window closure begins on January 1, 2026.
Closure is related to the un-audited financial results for the quarter ending December 31, 2025.
The window will reopen 48 hours after the results are announced.
The restriction applies to all Designated Persons and their immediate relatives as per the company's Code of Conduct.

💡 No action is required as this is a routine regulatory compliance filing. Investors should await the announcement of the Q3 financial results for performance assessment.

Munjal Showa Receives GST Demand Order of INR 33.28 Lakhs for FY 2021-22

🟡 NEUTRAL ⭐ 3/10

REGULATORY 📅 23 Dec 2025, 05:38 PM

Munjal Showa Limited has received a demand order from the Deputy Commissioner, Haridwar, Uttarakhand, under the SGST & CGST Act 2017. The order, dated December 22, 2025, determines a tax demand of INR 33.28 Lakhs for the financial year 2021-22. The company has stated that it intends to challenge the order through a formal reply or appeal based on strong merits. Management has clarified that this demand will not have a material impact on the company's financial or operational activities.

Tax demand order of INR 33.28 Lakhs received from Uttarakhand GST authorities
Demand pertains to the financial year 2021-22 under Section 73 of the CGST/SGST Act
Company plans to contest the order via appeal citing strong legal merits
Management confirms no material impact on financial or operational performance

💡 Investors should note the development, but the financial magnitude is negligible relative to the company's scale. No immediate action is required.

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💰 Financial Performance

Revenue Growth by Segment

Revenue for FY25 reached INR 1,250.45 Cr, a 6.6% increase from INR 1,172.73 Cr in FY24. However, Q1 FY26 revenue of INR 286 Cr showed an 8% YoY decline due to falling sales volumes from primary customers. The company primarily serves the 2-wheeler segment (front forks, shock absorbers) and 4-wheeler segment (struts, window balancers).

Geographic Revenue Split

100% of revenue is generated within India, with manufacturing facilities located in Gurugram and Manesar (Haryana) and Haridwar (Uttarakhand).

Profitability Margins

Operating margins moderated to 1.4% in FY25, down from 2.5% in FY23, primarily due to lower operating leverage and one-time provisions. PAT margin stood at 2.6% in FY24 with a profit of INR 31 Cr.

EBITDA Margin

Operating margin remained flat at 1.4% in FY25. Core profitability is constrained by the inability to pass on raw material cost increases to OEMs, leading to sustained low margins.

Capital Expenditure

Planned annual capital expenditure is between INR 10 Cr and INR 12 Cr, which is expected to be funded entirely through internal accruals of INR 18-20 Cr.

Credit Rating & Borrowing

CRISIL downgraded the long-term rating to 'CRISIL A/Stable' from 'CRISIL A+/Stable' in September 2024. The company remains debt-free with a gearing of less than 0.1x since 2013.

⚙️ Operational Drivers

Raw Materials

Steel and aluminum components are the primary raw materials. Cost of materials consumed in H1 FY25 was INR 486.14 Cr, representing 78.6% of total revenue.

Capacity Expansion

Current capacity utilization is described as 'subdued' or 'lower' due to declining orders across segments. No specific MT/unit expansion figures were provided beyond maintenance capex.

Raw Material Costs

Raw material costs represent approximately 78-79% of revenue. The company faces high sensitivity to input prices as it has low bargaining power with OEMs to pass on cost hikes.

Manufacturing Efficiency

Efficiency is currently hampered by low operating leverage; however, the proximity of the three manufacturing plants to key client facilities helps manage logistics and requirements efficiently.

Logistics & Distribution

Distribution is optimized by locating plants in Gurugram, Manesar, and Haridwar, which are close to the primary manufacturing hubs of its key OEM customers.

📈 Strategic Growth

Expected Growth Rate

Growth Strategy

Growth is targeted through cost corrective measures (VRS, SOP changes), investments in solar power to reduce overheads, and attempts to diversify the customer and product profile beyond the traditional 2-wheeler segment.

Products & Services

Front forks and shock absorbers for 2-wheelers; struts and window balancers for 4-wheelers.

Brand Portfolio

Munjal Showa

New Products/Services

The company has developed components for the EV segment, though recent performance was hit by subsidy changes.

Strategic Alliances

Technical and financial collaboration with Hitachi Astemo Ltd (formerly Showa Corporation, Japan), which holds a 24.90% equity stake.

🌍 External Factors

Industry Trends

The industry is shifting toward Electric Vehicles (EVs), but MSL's transition has been slowed by regulatory changes in subsidies. Competitive intensity in the suspension segment remains high.

Competitive Landscape

Intense competition from other auto-component manufacturers and rising pressure from OEMs to reduce pricing.

Competitive Moat

The company's moat is based on its long-standing technical collaboration with Hitachi Astemo and the strategic location of its plants near key customers, providing a logistics cost advantage.

Macro Economic Sensitivity

Highly sensitive to cyclical demand in the Indian automotive industry and changes in government subsidies like FAME-II.

Consumer Behavior

Shift toward EVs is a key trend affecting long-term demand for traditional suspension components.

⚖️ Regulatory & Governance

Industry Regulations

Operations are significantly impacted by FAME-II subsidy regulations and automotive safety/manufacturing standards.

Environmental Compliance

The company is increasing its ESG focus through solar power investments to reduce its carbon footprint.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the high customer concentration; a slowdown in the key client's market share would lead to sustained low capacity utilization and margin pressure.