Sundram Fasteners ends FY26 with a strong March quarter and steady margins

Sundram Fasteners Limited closed FY26 with a steady topline and a stronger finish to the year. On a standalone basis, revenue rose to Rs 5,612.15 crores in FY26 from Rs 5,231 crores in FY25, a growth of about 7%. Profitability improved faster than revenue. Standalone EBITDA increased to Rs 968 crores in FY26 from Rs 864 crores in FY25, with EBITDA margin expanding from 16.5% to 17.2%. The March quarter stood out. Standalone Q4 revenue crossed Rs 1,500 crores for the first time at Rs 1,529.09 crores, while PBT reached Rs 231.86 crores and PAT rose to Rs 179.88 crores.

On a consolidated basis, FY26 revenue was Rs 6,368.25 crores versus Rs 5,984 crores in FY25, and PAT was Rs 592.85 crores versus Rs 542 crores. Q4 consolidated revenue rose to Rs 1,719.93 crores and PAT to Rs 161.36 crores.

Auto remains the anchor, non-auto continues to widen

The standalone revenue split shows the company still anchored to automotive, but with a visible and growing non-auto base. In FY26 standalone numbers, auto revenue was Rs 3,649 crores and non-auto was Rs 1,963 crores. Non-auto therefore formed about 35% of standalone revenue in FY26.

In management commentary, non-auto was discussed as a strategic focus area alongside the traditional automotive base. Management described non-auto participation across wind energy fasteners, aerospace fasteners, railways and defense-related applications. Importantly, management also indicated that non-auto business can carry slightly better economics than automotive, citing profitability that can be about 100 to 200 basis points higher and a shorter working capital cycle for domestic non-auto supplies.

Margin drivers: stable raw materials, tighter cost control, better mix

The March quarter improvement was explained largely through operating levers rather than one-off pricing. The CFO highlighted that raw material prices were broadly stable, although there was some inflation in nickel and aluminium after the West Asia conflict. The company also indicated it has contractual pass-through mechanisms for indexed raw material increases in many businesses, while in exports it is not always obligated to pass through changes, allowing it to benefit when market prices are benign.

Management also pointed to cost actions on power and fuel. It cited investments in renewable energy and judicious procurement through power exchanges when clearing prices were lower, helping rein in energy costs. Fixed costs were described as stable. The company also indicated that subcontracting expenses moved favourably due to product mix.

One accounting-related item discussed on the call was the reversal of an impairment provision, treated as an exceptional item, and a provision of about Rs 11 crores under the new Labour Code for gratuity liability for past service. Management also referenced mark-to-market provisions on some investments as markets fell.

Exports and EV: recovery signals, but still a watch item

Exports were described as a volatile part of the FY26 story. Management said exports moderated during the year, and the CFO explicitly referenced about 8% degrowth for FY26, despite rupee depreciation. Tariff-related disruption and geopolitical issues were cited as key reasons. However, Q4 returned to growth in both dollar and rupee terms, aided by rupee weakness and a better demand environment.

The marketing head provided colour on the North American commercial vehicle environment. He noted improving clarity on the EPA 27 norms for Class 8 trucks and stated that preliminary Class 8 orders for the first quarter were almost double year-on-year. The company expects the Class 8 segment to perform 10% to 15% better than last year, with pre-buy behaviour beginning as compliance dates firm up.

At the same time, EV platforms were described as facing setbacks. Management stated that large customers had downsized EV projections and postponed programs, even though internal combustion engine demand appeared to be stabilising. On EV-related export programs, management said full ramp-up is expected by 27, while acknowledging it has not reached earlier envisaged potential.

Capex and capital allocation remain growth-oriented

The investor presentation disclosed capex of Rs 404.27 crores in FY26, incurred for capacity expansion of existing lines and new projects aimed at meeting demand in both auto and non-auto segments. On the concall, management added that Sundram Fasteners typically invests not less than Rs 300 crores year-on-year, with 25% to 30% allocated to replacement capex and the balance driven by customer requirements across plants.

On shareholder returns, the CFO reiterated a stated policy of distributing about 30% of profit after tax consistently.

Non-auto growth levers: railways, wind, aerospace and early-stage defense

Management discussion on non-auto included concrete revenue markers in some areas. On railways, the company said it has been supplying fasteners for railway applications through retail partners and is moving towards direct participation, subject to qualification and standards. It stated a current run-rate of about Rs 2 to 3 crores per month and a potential opportunity to reach about Rs 100 crores per annum, with ramp expected by Q3 or Q4.

Wind energy fasteners were described as being in an expansion phase. Management indicated a plan to scale monthly revenue from about Rs 30 to 35 crores to about Rs 50 crores per month. Aerospace fasteners were described as taking off, with investments aligned to growth alongside customers. Management specifically mentioned working with customers including General Electric and domestic players such as Hindustan Aeronautics and Skyroads.

Defense was described as nascent. The company said it is participating through start-up programs and is currently engaged in areas such as pumps and machine castings, with scope to expand into other verticals.

What to track next

FY26 was defined by steady revenue growth and a sharper improvement in profitability, with the March quarter delivering record quarterly PBT and PAT for the standalone business. The key variables for FY27, based on management commentary, are whether exports sustain their Q4 recovery, how quickly new non-auto initiatives scale, and how the company navigates raw material volatility in nickel and aluminium.

The company’s stated focus on disciplined capex, stable energy costs through renewable investments, and consistent shareholder return policy provides a framework for execution. But the pace of export recovery, especially amid shifting EV timelines and tariff regimes, remains a central monitorable for the year ahead.