Sona Comstar Q4 FY26: Record Quarter, Softer Margins, and a Broader Growth Engine

Sona Comstar closed Q4 FY26 with its strongest quarterly operating print on record. Revenue rose to INR 1,272.3 crore, up 47% year on year. EBITDA grew 32% to INR 310.6 crore, while PAT increased 17% to INR 191.9 crore. The quarter was also the company’s highest ever on BEV revenue and BEV revenue mix, with BEV revenue of INR 358.8 crore and BEV share at 39% of automotive product revenue.

But the quarter also underlined a key theme running through FY26: growth is broadening across products and geographies, while margins face pressure from mix and inflation. EBITDA margin in Q4 FY26 fell to 24.4% versus 27.1% in Q4 FY25, and management pointed to a base effect from PLI income in the prior year plus an additional hit from product mix and commodity inflation.

Q4 FY26: Strong top line, margin pressure explained

The company attributed Q4’s 47% revenue growth to a sharp improvement in business momentum after a weak start to the year. Management called out inflation across steel, aluminium and copper, along with higher freight, packaging and energy costs. While much of this is pass-through, management said some costs are not passed through and there is typically a lag, creating a near-term drag on margins.

On profitability, the management commentary split the Q4 margin decline into two parts. First, Q4 FY25 EBITDA included full-year PLI income, creating a base effect of about 1.9 percentage points. The remaining impact of roughly 0.8 percentage points was attributed to mix and commodity inflation.

PAT margin fell more sharply to 14.7% in Q4 FY26 versus 18.8% in Q4 FY25. Management explained that beyond the lower EBITDA margin, net finance income declined as cash was deployed into the railway business during the year.

FY26: Growth continues, mix shifts, and BEV shows a Q4 rebound

For FY26, revenue grew 26% to INR 4,475.1 crore. EBITDA increased 13% to INR 1,106.9 crore, with EBITDA margin at 24.7% versus 27.4% in FY25. Reported PAT for FY26 was INR 640.2 crore, while adjusted PAT was INR 670.3 crore after adjusting for a one-time impact of INR 30.1 crore due to the new labour code.

A key point in FY26 was BEV performance. Full-year BEV revenue declined 6% year on year to INR 1,154.2 crore, and BEV share in automotive product revenue reduced to 35% from 36% in FY25. Management said the decline was driven by an extremely weak Q1, while Q4 showed a clear recovery with record BEV revenue and mix.

The company also highlighted a large order book as an anchor for future growth. Net order book was disclosed at INR 237 billion at the end of FY26, stated as 5.3x FY26 revenue, with 70% from EV programs, 24% from non-EV, and 5% from railway.

Diversification in action: geography, products, and non-automotive

The FY26 mix shift was sharp. India became the largest geography, rising to 51% of revenue from 29% in FY25. North America fell to 27% from 41%, and Europe reduced to 17% from 24%. Management described this as evidence that geographic diversification is helping absorb weakness in one market.

Product diversification is also becoming more visible in the company’s disclosures. In FY26, the revenue contribution by product was shown as: differential gears 22%, differential assemblies 17%, micro or plug-in hybrid starter motors 16%, traction and suspension motors 11%, railway brake systems 10%, railway suspension and coupler 4%, sensors and software 2%, and others 11%.

The order win commentary also reflected diversification across powertrains. In Q4 FY26, the company reported three EV and one hybrid driveline program wins, including European OEM wins with SOP timelines starting in FY28 and FY29.

Railway: expanding beyond brakes into electronics and comfort systems

Railways is now a meaningful part of the reported mix, with railway brake systems at 10% and railway suspension and couplers at 4% of FY26 revenue mix in the product table. Management also highlighted R and D progress in the railway segment.

In the earnings call, the company stated it received approvals to supply two new railway products in Q4: electric panels and HVAC systems. It supplied the first batch of electric panels for locomotive applications and planned to start supplying HVAC systems in the next quarter.

In Q&A, management sized the market opportunity at about INR 2,000 to 2,500 crore for HVAC and about INR 1,500 crore for electric panels. It also cautioned that timelines are long due to approvals and field trials, estimating 12 to 15 months to cover electric panels across rolling stock, and at least three years for HVAC.

Cash flows and capital allocation signals

For FY26, free cash flow from operations was disclosed at INR 290.0 crore. Net cash flow from operations was INR 659.1 crore, capex was INR 369.1 crore, and the company reported large outflows under other cash movements driven by dividend payment, railway and NOVELIC investments, and land purchase.

The year closed with cash, fixed deposits and mutual funds of INR 1,269.0 crore. Management described this as the strongest balance sheet the company has had, giving it optionality to invest.

Takeaways

Sona Comstar’s Q4 FY26 delivered record revenue and profits, supported by a broadening product base and stronger traction in India. At the same time, the company is navigating a margin reset driven by mix shift, inflation and lower net finance income as cash is deployed into new businesses.

The data points to a company that is building multiple growth engines: a large EV-heavy order book, higher share of India, rapidly scaling motors, and an expanding railway portfolio that is moving beyond safety-critical products into electronics and passenger comfort systems. The near-term investor debate is likely to remain centered on margin stability within the 23% to 25% band that management cited post railway acquisition, while tracking how quickly newer verticals turn into scaled revenue streams.