Shivalik Bimetal Controls Q4 FY26: Margins improve as India offsets export softness

Shivalik Bimetal Controls Limited closed FY26 with steady execution across its core precision-materials portfolio and a clearer push into higher value assemblies. On a consolidated basis, revenue from operations rose 12.30 percent year on year to ₹570.86 crore. EBITDA increased 26.03 percent to ₹130.72 crore, and PAT grew 24.76 percent to ₹95.84 crore. EBITDA margin expanded 250 basis points to 22.90 percent, showing the benefit of operating leverage even as demand shifted by geography.

The quarter also reflected a similar pattern. Q4 FY26 consolidated revenue grew 22.80 percent year on year to ₹162.63 crore, while EBITDA rose 24.48 percent to ₹35.47 crore. PAT improved 23.80 percent to ₹26.13 crore. Gross margin for the quarter was broadly stable at 42.91 percent, but for the full year it improved 212 basis points to 45.21 percent.

Standalone numbers, which track the core business more directly, point to a margin-led year rather than a volume-led one. FY26 standalone revenue increased 5.66 percent to ₹461.95 crore. EBITDA grew 15.01 percent to ₹112.37 crore, and PAT grew 12.94 percent to ₹81.80 crore. The gross margin widened 281 basis points to 49.39 percent, while EBITDA margin improved 198 basis points to 24.32 percent. In Q4 FY26 standalone, revenue rose 2.18 percent to ₹116.71 crore, EBITDA rose 3.05 percent to ₹27.27 crore, and PAT rose 4.34 percent to ₹20.48 crore.

Behind these numbers is a company with a defined niche. SBCL describes itself as India’s only fully integrated manufacturer of precision thermostatic bimetals, low-ohmic shunt resistors, silver contacts, bus bar connectors, and PCBA assemblies. It operates three manufacturing campuses and serves more than 300 OEM and Tier-1 customers across 38 countries. Exports contributed 56.66 percent of consolidated revenue in FY26.

FY26 in context: steady growth with a changing demand mix

FY26 was shaped by a shift in end-market and geographic demand, more than by a collapse in overall activity. Management notes that topline stayed steady despite a North American EV slowdown, supported by domestic smart-meter demand, switchgear exports, and stronger momentum in Europe. This shift matters because it influences the mix across SBCL’s product lines, and mix is a large driver of margins for precision component businesses.

On the standalone track record (FY22 to FY26), revenue rose from ₹324 crore in FY22 to ₹462 crore in FY26. EBITDA moved from ₹79 crore to ₹112 crore over the same period, and PAT increased from ₹52 crore to ₹82 crore. Margins stayed in a relatively tight band, but FY26 showed a clear recovery from FY25, with EBITDA margin improving from 22 percent to 24 percent and PAT margin from 17 percent to 18 percent.

The consolidated view adds scale and stronger growth in FY26, with revenue at ₹570.86 crore and net worth at ₹481 crore. The company also highlighted a net cash position, with ₹105 crore cash versus ₹59 crore debt at the consolidated level.

Segment performance: shunts and bimetals share the centre of gravity

SBCL’s business is split across three reported segments for FY26: shunt resistors, thermostatic bimetals, and electrical contacts. In FY26, shunt resistors contributed ₹230.68 crore, thermostatic bimetals contributed ₹231.25 crore, and electrical contacts contributed ₹110.94 crore. Shunts and bimetals each contributed about 40 percent of FY26 revenue, with contacts at about 19 percent.

The mix shows why SBCL’s current strategy is framed around forward integration. Shunts and bimetals are core precision material platforms, and contacts are a vertical integration step into switching components. The company has also added bus bar connectors and PCBA assembly as new offerings to move toward ready-to-use sub-assemblies.

The Q4 product data shows an important nuance: volumes were down, but value held up. In Q4 FY26, shunt volumes declined year on year to 259,377 kg from 302,160 kg, while shunt revenue increased to ₹59 crore from ₹55 crore. Bimetal volumes declined to 291,074 kg from 339,851 kg, while bimetal revenue was slightly lower at ₹57 crore versus ₹59 crore. For the full year, shunt volume dipped to 1,097,910 kg from 1,122,955 kg, yet revenue rose to ₹231 crore from ₹212 crore. Bimetals volume increased slightly to 1,294,019 kg from 1,283,519 kg, and revenue rose to ₹231 crore from ₹225 crore.

This combination of lower volumes and higher shunt revenue suggests improved realizations and mix, which aligns with the company’s broader focus on value-added components and assemblies. It also indicates that the shunt business is becoming more meaningful in value terms. The presentation notes that in Q4 FY26, shunts contributed about 50 percent of total business in value terms.

Geography and working capital: Europe and India step up, cash cycle stretches

The geographic data from the deep dives shows the same theme as management commentary. Europe strengthened across both major segments, while the Americas softened.

For thermostatic bimetals in Q4 FY26, Europe revenue rose to ₹13.92 crore from ₹9.64 crore, while the Americas declined to ₹9.29 crore from ₹12.78 crore. India declined to ₹28.72 crore from ₹32.11 crore, and the rest of Asia increased to ₹5.55 crore from ₹4.22 crore.

For shunt resistors in Q4 FY26, India grew sharply to ₹23.43 crore from ₹15.85 crore, and Europe increased to ₹7.81 crore from ₹6.41 crore. The Americas declined to ₹13.22 crore from ₹18.55 crore, while the rest of Asia was broadly flat at ₹14.76 crore.

Full-year numbers show a similar direction. In FY26, bimetals grew strongly in Europe to ₹50.73 crore from ₹34.52 crore, while India declined to ₹114.86 crore from ₹124.40 crore. Shunts grew in India to ₹85.90 crore from ₹67.44 crore and in the rest of Asia to ₹61.16 crore from ₹48.59 crore, while the Americas declined to ₹55.50 crore from ₹71.70 crore.

The export mix remains large. FY26 domestic sales were 43 percent and exports were 57 percent, with sales offices listed across markets including Brazil, the USA, Italy and the EU, Russia, Japan, South Korea, Taiwan, China, and India. That spread reduces single-market dependence, but it also increases the importance of working capital discipline because export cycles can be longer.

In FY26, the cash cycle moved in the opposite direction. Collection days increased to 92 from 81. Inventory days increased to 204 from 184. Accounts payable days declined to 38 from 47. Net working capital days increased to 258 from 218. This is a material expansion and becomes a key watch item because SBCL’s investment case emphasises strong cash generation.

The balance sheet still shows growing liquidity. Consolidated cash and cash equivalents increased to ₹105 crore in FY26 from ₹79 crore in FY25, while trade receivables increased to ₹156 crore from ₹111 crore and inventories increased to ₹153 crore from ₹131 crore. Those moves are consistent with higher scale, but also consistent with the working capital stretch.

Strategy and moat: technology-led manufacturing with forward integration

SBCL’s strategy has two clear tracks. The first is to protect and extend its technology advantage in core processes, mainly electron beam welding for shunts and diffusion bonding for bimetals. The second is to move outward into assemblies and sub-assemblies, particularly bus bar connectors and PCBA solutions, where the company can capture more value per customer program.

The presentation frames the company’s moat around a dual-process technology base, an in-house machine build capability, and long customer programs. It highlights that customer re-qualification can take 24 months and that average program life can be 15 years or more. These are standard features of qualified component supply in automotive and electrical systems, and they can provide revenue visibility once a part is designed in.

On manufacturing, the company positions its in-house electron beam welding capability as both a technical barrier and a cost advantage, including an ability to build specialised EBW machines at about half the cost of importing them. On diffusion bonding, it highlights rapid alloy-grade development and a portfolio of 77 bimetal grades. The narrative ties these capabilities to customer lock-in through design platforms in switchgear, HVAC, and EV-related applications.

The most visible strategic step in FY26 is the Pune R&D and CCS project, established in 2026. The stated purpose is to build an assembly platform focused on PCBA and bus bar connector solutions for automotive and electrification-led applications. The logic is simple: SBCL wants to move beyond precision materials and components into integrated sub-assemblies used in EV battery systems, power distribution units, inverters, converters, and energy management applications. The company also points to proximity to the OEM ecosystem as a reason for Pune, which can shorten qualification and iteration cycles.

Geographic expansion also shows up in the formation of Shivalik Bimetals Europe SRL in Italy as a wholly owned subsidiary, designed to strengthen customer presence in European markets.

The company’s long-term demand thesis is built around electrification and grid investment. It cites EV adoption tailwinds via US IRA subsidies and EU Fit-for-55, India’s smart meter rollout under the Smart Metering National Programme, energy storage requirements for low-ohmic current sensors, and increased data centre power infrastructure demand. In that framework, SBCL’s shunts address current sensing needs in EVs, smart meters, ESS packs, and industrial drives, while bimetals address thermal protection needs in switchgear and other electrical equipment.

Takeaways for investors: margin delivery, integration execution, and cash discipline

SBCL’s FY26 print is most notable for margin improvement and earnings growth, especially at the consolidated level. Consolidated EBITDA margin expanded to 22.90 percent and PAT margin to 16.79 percent, while standalone gross margin reached 49.39 percent. That suggests the company is managing mix and costs effectively even as demand shifts by region.

The segment data shows a business that is still anchored in two franchises of roughly equal size, shunts and bimetals, with electrical contacts providing a meaningful third leg. Shunts are also becoming a larger share of value in the quarterly mix, supported by domestic demand, while Europe is emerging as a stronger growth region as the Americas soften.

The strategic direction is also consistent across slides. The company is investing in forward integration through bus bar and PCBA assemblies, anchored by the Pune facility, while maintaining a core technology moat around EBW and diffusion bonding. That is the right pairing if SBCL wants to increase share of wallet with OEMs and Tier-1 customers.

The main tension in the FY26 picture is working capital. Net working capital days rose to 258, driven by higher inventory and slower collections, while payable days fell. SBCL still reports a net cash position at the consolidated level, but maintaining cash conversion will matter as it scales assemblies and serves a wider export footprint.

Overall, the FY26 message is disciplined execution with a clear next step. SBCL improved profitability, grew consolidated revenue at a double-digit rate, and reinforced its positioning as a precision components supplier to electrification and grid themes. The next year’s narrative will likely be judged on two things: how quickly the Pune platform translates into repeatable assembly revenue, and whether working capital normalises while growth continues.