Sansera Engineering Q4 FY26: Record margins, rising ADS scale, and a new JV

Sansera Engineering ended FY26 with its strongest annual performance so far. Consolidated revenue from operations rose to INR 34,979 million, up 16% year-on-year. Profitability improved faster than revenue. EBITDA increased to INR 6,321 million, up 23%, and EBITDA margin expanded to 18.1% from 17.1% in FY25. Profit after tax rose to INR 3,269 million, up 51%, with PAT margin improving to 9.3% from 7.2%.

The March quarter was even stronger. Q4 FY26 revenue reached INR 9,987 million, up 28% YoY. EBITDA margin moved up sharply to 19.3% versus 16.3% in Q4 FY25. PAT margin expanded to 12.3% from 7.6%, taking quarterly PAT above INR 1,000 million to INR 1,231 million. Management attributed the margin lift primarily to revenue mix and operating leverage.

Mix shift: Auto remains the base, but diversification is accelerating

Sansera’s diversification strategy showed up clearly in the mix. Auto ICE still dominates at 70.1% of FY26 revenue, but its share has reduced compared to earlier years. The faster-growing areas are non-auto and the tech-agnostic and xEV portfolio.

In Q4 FY26, segment revenues were led by Auto ICE at INR 6,426 million, followed by Non-Auto at INR 1,736 million, Auto Tech-agnostic at INR 766 million, and xEV at INR 451 million. Non-auto revenue growth was particularly strong in the quarter, supported by ADS.

On the geography side, the company reported a higher share of international revenues over time. For FY26, the presentation shows India at 65%, Europe at 19%, the USA at 7% and other foreign countries at 9%. For Q4 FY26, the slide shows India at 62%, USA at 21%, Europe at 10% and other foreign countries at 7%.

Financial summary (Consolidated)

ADS: scale is building, and the backlog provides multi-year visibility

The biggest strategic highlight in FY26 was the momentum in ADS (Aerospace, Defence and Semiconductor). The company reported FY26 ADS product sales of INR 3,155 million, representing 155% YoY growth. In the earnings call, management also clarified that full-year ADS revenue including scrap sales would be about INR 3,498 million.

More importantly, the company disclosed a cumulative unexecuted order backlog for ADS of INR 44,638 million as of March 2026. The presentation states this backlog is executable in about five years. Management also spoke about broadening product capabilities both vertically and horizontally, including an increase in component size handling and more complex machining capabilities. This is being used to move faster from first-article inspection to commercial production.

For FY27, management guided ADS revenue at INR 5,500 to 6,000 million. On profitability, in Q&A, management indicated that as utilization improves and incremental capacity ramps up, ADS margins could move toward 25% to 30%, though no fixed quarter was committed.

Capacity expansion is underway. The presentation lists an upcoming 80,000 sq ft hangar expansion within the existing campus to support orderbook execution and growth beyond FY27. Management said construction is expected to complete by July or August, with revenue contribution starting gradually in Q3 and Q4 as FAIs get completed and production ramps.

Capital allocation and balance sheet: capex continues, leverage stays restrained

Sansera invested INR 5,097 million in capex in FY26. The company expects a similar capex level in FY27. Management noted that ICE facilities are operating at peak utilization, and part of FY27 capex will go into expanding ICE capabilities. At the same time, the company is investing in new ADS facilities to support growth backed by the strong backlog.

From an efficiency standpoint, the company presented asset turns of 1.25 to 1.3x for Automotive and 2.0x for ADS. The capex mix for FY26 was weighted toward plant and machinery at 69%.

The balance sheet position remained supportive. The presentation shows net debt to equity at 0.00x in FY26. Return ratios also improved: ROCE (excluding CWIP) increased to 18.0% and ROE improved to 11.1%.

Strategic moves: Nichidai JV and MMRFIC investment

Alongside ADS scaling, Sansera announced a joint venture with Nichidai Corporation, Japan. The JV is named Nichidai Sansera Private Limited, with a 60:40 shareholding (Sansera:Nichidai). The stated scope is manufacturing precision forged and machined aluminium and steel parts for differential assemblies, compressors, driveline and other advanced automotive components not currently manufactured by Sansera, for both India and overseas markets.

Management clarified in the call that Nichidai is a technology provider and there is no captive demand from Nichidai itself. RFQs have been generated and responses submitted, while machinery installation is expected around September. Sansera expects to invest about INR 50 crore in FY27 as its contribution.

The company also highlighted its strategic investment in MMRFIC Technology, positioned around advanced radar technologies. The presentation notes Sansera has the right to increase stake to 51% at a predefined valuation formula and that an additional INR 100 million investment was made during the year.

What to watch next

Sansera enters FY27 with three visible themes from the filings: sustaining Auto ICE growth while expanding capacity, increasing exposure to tech-agnostic and xEV components, and scaling ADS with guided revenue growth and a disclosed multi-year backlog. Management also flagged near-term uncertainties: inflationary pressures across inputs and logistics, soft international order inflows due to global uncertainty, and labor availability challenges.

The key near-term marker is execution. FY27 will test how quickly new ADS capacity converts backlog into revenue, how the mix evolves, and whether the margin expansion seen in Q4 FY26 can be sustained as capex and working capital requirements rise with growth.