SHARDAMOTR - Sharda Motor
📢 Recent Corporate Announcements
Sharda Motor Industries has received favorable orders from the Commissioner of Income-Tax (Appeals) for six assessment years. The management anticipates that the total outstanding tax demand of ₹84.89 Cr will be slashed to ₹6.11 Cr once the Assessing Officer passes the appeal effect order. The company plans to challenge the remaining ₹6.11 Cr demand at the Income Tax Appellate Tribunal level. This outcome represents a substantial reduction in potential financial liability for the firm.
- Appellate orders received for 6 assessment years covering the period from 2018 to 2025.
- Management expects the ₹84.89 Cr tax demand to be reduced by approximately 93% to ₹6.11 Cr.
- Company will further contest the balance ₹6.11 Cr demand before the Income Tax Appellate Tribunal.
- One assessment year (AY 2022-23) is still pending resolution before the CIT(A).
Sharda Motor Industries reported a strong Q3 FY26 with consolidated revenue growing 28% YoY to ₹881.6 crores, supported by robust demand in the passenger vehicle and tractor segments. The company secured significant new orders in its lightweighting vertical, including a $15 million lifetime value contract for control arms and $25 million in volume increases. Additionally, it bagged North American export orders worth $18.5 million in lifetime value, with SOPs scheduled for FY27. Management is also expanding its footprint with a new ₹20 crore facility in Uttarakhand to meet incremental demand.
- Q3 FY26 Revenue grew 28% YoY to ₹881.6 crores, while EBITDA increased 13% to ₹106.4 crores.
- Secured new lightweighting orders with a combined lifetime value of $40 million from leading PV OEMs.
- Bagged North American export orders for engines/gensets with an aggregate lifetime value of $18.5 million.
- Investing ₹20 crores in a new modular manufacturing facility in Uttarakhand to be operational by FY27.
- 9-month PAT stood at ₹256 crores, marking a growth over ₹231 crores in the corresponding period last year.
SES ESG Research Private Limited has assigned Sharda Motor Industries Limited an ESG score of 67.9 for the financial year 2024-25. This score places the company in the 'Medium' ESG rating category. The assessment was conducted independently by SES using publicly available data and was not commissioned by the company. This third-party rating provides a baseline for the company's environmental, social, and governance performance for institutional investors.
- Assigned an ESG score of 67.9 by SES ESG Research Pvt. Ltd.
- Categorized under the 'Medium' ESG rating bracket.
- Rating is based on publicly available data pertaining to the financial year 2024-25.
- Independent assessment conducted without formal engagement from the company.
Sharda Motor Industries reported a steady Q3FY26 with revenue of ₹8,816 million and EBITDA of ₹1,064 million. The company maintains a dominant 30% market share in the PV and LCV exhaust systems segment and is aggressively expanding its lightweighting vertical. A key strategic move includes a Technical License Agreement with Donghee Industrial to increase suspension content per vehicle from the current ₹2,000-₹8,000 range to a potential ₹6,000-₹18,000. The company is also positioning itself for global exports to the USA and Europe, capitalizing on the 'China+1' strategy.
- Reported Q3FY26 Revenue of ₹8,816 million and EBITDA of ₹1,064 million (~12% margin).
- Maintains ~30% value market share in India for PV & LCV exhaust systems and ~12.5% for control arms.
- Technical License Agreement with Donghee Industrial (Korea) to triple potential content per vehicle in the suspension portfolio.
- Gross Tangible Assets increased to ₹504 crore in FY25, up from ₹355 crore in FY21.
- Strong R&D focus with 20 patents filed in the last 4 years and 4 patents already granted.
Sharda Motor Industries reported a robust 27.7% YoY revenue growth to ₹881.55 crore for Q3 FY26. Net profit increased by 7.2% YoY to ₹80.13 crore, impacted slightly by a ₹4.46 crore exceptional provision for new labour codes. A key strategic move includes the board's approval to set up a new manufacturing facility in Haridwar, Uttarakhand, to expand existing product capacity. The company also reported favorable tax appeal outcomes for several prior assessment years, reducing regulatory uncertainty.
- Revenue from operations rose 27.7% YoY to ₹881.55 crore in Q3 FY26.
- Net Profit (PAT) grew 7.2% YoY to ₹80.13 crore despite exceptional costs.
- Approved setting up a new manufacturing unit in Haridwar to increase production capacity.
- Exceptional charge of ₹4.46 crore booked for gratuity and leave encashment provisions under new Labour Codes.
- 9M FY26 Revenue reached ₹2,425 crore, up from ₹2,086.7 crore in the previous year.
Sharda Motor Industries reported a strong 27.7% YoY growth in revenue from operations, reaching ₹881.55 crore for Q3 FY26. Net profit for the quarter increased by 7.2% to ₹80.13 crore, even after accounting for an exceptional charge of ₹4.46 crore related to new labour code provisions. The company is aggressively expanding, with the Board approving a new manufacturing facility in Haridwar, Uttarakhand, to increase existing product capacity. Additionally, the company received favorable tax rulings for assessment years 2014-15 to 2017-18, reducing previous legal contingencies.
- Revenue from operations grew 27.7% YoY to ₹881.55 crore in Q3 FY26 compared to ₹689.99 crore in Q3 FY25.
- Net Profit (PAT) for the quarter stood at ₹80.13 crore, up from ₹74.72 crore in the corresponding previous quarter.
- Board approved the establishment of a new manufacturing unit in Haridwar, Uttarakhand, to boost production capacity.
- Nine-month (9M FY26) revenue reached ₹2,425 crore, a significant jump from ₹2,086.7 crore in 9M FY25.
- Exceptional loss of ₹4.46 crore recorded in Q3 due to revised provisions for gratuity and compensated absences under new Labour Codes.
Sharda Motor Industries Limited has scheduled a conference call for Monday, February 9, 2026, at 5:00 PM IST to discuss its financial and operational performance for the quarter ended December 31, 2025. The call will be attended by senior management, including Group CEO Aashim Relan and Group CFO GD Takkar. This routine disclosure allows institutional investors and analysts to engage with the company regarding its recent performance. The event is being coordinated by Equirus Securities and Ernst & Young LLP.
- Conference call scheduled for February 9, 2026, at 5:00 PM IST.
- Focus on operational and financial performance for the quarter ended December 31, 2025 (Q3 FY26).
- Management team includes Group CEO, Deputy Managing Director, and Group CFO.
- Universal access numbers provided: +91 22 6280 1224 and +91 22 7115 8125.
- International toll-free numbers available for Hong Kong, Singapore, UK, and USA.
Sharda Motor Industries Limited has announced a change in its Senior Management Personnel (SMP) structure effective January 31, 2026. Two officials, Mr. Deepak Bhaskar (Head-People Practices) and Mr. Viekas K Khokha (Head-Strategic Initiatives), will no longer be classified as SMPs under SEBI regulations. This change is attributed to internal organizational restructuring and does not involve any resignations. Both individuals will continue their employment with the company under a new reporting hierarchy.
- Reclassification of 2 senior officials from the Senior Management Personnel (SMP) category.
- Change effective from the closure of business hours on January 31, 2026.
- Mr. Deepak Bhaskar and Mr. Viekas K Khokha to remain with the company in non-SMP roles.
- Restructuring is compliant with Regulation 16(1)(d) of SEBI Listing Regulations.
- No cessation of employment or impact on operational leadership reported.
Sharda Motor Industries Limited has submitted its compliance certificate under Regulation 74(5) of SEBI (Depositories and Participants) Regulations, 2018. The report, issued by Registrar Alankit Assignments Limited, covers the quarter ending December 31, 2025. It confirms that physical share certificates received for dematerialization have been processed, mutilated, and cancelled. This filing is a standard procedural requirement for listed companies in India to ensure the integrity of electronic shareholding records.
- Quarterly compliance certificate filed for the period ending December 31, 2025.
- Confirmation provided by Registrar and Transfer Agent, Alankit Assignments Limited.
- Physical share certificates received were mutilated and cancelled after due verification.
- Records updated to reflect the depository as the registered owner for dematerialized shares.
Sharda Motor Industries 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 specifically for the preparation and declaration of the company's financial results for the third quarter of FY 2025-26. The restriction applies to all designated persons, connected persons, and their relatives. The trading window will remain closed until 48 hours after the Q3 results are officially declared to the exchanges. The specific date for the board meeting to approve these results will be communicated separately in the future.
- Trading window closure effective from January 1, 2026.
- Closure pertains to the declaration of Q3 FY 2025-26 financial results.
- Window will reopen 48 hours after the financial results are made public.
- Compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015.
- Board meeting date for results approval to be announced in due course.
Financial Performance
Revenue Growth by Segment
The company operates in a single segment (Automobile components). Revenue from operations grew by 1% in FY25 compared to FY24. In Q2 FY26, the company reported a top-line growth of 11% YoY, driven by production growth in the passenger vehicle and light commercial vehicle segments.
Geographic Revenue Split
The company's market is majorly focused on the Domestic Geography (India). While specific regional percentages are not disclosed, the company has established a new vertical and onboarded a team to focus on increasing business from exports to diversify its geographic footprint.
Profitability Margins
Net Profit Margin for FY25 was 11.02%, a 5% improvement from 10.50% in FY24. Operating Profit Margin for FY25 stood at 14.86%, up 0.76% from 14.10% in FY24. PBT margin for FY25 was 14.7% compared to 14.0% in FY24.
EBITDA Margin
EBITDA margin for FY25 was 14%, up from 12.9% in FY24. However, Q2 FY26 saw margin compression due to a 4% gross profit growth lagging behind 11% revenue growth, primarily because of investments in global business development, M&A teams, and strategy consultants.
Capital Expenditure
The company undertakes regular maintenance capital expenditure (capex) of INR 70-100 Cr annually. For H1 FY26 (period ended September 30, 2025), net cash used in investing activities was INR 182.0 Cr, which includes investments in liquid funds and property, plant, and equipment.
Credit Rating & Borrowing
The company maintains a 'Positive' outlook from credit rating agencies. It has a robust interest coverage ratio of 93.22x as of March 31, 2025. The company has no long-term debt, and its debt-equity ratio stood at 0.05 in FY25, reflecting a 107% increase from 0.02 due to a buyback program reducing equity reserves.
Operational Drivers
Raw Materials
Primary raw materials include steel and catalysts (precious metals like platinum, palladium, and rhodium). Catalyst costs are treated as a pass-through to customers, which protects absolute EBITDA but can cause fluctuations in gross profit and EBITDA margin percentages.
Capacity Expansion
The company is India's largest manufacturer of exhausts. While specific unit capacity is not disclosed, it maintains a regular capex of INR 70-100 Cr to sustain and potentially expand its manufacturing capabilities in exhausts and suspension lines.
Raw Material Costs
Raw material costs are a significant portion of the cost structure. Catalyst costs are pass-through, meaning price spikes increase revenue (the denominator) without adding profit, leading to margin percentage compression even if absolute profit is stable.
Manufacturing Efficiency
The company maintains high efficiency with an inventory turnover ratio of 14.04 times in FY25, ensuring minimal capital is tied up in stock.
Logistics & Distribution
Distribution costs are part of other expenses, which rose in Q2 FY26 due to investments in business development and M&A strategy teams.
Strategic Growth
Expected Growth Rate
11%
Growth Strategy
The company is scaling its 'lightweighting' vertical to gain market share and new customers. It is also pursuing M&A opportunities to accelerate growth and has augmented its global business development team to increase export revenue. New technology collaborations in the passenger vehicle suspension segment are also key to its growth strategy.
Products & Services
Exhaust systems (largest manufacturer in India), suspension systems, and lightweighting components for automotive OEMs.
Brand Portfolio
Sharda Motor Industries Limited (SMIL).
New Products/Services
New suspension products and technology collaborations for the PV side are being launched. The lightweighting vertical is expected to be a major revenue contributor by FY30.
Market Expansion
The company is targeting international markets through a dedicated global business development team to reduce its 90%+ reliance on the domestic Indian market.
Market Share & Ranking
Sharda Motor is India's largest manufacturer of exhaust systems for automotive players.
Strategic Alliances
The company has entered into new technology collaborations, specifically for suspension products in the passenger vehicle segment, to enhance its product portfolio.
External Factors
Industry Trends
The industry is shifting toward lightweighting and more stringent emission norms. Sharda is positioning itself by investing in R&D for these specific areas to maintain its market leadership.
Competitive Landscape
The company faces competition in the suspension and exhaust segments, but its scale as the largest exhaust manufacturer in India provides a cost and relationship advantage.
Competitive Moat
The company's moat is built on its market leadership in exhausts, established relationships with major OEMs, and first-mover advantage in R&D for specialized auto components. These are sustainable due to high entry barriers and deep integration with client supply chains.
Macro Economic Sensitivity
The company is highly sensitive to the domestic automotive cycle and production growth in the PV and LCV segments, which recently grew at 4-5%.
Consumer Behavior
A shift toward premium vehicles with higher component content per vehicle (CPV) is a positive trend for Sharda, as it increases the value of parts supplied per vehicle.
Geopolitical Risks
Geopolitical risks could impact the supply and pricing of precious metals used in catalysts and steel, potentially affecting the company's cost structure.
Regulatory & Governance
Industry Regulations
Operations are governed by automotive emission norms (BS-VI and beyond), state-specific labor and environmental laws, and Ind AS 115 for revenue recognition.
Environmental Compliance
The company runs CSR programs like 'Sharda - Green India Campaign' and 'Sharda Educate', though specific ESG compliance costs are not disclosed.
Taxation Policy Impact
The company paid INR 52.6 Cr in direct taxes (net of refund) in H1 FY26. It is subject to standard Indian corporate tax rates.
Legal Contingencies
The company faces pending direct and indirect tax litigations. It also manages legal compliance risks across multiple states where its plants are located.
Risk Analysis
Key Uncertainties
The primary uncertainty is the high level of customer concentration; the loss of a single major OEM contract could impact revenue by more than 20%.
Geographic Concentration Risk
The company is heavily concentrated in the Indian domestic market, making it vulnerable to local economic downturns.
Third Party Dependencies
High dependency on the production schedules of major automotive OEMs; any disruption in their manufacturing (e.g., due to chip shortages or strikes) directly impacts Sharda's off-take.
Technology Obsolescence Risk
The transition to Electric Vehicles (EVs) poses a long-term risk to the exhaust system business; the company is mitigating this by diversifying into suspension and lightweighting products.
Credit & Counterparty Risk
Receivables quality is strong, with a 10% improvement in debtor turnover (11.08x in FY25 vs 10.06x in FY24), indicating efficient collections from OEM clients.