Sansera Engineering Limited: Engineering Growth Amidst Shifting Tides in Q2 FY26

Sansera Engineering Limited, a prominent player in the precision engineering sector, has once again demonstrated its resilience and strategic acumen, delivering a robust performance in the second quarter of Fiscal Year 2026. The company reported its strongest-ever quarterly results for the third consecutive time, navigating various industry challenges with a focus on engineering innovation and operational efficiency. This stellar performance underscores Sansera's commitment to diversifying its revenue streams while maintaining a strong foothold in its core automotive and non-automotive segments.

For Q2 FY26, Sansera recorded a revenue from operations of INR 825.2 Crore, marking an 8% year-on-year growth. The company's profitability remained robust, with an EBITDA of INR 143.1 Crore and a healthy EBITDA margin of 17.3%. Profit After Tax (PAT) surged by 38% YoY to INR 71.4 Crore, translating to a PAT margin of 8.7%. This impressive growth was achieved despite external pressures such as tariffs and supply chain disruptions, highlighting the effectiveness of Sansera's operational strategies.

The non-auto segment emerged as a significant growth driver, expanding by a healthy 56.4% year-on-year in Q2 FY26. This growth was primarily propelled by the Aerospace, Defence & Semiconductor (ADS) division, which posted an exceptional 80.0% YoY growth, contributing INR 49.6 Crore to the topline. The ADS segment is a strategic priority for Sansera, with a substantial unexecuted order backlog of INR 3,953.3 Crore, expected to be executed over approximately five years. The company has provided strong revenue guidance for ADS, targeting INR 300-320 Crore for FY26 and INR 500-550 Crore for FY27. This momentum is further supported by ongoing capacity expansions, including a new hangar slated for completion by mid-next year.

Within the automotive sector, performance was mixed. The India Business delivered an 8.5% YoY growth, while the international business grew by 7.3% YoY. Exports to the USA saw a strong 14.9% YoY increase, driven by improvements in off-road, industrial engines, and the ADS segment. The Sweden business also remained strong, with sales of INR 58.9 Crore, marking a 79.1% YoY growth. However, exports to Europe (excluding Sweden) declined by 28.5% due to supply chain challenges and a slowdown in the PV segment. The xEV and tech-agnostic segments were also impacted by tariff-related uncertainties and lower offtake from a major North American consumer. Despite these challenges, the 2-wheeler motorcycle segment showed decent growth, although scooters experienced a decline.

Financial Performance Snapshot (INR Crore)

Segmental Revenue Mix (Q2 FY26)

Sansera's strategic initiatives are clearly geared towards future-proofing its business. The company is actively expanding its product portfolio and customer base, with a strong focus on high-growth emerging segments. This includes significant investments in the ADS division, forging capacity expansion, and exploring a US manufacturing facility to meet regional content requirements and capitalize on opportunities in stationary engines and HCVs. The board has also approved a further investment of INR 30 Crore in MMRFIC technology, aiming to strengthen its presence in defense and space programs.

Management's commentary indicates a positive outlook for the second half of FY26, with expectations of entering at least the teens for full-year growth. The company's balance sheet remains strong and net debt-free, supported by healthy operating cash flows. Sansera's commitment to sustainability is also evident, with its Aerospace Division achieving IGBC Platinum Certification for two plants. The company's ability to adapt to evolving market dynamics, coupled with its disciplined capital allocation and focus on innovation, positions it well for sustained growth in the coming years.

In conclusion, Sansera Engineering Limited's Q2 FY26 performance reflects strategic clarity and disciplined execution. By leveraging its engineering expertise, diversifying into high-growth non-automotive segments, and making targeted investments, Sansera is well-equipped to navigate industry complexities and capitalize on emerging opportunities, reinforcing investor confidence in its long-term trajectory.