Sundram Fasteners Limited (NSE:SUNDRMFAST)
India flag India · Delayed Price · Currency is INR
826.45
-6.80 (-0.82%)
May 12, 2026, 3:29 PM IST
← View all transcripts

Q3 25/26

Jan 29, 2026

Operator

Ladies and gentlemen, good day, and welcome to Sundram Fasteners Q3 FY 2026 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mukesh Saraf from Avendus Capital. Thank you, and over to you, sir.

Mukesh Saraf
Director, Avendus Capital

Thank you, Shubham. Good morning, everyone. Mukesh Saraf here from Avendus Capital. Appreciate everybody logging into this Q3 FY 2026 earnings call of Sundram Fasteners. From the management team, I'm pleased to host Mr. R. Dilipkumar, Chief Financial Officer, Mr. S. Narayanan, Executive Vice President, Marketing, and Mr. R. Ganesh, Vice President, Finance and Projects. I'll now hand over the call to Mr. Dilipkumar for his opening remarks, post which we'll begin the Q&A. Over to you, sir.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Thank you, and Mukesh, good morning to all. Welcome to a discussion on the nine-month and Q3 results of Sundram Fasteners. Are you experiencing any disturbance, Mukesh?

Operator

Yes, sir, there is a little bit of disturbance on the mic.

R Dilip Kumar
CFO, Sundram Fasteners Limited

I think right, right now, it's not there.

Operator

Yes, sir.

R Dilip Kumar
CFO, Sundram Fasteners Limited

So, we've had a reasonably good quarter. The domestic performance has been very strong. We registered 18% growth in the domestic segment in both our OE and aftermarket business put together. The exports have moderated a bit, as expected, because of the tariff pressures. The overall revenue for the quarter has come in at INR 1,359 crores. And the raw material costs have been stable, and our gross margins are up compared to the earlier quarters. But after adjusting for inventory movements, it's slightly lower, but at the RMC stage, the gross margin is above 60%. We've had reasonably good control over both variable costs and fixed costs. The only element, which, as expected, is the tariff, and the full brunt of the tariff has started impacting.

Some of our products are at 25%, some of them are at 50%, depending on the iron and steel content. That has had an impact at the contribution stage. Our fixed costs have remained stable, have been consistent across the quarters. The borrowings have come down because of better working capital management, lower inventory, relatively lower inventory. The depreciation impact has slightly come down because of lesser capitalization. You may have noticed that, like all companies, which have provided for the labor code impact, we've also taken an exceptional hit of INR 11 crores. The profit before tax, before the exceptional item, was INR 174 crores, compared to INR 186 crores the previous quarter. The difference of INR 9 crores-INR 12 crores is primarily arises out of tariff.

After adjusting for the one-time impact, we have reported INR 162 crore of PBT and after tax, INR 128 crore compared to INR 120 crore in the comparable quarter. But like I said, while it appears to be a flat number, but one should see it in the context of PBT before exceptional item, where the growth has been from INR 153 crore in corresponding quarter to INR 173 crore. The half, the nine-month number somewhat mirrors the quarterly performance with a strong domestic performance and moderating exports.

Our contribution has been better for the nine-month period, about almost 1% higher than the quarter. And the EBITDA is at 17.3% for the nine-month period. Directionally, in the earlier calls, we discussed whether we would touch 18%, but I think we are on that way, that journey. And, after adjusting for exceptional item and the taxes, we have reported, INR 400 crore or INR 401 crore profit after tax for the nine-month period, compared to, INR 382 crores. And, these are some of the highlights of our performance, and we're happy to take any questions which you may have.

Operator

Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Varun Arora from Emkay Global Financial Services. Please go ahead.

Varun Arora
Fund Manager, Emkay Global Financial Services

Yeah, hi. Thanks for the opportunity, sir. So just, what's your view on the long-term perspective going forward, ki how may, how much, the growth you're looking forward in the next two to three years, first? Second, now going forward, how much exports we are looking for, I mean, in terms of USD

R Dilip Kumar
CFO, Sundram Fasteners Limited

Hello?

Varun Arora
Fund Manager, Emkay Global Financial Services

About the margin, too. These are two first questions, and I look forward to listening, sir.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Margin, sir.

Operator

Mukesh, are you there?

Mukesh Saraf
Director, Avendus Capital

Hello, yes.

Varun Arora
Fund Manager, Emkay Global Financial Services

Hello.

Operator

There is no response from the participant.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yeah, maybe we can go to the next participant.

Operator

Yes. The next question comes from the line of Sahil Sanghvi, from Monarch Networth Capital. Please go ahead.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Yeah, good morning, sir. Am I audible? Hello? Hello.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Any issue with the connectivity?

Operator

Just, just a moment, sir. I'm checking.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Morning. Am I, am I audible? Hello?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Operator, is there any issue, connectivity?

Operator

Sir, we can't hear the participant. Just a moment.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Hello? Yes, hello, am I audible?

Operator

Ladies and gentlemen, please stay on hold while we correct the issue. Just a moment.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Hello. Yeah, good morning. Am I audible?

Operator

Yes, sir, you're audible now.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Yeah, good morning, sir. Congratulations for your numbers on the domestic front. That's pretty solid numbers. Sir, on the export front, I wanted to understand, with the tariff related issues and the demand, what is our strategy now to work on the exports? Because we are now seeing exports as a percent of revenue coming to 23%. I think one time we were at good 30, 33%. So, just wanted the management's understanding on how it will try to mitigate this environment.

R Dilip Kumar
CFO, Sundram Fasteners Limited

On the export front, they say North America is in a bit of a strain. Also, there's the indications are that

Operator

Sorry to interrupt, sir. There is a disturbance from your line.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Are you able to hear us now?

Operator

Yes, I can hear.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Is it clear now?

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Yes, sir.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yeah. On the exports front, as you rightly said, North America is in a bit of a strain now. And, even the indications going forward are that there'll be a sort of a gradual quarter-over-quarter improvement. But that said, from our perspective, we are trying to also expand and diversify the portfolio. And, we are in touch and working with a lot of customers in Europe, like, say, Poland, Romania, Sweden. We've got good RFQs, and we are working. Some are in the final stages of conclusion, some are early yet. And, even with the existing customers, we are trying to expand and work on areas like U.K., where there would not be much of a demand contraction on account of the tariffs. So this is the broad approach that we have taken, and we are trying to see hope there, because we've got a lot of inquiries from customers.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Right, sir. That's happy to hear. Secondly, sir, if you can show some. I mean, if you can throw some traction on what other the new projects are we looking at, any kind of new product addition or any kind of new... you know, in user industry we are targeting. Any kind of that perspective you can give?

R Ganesh
VP Finance and Projects, Sundram Fasteners Limited

I think with respect to the new projects and new products, as part of our non-auto diversification-

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Sorry to interrupt, sir. There is still a disturbance coming up.

R Ganesh
VP Finance and Projects, Sundram Fasteners Limited

As part of our diversification into non-auto, we are expanding on the wind energy fasteners, where. Am I audible?

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Yes, sir. Yes, sir.

R Ganesh
VP Finance and Projects, Sundram Fasteners Limited

Okay. With respect to the wind energy, where we have had the first phase of expansion and moved the numbers from INR 200-odd crore to INR 350 on an annualized basis. With the further expansion of the wind energy business, we are looking it to take it up to close to INR 500 crores on an annualized basis, and it has grown about 30%, from the current level. So that is one expansion, and activities are on course. The second one is with respect to our aerospace fasteners, where we have been hovering around, on a monthly basis, about INR 2.5-3 crores.

We have seen a jump of it touching close to INR 5 crores, which is witnessing a 50%-60% growth. That is another area where we are seeing traction. On the railway fasteners, where we have been working through our dealer distributor network, we see a lot of opportunities coming up on account of all this, Vande Bharat and the modernization of tracks. Those are the lines which we are pushing as part of our growth strategy.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Sure, sir, this is helpful. My last question is, sir, on the EV related orders that we've received from North America, any kind of status check, if you can provide on the timeline, on the ramp-up, what, what do you expect on that front?

R Ganesh
VP Finance and Projects, Sundram Fasteners Limited

With respect to the EV project, as expected or required from the customer, we have had the capacities in place, and during the last quarter or so, some amount of pull has been there. But predominantly, it is on the ICE segment. Out of the projects that we have worked out, which comprise of both EV, PHEV, and ICE, we are seeing some amount of trickle happening on the ICE segment, with EV expected to pick up probably in the second half of next year. That is the broad indication that we have. But while the project is already completed, we are also working with putting for alternative use, while we are working closely with the customer in terms of servicing their ICE requirements. But we are also working with alternate customers for better capacity utilization. Because these equipments are, you know, interchangeable between ICE, PHEV, and EV.

Sahil Sanghvi
Equity Research Analyst, Monarch Networth Capital

Sure, sir. Understood. Thank you so much, sir, and all the best.

R Ganesh
VP Finance and Projects, Sundram Fasteners Limited

Thank you, Aniket.

Operator

Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on your touchtone telephone. The next question comes from the line of Varun Arora from Emkay Global Financial Services. Please go ahead.

Varun Arora
Fund Manager, Emkay Global Financial Services

We are audible?

Operator

Yes, sir, now you are audible.

Varun Arora
Fund Manager, Emkay Global Financial Services

Right. So just a clarification on what you said on EV. So you're suggesting that EV will start to pick up in second half of FY 27. Is my assumptions right or wrong?

R Ganesh
VP Finance and Projects, Sundram Fasteners Limited

Yeah, yeah.

Varun Arora
Fund Manager, Emkay Global Financial Services

Okay, sir.

R Ganesh
VP Finance and Projects, Sundram Fasteners Limited

But it, it will be in line with the original project or assumption, but we'll see a trickle in respect to EV.

Speaker 12

Yeah, we are expecting a trickle in the second half of last year, because the programs, by and large, have been postponed. So, it would start with a trickle and then, maybe, mature later.

Varun Arora
Fund Manager, Emkay Global Financial Services

Okay. Okay, sir. So I have three questions. I'll just give it to you. So what sort of growth you are targeting in FY 2027 in terms of revenue? And what's your planned CapEx in FY 2027? And on the margin front, sir, you are pretty range bound in terms of margin. By... And by what timeline we can see you to break these this range and inching towards the 19%-20% of margin, sir?

R Ganesh
VP Finance and Projects, Sundram Fasteners Limited

On the margins front,

Operator

Sorry, sir, there is a lot of disturbance.

R Ganesh
VP Finance and Projects, Sundram Fasteners Limited

On the margins front, we have already moved from the 16% odd to 17% plus. And like I said in my opening remarks, we are directly going towards 18%. That's the broad guidance I can give you at this point. And, like we have said many times in the past calls, margins, which were hovering between 19%-20%, got impacted by the steep rise in RM prices. Once they have moderated, they are not moderated to the extent-

Operator

Sir, we can't hear you. Sorry, sir, we can't hear you properly. There is a disturbance from your side. Am I audible, sir? Yes, you are audible. Hello, sir. Are you there?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yeah, yeah, we are here. We are there. We're just trying to figure out how to make the call smooth. Anyway, so like I said, we are in the direction of 18%. That's our intermediate target. We look forward to achieve that, and we have dropped to below 17, and we were more closer to 16 than 17. That has improved. And once the export business recovers, and you will see us achieving that 18 or crossing that 18%. As far as CapEx expenditure is concerned, roughly we would have about INR 250 crores of CapEx expenditure in any year, and some of it, about 30% of it, could be replacement CapEx.

And we may look to add new lines wherever our capacity utilization has already touched 70%-75%. That's the broad guidance on capital expenditure. On the growth, we would aim, endeavor to achieve a two-digit growth, and our business plans are based on market feedback and discussion with customers. While it's slightly premature, maybe in the next call, I'll be able to give you a better indication, but I would think optimistically that we will not look at anything lower than 10%.

Operator

Thank you. The next question comes from the line of Aditya from Happy to Invest. Please go ahead.

Aditya Agrawal
Equity Research Analyst, Investec

Yeah, hi. Am I audible?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yes.

Operator

Yes.

Aditya Agrawal
Equity Research Analyst, Investec

Yeah. Thank you. Thank you, sir. So, sir, my question is on non-auto segment. It's like we aggressively have a goal to 50% of total revenue, this target. So is the margin profile on the wind and aerospace segment currently higher than traditional automotive customers business? So how we are planning to take it forward in the 12-18 months, and what is the total revenue auto coming from the non-auto segment in the end of quarter three?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Non-auto currently.

Aditya Agrawal
Equity Research Analyst, Investec

Yes.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Comprises of, aerospace. Are you able to hear me?

Operator

Yes, sir, but there is a disturbance. Earlier, you were speaking, that was clear. Just speak a little louder. That will be better, sir.

R Dilip Kumar
CFO, Sundram Fasteners Limited

The aerospace, railways, and wind energy, tractors, aftermarket segment comprise 38%, roughly, of our revenues today, from about 30% or it has moved to 13%. That's because of the drop in export revenues. And the aerospace division and the wind energy businesses, since wind energy has scaled up nicely and considerably and became quite profitable in terms of operations as well as the returns. And the aftermarket has been growing at a steady pace, and this year we have had very strong performance in the tractor segment. These will continue to do well because our wind energy is poised for the next round of expansion, and aerospace today is less than INR 100 crore. So on that low base, we'll continue to see robust growth in the coming quarters also. I hope I have answered your question.

Aditya Agrawal
Equity Research Analyst, Investec

Okay. And so my second question is on our content per vehicle. So we are shifting from SUV to traditional hatchback, right? Which is a higher horsepower businesses. Am I understanding correct, sir? And and is a more premium segment, right? So is it content per vehicle increasing in terms of for our businesses?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Content. Can you, can you repeat the question?

Operator

Content. He's asking content per vehicle

Aditya Agrawal
Equity Research Analyst, Investec

Yeah.

Operator

Between SUV and, this one, whether there is more or less content.

R Dilip Kumar
CFO, Sundram Fasteners Limited

No, on the SUVs it will be more than the small cars, or the lower category segment. In all segments, we see movement towards the higher end and the premiumization. And so, concomitant content per vehicle increase is there, for all parts, in our portfolio as well.

Aditya Agrawal
Equity Research Analyst, Investec

Got it. Got it. Thanks.

Operator

Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star and one on your touchtone telephone. The next question comes from the line of Amar Maurya from Lucky Investments. Please go ahead.

Amar Maurya
Equity Research Analyst, Lucky Investments

So, thanks a lot for the opportunity. So in terms of your domestic growth, what would be, I mean, what would be the mix between the fasteners versus non-fasteners into this? And how the mix would be in the CV and TW for the domestic market?

R Dilip Kumar
CFO, Sundram Fasteners Limited

No, I think in the domestic market, the pickup or growth, it centers around cars, M&HCV segment for us, and with strong presence in tractors. So those are the three segments, which is driving the growth in domestic segment.

Amar Maurya
Equity Research Analyst, Lucky Investments

Okay, okay. Basically, commercial vehicle and tractors are driving the growth, right?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yeah, commercial vehicles. So it's all the three segments, that is how I would put it. Between commercial M&HCV, LCV, combined with cars and multi-utility vehicles and tractors. So this is what is driving the growth of domestic segment. And with respect to fasteners as well as others, I think we have been witnessing growth across all our product segment in the domestic market.

Amar Maurya
Equity Research Analyst, Lucky Investments

Okay, okay. Currently, what would be the mix of fastener in the overall domestic revenue?

R Dilip Kumar
CFO, Sundram Fasteners Limited

In the overall domestic revenue, fasteners would be about 40%-45%, sir.

Amar Maurya
Equity Research Analyst, Lucky Investments

Okay, okay. Perfect, sir. Perfect. Thank you, sir. Thanks a lot.

Operator

Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question comes from the line of Amar Ahil from Radian Capital. Please go ahead. Yes, sir, you may proceed with your question.

Amar Ahil
Equity Research Analyst, Radian Capital

Hello. Am I audible, sir?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yes, yes, you are.

Amar Ahil
Equity Research Analyst, Radian Capital

I'm so sorry, I just, I might have missed out on the next thing. So I just wanted to ask that, you have done INR 217 crore of CapEx for the nine-month period, so will that start contributing to the revenues? And second thing, what are the further CapEx plans for the year ending FY 2026? And any plans of CapEx for FY 2027? That's it.

R Dilip Kumar
CFO, Sundram Fasteners Limited

So as far as capital expenditure is concerned, we will probably finish the year, FY 2026, with around INR 350 crore. And I expect-

Amar Ahil
Equity Research Analyst, Radian Capital

Sorry to interrupt, sir, there is a disturbance.

R Dilip Kumar
CFO, Sundram Fasteners Limited

I expect our CapEx to be around INR 250 crores next year. The CapExes will start contributing, and like I said, about 25%-30% based on past experience is replacement capital expenditure, which improves the productivity, and we replace with state-of-the-art machine. The remaining 60%-65% would be adding directly to the revenue. These are investments are made with clear indications from customers. So we have a kind of agreement with the customers, basis which we further make investments or expand our facilities.

Amar Ahil
Equity Research Analyst, Radian Capital

Okay, so, you mean that, when the CapEx is done, it will directly start contributing?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yes. So typically, the capital expenditure in auto, where some of the furnaces or machines have to be imported, and it typically takes 6-9 months time. So the number which you see as an expenditure would remain in capital in progress for some time. And then, the volumes to mature or ramp up may take further time, but initially, in the first 6 months or so, after the machines are installed, probably we'll have a 1-to-1 kind of approach.

Amar Ahil
Equity Research Analyst, Radian Capital

Okay. How much will that contribute to the revenue?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Like I said, if we are getting about INR 300 crore, about INR 100 crore would be for investment, the balance INR 200 crore would be for revenue. And, like I said, 1:1 is a safe bet to assume.

Amar Ahil
Equity Research Analyst, Radian Capital

Okay. And, what are your utilizations right now, sir?

R Dilip Kumar
CFO, Sundram Fasteners Limited

So we have many businesses, and it varies from business to business, line to line, assembly to assembly. So, while it's difficult to put a number, across the company, one number, but each unit will have its own capacity utilization and equipment effectiveness. So broadly, just to make it easy for you, I would say probably around we are at 60% capacity utilization.

Amar Ahil
Equity Research Analyst, Radian Capital

Okay. And, the guidance for FY 2027 was, double-digit growth in, revenue and 18% margin guidance, right, sir?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Margin, definitely, yes. And like I said, slightly premature to discuss about the business, I mean, revenue guidance for next year. And I said we would not look at anything lower than double-digit growth.

Amar Ahil
Equity Research Analyst, Radian Capital

I'm sorry, I missed out on the revenue guidance. Could you repeat it, sir?

R Dilip Kumar
CFO, Sundram Fasteners Limited

We would not be looking at any growth any number which is lower than a double-digit growth. That's what I said. And-

Amar Ahil
Equity Research Analyst, Radian Capital

Okay.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Slightly premature to give you a guidance. Maybe the next call I'll be able to indicate with certainty.

Amar Ahil
Equity Research Analyst, Radian Capital

Okay, sir. Fine. That, that's it from my side, sir. Thank you so much.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Thank you.

Operator

Thank you. The next question comes from the line of Mukesh Saraf from Avendus Capital Private Limited. Please go ahead.

Amar Maurya
Equity Research Analyst, Lucky Investments

Yes, I have the question queue built. I just had some basic questions. First is, if you could just-

Mukesh Saraf
Director, Avendus Capital

kind of give us the revenue mix that you usually give, across, you know, different cuts. So one is the OEM, aftermarket, exports, and then within that, domestic, if you could give the breakup of, CV engines and all of that, that you usually give.

R Dilip Kumar
CFO, Sundram Fasteners Limited

I think, I think with respect to the segment-wise revenue, exports today stands at about 25%, followed by-

Mukesh Saraf
Director, Avendus Capital

Yeah.

R Ganesh
VP Finance and Projects, Sundram Fasteners Limited

60-62% coming from OE and 12-13% from aftermarket.

Mukesh Saraf
Director, Avendus Capital

Right.

R Dilip Kumar
CFO, Sundram Fasteners Limited

That is on the segment. With respect to the domestic segment, whatever M&HCV, CV plus engines, that would constitute about 35%, followed by cars and MUV at 40%, and the tractors-

Mukesh Saraf
Director, Avendus Capital

Okay.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Between 10%-12%. So these are the major, segment-wise split for domestic sales.

Mukesh Saraf
Director, Avendus Capital

Okay. So the mix hasn't changed much, as such. The fact that we are seeing an improvement in CVs, probably I was expecting some kind of a change there. What's the outlook for MHCV, sir, domestically? And how should that kind of go for you guys?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Mukesh, I think the mix from the business, OE domestic, OE, retail export perspective has changed a bit.

Mukesh Saraf
Director, Avendus Capital

Yeah.

R Dilip Kumar
CFO, Sundram Fasteners Limited

But within the domestic segment, as you pointed out, the mix has not changed much because all segments have grown. So, that said, next year, going forward, there are indications coming for the commercial vehicle segment is roughly, 8%-10% growth over this year. And on the-

Mukesh Saraf
Director, Avendus Capital

Right

R Dilip Kumar
CFO, Sundram Fasteners Limited

on the personal car segment also, it's around 8%-10%. And on the tractors, upwards of 10% is what is being indicated right now. We are yet to receive the full year projections from all the customers.

Mukesh Saraf
Director, Avendus Capital

Okay.

R Dilip Kumar
CFO, Sundram Fasteners Limited

The overall sentiment is towards this.

Mukesh Saraf
Director, Avendus Capital

Understood. Understood. Just again, on the domestic business, I think last couple of quarters, you had kind of indicated that you're working on a lot of new RFQs, especially for the SUV segment, and you know, that something should materialize in the next few months, I mean, next couple of quarters or so, is what you had indicated. Where do we stand in those new businesses? Obviously, I mean, just setting aside the industry growth, just trying to assess what we can do, you know, over and above the industry growth in terms of new business or wallet share, probably, that we are looking at with certain OEMs.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yeah. See, it's always our endeavor to keep increasing our share within the pie,

Mukesh Saraf
Director, Avendus Capital

Yeah

R Dilip Kumar
CFO, Sundram Fasteners Limited

irrespective of the external environment. As we said last time, those RFQs, some of them are matured and some are in the final stages of discussion. And on the existing customers share, with quite a few customers, we have increased share of business also, both on the-

Mukesh Saraf
Director, Avendus Capital

Yeah

R Dilip Kumar
CFO, Sundram Fasteners Limited

commercial vehicle side as well as on the, tractor side.

Mukesh Saraf
Director, Avendus Capital

Okay. So, fair to assume, I mean, because there are some questions around next year growth. So fair to assume we should be well ahead of the industry growth. So if industry, say, is going to grow 10%, how much would you want to, say, outgrow the underlying industry?

R Dilip Kumar
CFO, Sundram Fasteners Limited

See, if it is, industry grows by 10%, I think we'll be outperforming them by, say, from 10, we will be at 12%.

Mukesh Saraf
Director, Avendus Capital

So a question on the subsidiary businesses. You know, any update there? The performance there has been just about average, in line with previous quarters. We haven't seen too much change, so any update there?

R Dilip Kumar
CFO, Sundram Fasteners Limited

With respect to subsidiaries, I will address Cramlington. That mirrors more or less a European truck market, where we have seen a deep growth in 2025 compared to 2024.

Mukesh Saraf
Director, Avendus Capital

Right.

R Dilip Kumar
CFO, Sundram Fasteners Limited

So that mirrors the truck segment. The positive thing is, the subsidiary is cash-generating cash and is managing the requirements on its own. With respect to China, I think, we have seen some uptick in construction equipment segment and the CV. So that is pushing up the revenue within the China market, because almost 80% of the revenue is generated within China. The revival of construction and CV segment is helping in its momentum of growth.

Mukesh Saraf
Director, Avendus Capital

Okay.

R Dilip Kumar
CFO, Sundram Fasteners Limited

But, the only point with respect to China, the price pressures on account of, capacity available, so that is one area which we are working on. Otherwise, I think, the business has, done reasonably well, given the market conditions there.

Mukesh Saraf
Director, Avendus Capital

Right. Right, right. And lastly, from my side, I mean, you did kind of mention that margins should be around that 18% mark, which is like close to, maybe more than 100 basis points improvement, in the coming year. So, any specific, you know, triggers for this? Is there some new export business? Because export is probably a better margin business, especially with the way, Forex is moving, or, you know, any higher, higher value-add business that we are seeing, coming through, any kind of, drivers for this? Because capacity utilization remains low, about 60-odd%. So just trying to understand what, what could be the drivers for this margin.

R Dilip Kumar
CFO, Sundram Fasteners Limited

There are three levers.

Mukesh Saraf
Director, Avendus Capital

Yeah.

R Dilip Kumar
CFO, Sundram Fasteners Limited

One is the aerospace business, which is high-margin business for us, while it is not-

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Mm.

R Dilip Kumar
CFO, Sundram Fasteners Limited

a substantial part of the pie, it's definitely

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Yeah.

R Dilip Kumar
CFO, Sundram Fasteners Limited

The trickles are making a small difference.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Okay.

R Dilip Kumar
CFO, Sundram Fasteners Limited

The margins from 17.3% to 17.4%. We are happy to take that.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Okay.

R Dilip Kumar
CFO, Sundram Fasteners Limited

The second is the wind energy business, where we've had a 30% growth, and that is poised for further expansion. It's scaled up nicely, and the operating leverage is kicking in there. And the third-

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Mm.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Like, like you said, is the exports. We've had high-margin businesses which have moderated a bit. And like we also explained, now, whether EV or ICE, we have the capacity.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Yeah.

R Dilip Kumar
CFO, Sundram Fasteners Limited

We are partnering, of course, have intensified in Europe as, as well, not only depending on, America, and I think we are no longer dependent on America as much as before.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Sure.

R Dilip Kumar
CFO, Sundram Fasteners Limited

So as we settle, enter into contracts, settle new businesses, enter new businesses with higher margins, and

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Mm.

R Dilip Kumar
CFO, Sundram Fasteners Limited

You see that also percolating down to much higher EBITDA.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Right. Right. Right. No, it makes sense, sir. Great, so thank you. I think we have one question in the queue. Shubham, if you could just take that.

Operator

Thank you.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Uh, yeah.

Operator

The next question comes from the line of Aditya from Happy to Invest. Please go ahead.

Aditya Agrawal
Equity Research Analyst, Investec

Yeah, thanks for the opportunity, sir, again. So my second question on our Sri City facility plant. So the capacity utilization level, sir, could you please share the current installed capacity of this plant in a tonnage or units, and what is the current capacity, current utilization level here? And on a margin profile, sir, given that this facility is focused on a more specialized EV components and export markets, right? So is the EBITDA margin profile of this specific plant attractive to the blended company margin of 18%? If so, sir, how many basis points can we expect more EBITDA margin from this plant? Yeah.

R Dilip Kumar
CFO, Sundram Fasteners Limited

With respect to capacity utilization, I think already it was explained saying that we have eight lines of business, and given the market conditions, it few of them would be operating at about 70%+, and wherever with respect to EV or powertrain components, that might be operating, say, sub 50%. So it's a mixed bag for us. And with respect to the margins, as we had explained, once the export business, which has now moderated, if it comes back, whether it is in terms of ICE business or CV or EV, we should see an uptick in the overall EBITDA margin of Sundram Fasteners.

Aditya Agrawal
Equity Research Analyst, Investec

Got it. Got it. Thank you.

Operator

Thank you. The next question comes from the line of Anuj Sehgal from Manas Capital. Please go ahead.

Anuj Sehgal
Founder, Manas Capital

Yeah, hi. I just wanted to understand on the export side, can you give a breakup of the geographical mix, both for this year, nine months, and how does it compare to last year, nine months?

R Dilip Kumar
CFO, Sundram Fasteners Limited

I think with respect to the geographical presence with respect to export, while there has been some contraction in the North American market, comprising of U.S., Mexico and Canada, which generally used to be at about 70% or so, now we are seeing that, say between 60%-62%. So that is on the North American market. And the presence in Europe, which used to be about 20%, now we are seeing that inching up to 25%. So broadly, the shift is, say 3%-5% drop in North America, followed by increase in Europe and the APAC region. That's the broad geographical segment with respect to exports.

Anuj Sehgal
Founder, Manas Capital

Right. And then is the margin profile for the export business similar, whether it is to North America or to Europe or other regions?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yeah, the margin profiles are, you know, comparable. It depends on the product group which we are exporting. But it mirrors more or less, whether it is to America or to Europe.

Anuj Sehgal
Founder, Manas Capital

Okay. Thank you very much.

Operator

Thank you. The next question comes from the line of Parikshit Gujarati from Nivesh India. Please go ahead.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Hello. Thank you for this opportunity, sir. Am I audible?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yeah, yeah, you are audible.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Okay. So I wanted to ask on the side of BIS, has the BIS been implemented by the government? So the government was to implement the BIS norm for the fastener import we are doing. So I wanted to ask on that side.

R Dilip Kumar
CFO, Sundram Fasteners Limited

I think with respect to... I think you are talking about the Quality Control Order, QCO.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Yeah, yeah, yeah. Yeah, BIS, yes.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Yeah. While the government has been pushing, I think, still some amount of imports are happening based on representation from the OEMs to the government. But nevertheless, we are also seeing some amount of business shifting on account of this QCO, and these OEMs have started interacting with us for sourcing fasteners.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

Okay, okay. My second question was, how much revenue of Sundram Fasteners come from the auto sector?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Today, the automotive segment is close to about 62%, with the non-auto comprising 38%.

Parikshit Gujrati
Equity Research Analyst, Niveshaay

My last question was, again, on the higher side only, that, so all the OEMs which are MNC, such as Kia, Hyundai, and Maruti, like, the, and these OEMs, so they import an approximate of 1,100, 1,200 closure fasteners every year for their automobile segment. So what is your view on that? Can this market come to India if the BIS norms are implemented as an import substitution thing?

R Dilip Kumar
CFO, Sundram Fasteners Limited

Well, it is potentially possible, and that is why the QCOs have been issued to encourage domestic sourcing. But many of them also may not justify investments or scaling up for one step, because they could be low volume, and they could be for certain luxury segment. And the OEMs may also be reluctant, because it is part of the suppliers are part of their global supply chain. So there are many considerations in this, and one could be the quality, other could be the low volume, third could be the rigorous testing requirements.

So yes, it is an opportunity which we are eyeing, and as policy constraints are eased, and government is also reviewing some of these imports at the HSN level, each code, whether it's coming from China, with geography, it is getting imported, the quantum, and we are also contemplating many policy measures. So therefore, it is an opportunity, but it will take some time.

Operator

Thank you. Ladies and gentlemen, as there are no further questions, I now hand the conference over to the management for closing comments. Thank you, and over to you, sir.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Nothing specific, and like I said, we are looking forward to a reasonably good Q4. I think the January month has started well, and we expect - and the domestic market is robust, and the export pipeline is also expected to improve this quarter. We hope to report good numbers as far as Q4 is concerned.

Operator

Thank you. On behalf of Sundram Fasteners, that concludes this conference. Thank you for joining us, and you may now disconnect your line.

R Dilip Kumar
CFO, Sundram Fasteners Limited

Thank you.

Powered by