Sharda Motor Industries Limited — Investor Meet, 12-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

1. **Financial Performance:** Sharda Motor Industries reported consolidated revenue of ₹690 crores for Q3 FY25, with a gross profit of ₹181 crores, showing a 5% increase year-over-year. The company's EBITDA was ₹95 crores, resulting in an EBITDA margin of 13.7%. Profit before tax (PBT) stood at ₹101 crores, and profit after tax (PAT) was ₹75 crores. For the nine-month period, total revenue reached ₹2,087 crores, with PBT at ₹309 crores and PAT at ₹231 crores, indicating a positive trajectory in profitability.

2. **Future Outlook and Growth Drivers:** Management highlighted upcoming growth opportunities, particularly in the lightweighting segment, with a new order for suspension control arms set to generate USD 4 million annually. Plans for new product launches and market expansion aim to capitalize on increasing demand driven by regulatory changes and strong sector performance.

3. **Order Book and Operational Updates:** Sharda secured a significant order related to lightweight vehicle verticals, marking a potential lifetime business of USD 22 million. Additionally, a new plant in Pune is anticipated to enhance capacity and contribute to revenue beginning in Q3 FY26.

4. **Analyst Q&A Insights:**

- **Revenue and Profitability:** Analysts inquired about growth strategies; management indicated expectations for outpacing industry growth driven by new orders and product launches.

- **Market Position and Competitive Landscape:** The firm is gaining market share through enhanced R&D and leveraging past expertise.

- **Operational Challenges or Risks:** Although industrial activity is subdued, management expressed confidence in managing risks related to supply chains and changing demand.

- **Capex and Capital Allocation:** The company plans to maintain a consistent capex run rate of ₹50-60 crores annually while prioritizing M&A opportunities to augment growth.

- **Strategic Priorities and Long-Term Vision:** Focus on expanding international presence and product diversification, emphasizing the potential for significant revenue growth in new verticals.

5. **Market or Regulatory Updates:** The management discussed expected regulatory shifts, particularly the rollout of TREM-V norms in April 2026, which could boost revenue as firms localize emissions solutions.

6. **Strategic Focus Areas:** There’s a clear focus on innovation and expanding lightweighting capabilities, aimed at improving product offerings and market share within the automotive sector.

7. **Investor Insight:** Given the robust financial health, promising growth potential from new contracts and product innovations, and a strategic pivot to address evolving market demands, the outlook suggests an inclination towards a ‘buy’ position. However, investors should monitor the execution of growth initiatives and potential regulatory impacts closely.