Sandhar Technologies Limited (NSE: SANDHAR) Q4 2025 Earnings Call dated May. 23, 2025
Corporate Participants:
Jayant Davar — Chairman, Managing Director & Chief Executive Officer
Yashpal Jain — Chief Financial Officer & Company Secretary
Analysts:
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Q4 and FY ’25 Sundar Technologies Limited’s Earnings Conference Call, hosted by Emkay Global Financial Services Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Chirag Jain from Emkay Global Financial Services Limited. Thank you, and over to you, sir.
Unidentified Participant
Thank you,. Good morning, everyone. On behalf of Emkay Global Financial Services, I would like to welcome you all to the Q4 and FY ’25 earnings conference call of Sundar
Unidentified Participant
Technologies Limited. Today, we have with us from the management team, Mr Jain Dawar, Chairman, Managing Director and CEO; and Mr Yashpal Jain, Chief Financial Officer and Company Secretary. We will begin the call with opening comments from the management team, followed by Q&A session. Over to you, sir.
Jayant Davar — Chairman, Managing Director & Chief Executive Officer
Thank you. All right. Good morning, ladies and gentlemen. Let me welcome you all to the quarter-four and 12 months earnings call — con-call of Sandhar Technologies Limited. I want to thank Emkay Global for putting this together. On the call with me from our company is my colleague, Mr Yashmal Jain, who is the CFO.
To begin the call, let me talk about how the world is for us for our sector, you are aware of the geopolitical situations and what kind of challenges they are bringing to the world. The automotive world on a global level is surely facing headwinds and with a lot of uncertainty because of the tariffs and so on and so forth, as well as insecurity on the part of a lot of the population there has been a little bit of a drag on the auto sector and I do believe that both the United States and the EU will continue to have some turbulence in not just this year, but in the continuing years as well.
You have seen marquee brands like Tesla and all also face challenges in the sales and also so the quick ramp-up of several competitors who entered the field of non-IC engines to bring up competition. So where India is concerned, I do believe that India is comparatively stable and we are seeing a decent demand and we do expect that the industry, as most are saying, will continue to grow in high-single-digits even in this year.
As per Sandhar is concerned, Sandhar, under the circumstances of what I have mentioned above are has continued to perform well and we have achieved a total income growth of 11% compared to quarter-four 2024 and 10% compared to full-year of financial year 2024 at a consolidated level.
We anticipate sustaining this growth momentum, of course, is this subject to geopolitical conditions, market demand, the performance of the auto sector and other-related factors. The India business for us has achieved a growth of 13% compared to quarter-four of financial year ’24 and 13% growth according to the full-year of financial year 2024.
The consolidated EBITDA grew by 9% to — in-quarter four to INR109 crores versus INR100 crores and grew by 14% year-on-year in financial year 2024 to get to INR400 crores of EBITDA in ’25 versus INR355 — INR351 in financial year ’24. The EBITDA for India business grew by 12% in-quarter four ’25, which is INR97 crores versus INR86 crores and grew by 21% in ’24 ’25, which is INR357 crores in ’25 versus INR295 crores in 2024.
I am also very pleased to share that all our joint-ventures are experiencing strong growth and consistently improving performance. Further, pleased to share that all our joint-ventures are PAT positive in-quarter four and for the full-year financial year 2025. The success is driven by focused cost-control, localization efforts, enhanced business synergies. We remain confident that this growth trajectory will continue and grow. Collectively, our joint-ventures have recorded a total income of INR303 crores with an average EBITDA close to 13%.
We are also thrilled to announce that Sandhar Askas Private Limited, our wholly-owned subsidiary, has successfully acquired the high-pressure and low-pressure aluminum die-casting business of Sundram Clayton Limited at their Hosud plant for a total consideration of INR163 crores.
This strategic acquisition marks a significant milestone in our growth journey, allowing us to diversify our operations and enhance our manufacturing capabilities. By integrating Sundaram Clayton’s legacy with our expertise, we are poised to drive innovation and expand our product portfolio, tapping into the new markets.
We took over and took over the operations on April 2025. Well, for us, the key benefits of this acquisition include entry into the low-pressure diecasting market, enhanced production capacity with higher tonnage machines, broadened product offering, including essential components for automotive and industrial applications.
We are excited to welcome the talented team from Sundram and look-forward to achieving new heights together. On the overseas business, the performance of the overseas business has been a drag for us in-quarter four as well as for the full-year of operations and the sustained losses marked by low demand and slowdown in Europe.
We are closely watching the situation over there. And as the preliminary indicators, the volumes should increase in financial year 2026, not so much from the growth in Europe, but from the addition in the wallet share of the components that we have. The company’s expansion projects in Puna for cabins and fabrication and diecasted are expected to commence commercial production by the end of March 2025, should start to happen now.
Our EV business has started commercial production of battery charges and is getting a very positive response from the market. The customer-base is gradually increasing with more-and-more customers added. With that, I will conclude my opening remarks and in fact, I should also mention here that that’s a question that we’ve been having from all of you for a long-time is the smart loss.
You’d be happy to know that Sandhar Technologies received the EV best part development award from Suzuki Motorcycle during their annual supplier meet. Now this particular product-line is ramping-up and we do expect a gradual but sure footed it growth in this particular year. On the CSR front, we’ve dedicated ourselves to sustainable business practices that address economic environments and social challenges.
Our efforts go beyond just business concerns. We want to create a positive impact on the communities that we serve. So we are focused on diversity and equal opportunities. As we go-forward, our focus areas working towards ESG and STGs, diversification of product portfolio, expanding customer-base and increasing content per vehicle, which we’ve been doing, improvement on ROCE and ROI, consolidation of operations and generation of more free-cash flows and deleveraging of our balance sheet.
Those are the agenda items and KRAs for us that we must continue to improve and achieve as we go-forward. With that, thank you all once again. We are open to questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handsets while asking a question.
Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Tushar Gupta from Sagoon Capital. Please go-ahead.
Unidentified Participant
Hello, sir. Am I audible? Hello.
Jayant Davar
Yes, you’re audible. Go-ahead.
Operator
You are audible.
Unidentified Participant
Thank you for the opportunity and congratulations for good set of numbers. Sir, I want to know about what are the capex plan for the financial year 2026 and what is the market for EV charger? How much we can expect a revenue from this segment?
Yashpal Jain
So the capex plans for ’25, ’26, largely like we have a capex policy in case like that it is equal to a depreciation at the group level. So from the normal, the maintenance capex and the growth capex, we are expecting around close to INR180 crore to INR200 crores in this financial year, ’25, ’26.
Unidentified Participant
Okay. And sir, how much large this EVs charger and controller market can be and how much revenue we can expect from this segment?
Jayant Davar
Yeah., to just give you this, we have a three-year plan for the EV business. This will be the first full-year of operations where we have targeted numbers which are comparatively smaller in the range of between INR10 crore to INR15 crores, but it’s ramping-up very quickly to INR100 crore level within the next three years.
Unidentified Participant
Sir, one more thing. What is — like we have acquired a Sundram diecasting unit. So how much we can expect from that revenue potential and all?
Jayant Davar
Yes, Paji, you want to give the numbers?
Yashpal Jain
Yeah, yeah, sure. So like, we have acquired the ongoing business on a salam sale basis. And this year, we are expecting a revenue of around INR400 to in-between INR425 crores, sir. This is the revenue expectation from that business and it is again subject to the demands in Indian market as well as the overseas market to — because it’s value dependent on the customer should do is also.
But we are expecting this revenue to range between INR400 crore INR100 crore INR425 crores. And it has, I would say, potential to grow further. But yes, that has to be seen in the coming years, sir. And ideally, we maintain an asset turn ratio of 2.5 to 3 times in long-run, so we would like to achieve it going-forward in the next two to two, three years of time.
Unidentified Participant
Okay, sir. Sir, one more thing. Like as we see in Q4, we have increased our margin — EBITDA margin. So it can be going-forward or it can stable, it will be stable. Please highlight, yeah.
Yashpal Jain
Yeah. So in last two to three years in the calls, we have been emphasizing that we are not, I mean task of improving our EBITDA margins also as well as the earnings before-tax also, including the ROCE. So you can expect another improvement of 30 to 40 point basis in this FY ’25, ’26.
But I think that is the upper level that our component industry can achieve given the market situation, sir. So 30% to 40%, we are expecting a healthy improvement in EBITDA in FY ’25, ’26, sir.
Unidentified Participant
Okay, sure. Thank you.
Operator
Thank you. Before we take the next question, we would like to remind the participants to press star and one to ask a question. The next question is from the line of Saket Kapoor from Kapoor &co. Please go-ahead.
Unidentified Participant
Namaska, sir, and thank you for the opportunity. Sir, just to reiterate of what you mentioned in terms of the EBITDA margin trajectory. Can you specify what — I missed your number, number for — you mentioned the 30 40 percentage.
Jayant Davar
So can you come again?
Unidentified Participant
No, yeah. We expect improvement of 30 bps to 40 bps, means 0.3% to 0.4% in EBITDA margin FY ’25-’26. But again, that is dependent, as you know, on the industry challenges also in the demand pattern also.
Correct, sir. And sir, terms in terms of the unit acquisition sir, what have been the current metrics for the unit in terms of the revenue and the profitability?
Jayant Davar
Yeah. So like as we mentioned in the filings, currently the unit was operating close to a revenue of INR390 crores, something or I think INR376 crores because it keeps on fluctuating, but for this financial year ’25, ’26, we are expecting a revenue fall of around INR400 crores in-between INR425 crores.
The reason is that we have started the operations in their premaces, but during the intermittent period during the financial year, we will be shifting the entire operations to our own premises. So there’s the reason considering all those factors and little bit disruptions, we expect our revenue to between INR400 crores to INR425 crores.
But in long-term, as you know, we keep our financial metrics that any business should deliver an asset turn of two to three times — 2.5 to 3 times largely. So in next two to three years, we would like to scale-up to those levels.
Unidentified Participant
Okay. And what are the current margins and the profitability for the unit, if you could mention here.
Jayant Davar
So largely it is with the diecasting like single hired is it or at the most 9.5% to 10% is the — I mean in the ADC segment, 9% to 10% is a healthy margin if one can achieve. So I don’t think any thing could be changed. That could continue.
Unidentified Participant
I think, sir, you continue?
Jayant Davar
No, no, that’s what I was saying because we are not seeking to expand on a larger capex base. That is the reason we are more focusing on improving the return on capital employed once the investments are through. So largely EBITDA change between 9% to 10% ADC, that is also a very good EBITDA margin one should say.
Unidentified Participant
And sir, even we have disposal of one of the unit correct me there. So if you could just explain the rationale for that we did 10 one of our unit during that during this period only.
Jayant Davar
Yeah. So you are referring to one of the residential lands or the exit of joint-venture. Can you elaborate further?
Unidentified Participant
Joint-venture and yes, sir, I’m referring to the joint-venture?
Jayant Davar
Yeah. So there was one of our old joint-ventures, Sundhar. So the expectation with which we formed this joint-venture with our Korean partners and the level of activities are not up to the mark and we are reviewing our JVs also in the sense that we want to scale-up the business and the genium has been, I would say, financially and operationally not performing well in last five to six years.
So there was serious within the organization also. Management was of the view that the long-term objectives of our organization as a Sandhar might not be fulfilled while continuing the joint-venture. So we plan to exit the joint-venture now.
Unidentified Participant
And sir, when we look at the consol numbers, although there is a significant increase in terms of the revenue profile, but the margins and the contribution to the profitability is flat as you have already alluded in your opening remarks. So if you could just give us some more understanding on how at a consolidated level, especially the margins are going to shape up.
I just wanted to highlight a point that on a revenue top-line of INR1,014 crores, we post PBT of INR50 crores for the consolidation, whereas in the standalone on the revenue, I think it’s INR700, Mr second, sir. On a top-line of INR758, their profitability is INR50 crores.
Yashpal Jain
So the PBT number moves up on by INR5 crores on an increase in the top-line by INR22, INR50 crore or INR240 crores. So if you could just explain the dilution of margins when we go on consolidation and what steps because in your opening remarks, you did mention that our target are to improve the margins at both the standalone and the levels and all steps are being in the to achieve that.
So if you could just throw some more light on the.
Unidentified Participant
Yes, sure. So basically in the opening remarks, if you remember or MD has also mentioned that the European business has been a big drag for us during the financial year ’24, ’25. So if we compare the growth between the Indian subsidiaries and the foreign subsidiaries, the Indian subsidies have outperformed.
Basically, we have large subsidiary Sandhar Engineering, which is into the sheet metal business. And for the last three years, I mean, we have set-up three manufacturing greenfield projects in the same. Now all those have started — I mean, the revenues started flowing in I would say the right direction and the business has ramped-up.
Yashpal Jain
The major drag has come from the European business, sir. So we have sustained our annual loss of close to INR21 crores in the European business, sir. Otherwise, rest all other joint — these Indian subsidiaries, they are performing very well. They have already crossed the breakeven levels and in the coming — I mean, this financial year ’25, ’26, they will be posting healthy margins also.
As far as European subsidiaries are concerned, we are reworking out our strategy over there because as you know, the demand is sluggish in the overseas market, whether it’s the US or the European markets and there is a lot of confusion is also prevailing with respect to tariffs and how the business deals will be happening between Europe and America Asian countries, right?
So in a bid to revise our operations, we are taking some strategic calls and we are expecting that FY ’26 — ’25, ’26, we would not be facing this much of losses in the overseas business and our first task is to ramp-up the operations over there and to cut-down the losses in overseas business.
So this is how the strategy is there. Otherwise the Indian subsidiaries they are performing very well now and they will continue to perform.
Unidentified Participant
Last point and I joined the queue. Third, firstly, in terms of, I think closing capital work-in progress balance at the standalone and the consol level. So what are the new capacities that will get commissioned during the year? And also on a conservative outlook also on a top-line of, say, INR3,900 crores, which we posted last year what should be the stable rate of growth in the top-line? You did add to what margins would look like the trajectory.
So what should be the top-line trajectory, sir, which we may guide through for this current financial year.
Jayant Davar
So the capital work-in progress largely is INR113 crores is on account of the advance that we paid to Sundab as a part of us tranche of payment as per the business transfer agreement. So INR113 crores is comprised of that, which we have already discussed that business will be generating a revenue of INR400 crore to INR425 Crores because we bought this business for INR163crores and INR113 was paid prior to 28th of March and remaining was INR50 crores for discharge prior to 11th of April. So this is how the major CVIP is being routed. Remaining CVIP is on account of the other two, I would say, the Pune projects of CFD and aluminum die-casting, which MD sir has also mentioned, now they have — I mean the commissioning has been done and the commercial production will start within this quarter. So they will be adding up, but in the first year, you know the ADC and the scabbins and fabrication being a heavy industry, it takes two to three years to ramp-up the production. So there would be addition to the revenue, but that would be close to around INR4050 crores in this first year. As far as the top-line projections are concerned, auto industry as and other agencies have issued the report would be a high single-digit growth only. But we expect that we might be lending a growth of not lesser than what we have done in the last year, right? With the new business and plants adding up, I think we can land something around 14% 15% of the top-line growth in the coming with the sales stable-growth in the auto industry in India that we project up.
Unidentified Participant
Yeah. Thank you, sir. I’ll join the queue for my follow-up. Thank you.
Jayant Davar
Thank you.
Operator
Thank you. The next question is from the line of Resham Jain from DSP Asset Managers. Please go-ahead.
Unidentified Participant
Hi, good morning,. So just on the overseas piece, we have spoken about it, but given that it is taking slightly longer and obviously it can test anyone’s patients. But from the strategy perspective over the next two years, three years, what are the kind the kind of guardrails you’re keeping for that business because somehow the recovery is not coming there and the overall debt also is significantly higher.
The net-debt to EBITDA of the overseas business is also on a higher side. So how do you see the overall restructuring? What are the three, four important steps you are planning to take there to improve the overall profile of the business?,
Jayant Davar
Thank you for that question. I know it’s been a thorn in the side for a while now. But just to brief you on what we’ve been doing, what we’ve been doing is that we’ve been replacing higher-cost capital. We’ve added more businesses and more products in that particular business and the effects of that have already started to show.
So if you even look at the last quarter, the last quarter was much lesser losses compared to the previous quarter. And we do believe that with the improvement that is happening that started to happen in the last quarter, that improvement will continue and we will be able to mitigate the losses that we have.
On a long-term basis two, three-year basis, our capacities in Romania, which got delayed because of the war are now being utilized. Mexico had gone down on account of confusions with the US and other things are back-in operation. So from a perspective of regular operational strategy, we do believe that the losses that occurred will be mitigated to a large extent in the year ’25, ’26, where the future is concerned, you are aware that we have a lot of strategic advantages of having this business and this is the reason why we could manage to get the business in India and with now this new Sundran Clayton acquisition, we are amongst the top few players in the country from being nowhere at one point of time.
And this is on account of the specialized componentry that we do. So we are hopeful that strategic stay-in our Kitty has helped us and our job is to make sure that we not only mitigate the losses, but effect it into profits. You are aware that the EBITDA margins in our overseas business was actually higher than our India business and we are hopeful that beginning from the next quarter itself, you will see a huge amount of change coming in terms of positive directions. Yes,, you want to add something?
Yashpal Jain
As far as said, like we are expecting the business to revamp in the coming two to three years of time, we are in the process of preparing long-term plans. Also, if you remember like in India also two years back, we were struggling with the same margins, but we have taken many efforts and steps towards improving our margin base also and going with the LG product-line.
The same would be mapping to overseas operations also. And I think the FY ’25, ’26 won’t see the losses to quantum, which we have seen in FY ’24, ’25 and soon the operations will be back on the track.
Unidentified Participant
Okay. Thank you, sir. For giving that confidence. So that’s the first one. The second is on the overall revenue. We have touched almost INR3,900 crores this year. And given that you’ve acquired a new business plus several new wins, how do you see the overall revenue panning out for FY ’26 broad numbers?
Yashpal Jain
So like the industry, as we have seen the reports is a single large digit growth, right? But still we are expecting that 14% — 15% of some growth should come up in our revenues. That we will be working because the customer should keep on changing every quarter. So large depend on third and 4th-quarter. But still basis the stable-growth in the industry, we are expecting a healthy growth of 14% to 15% in the revenue, but our more focus would be on improving the margin base, sir.
So like more focus on the margin base or
Unidentified Participant
Sir, just to clarify, this 15% is without INR425 crores of Sundram, right?
Yashpal Jain
Yeah, you can expect that
Unidentified Participant
Okay. Understood. Okay. Thank you, sir, and all the best.
Yashpal Jain
Thank you.
Operator
Thank you. The next question is from the line of Priet from InCred AMC. Please go-ahead.
Unidentified Participant
Yeah. Thank you for the opportunity. I would like to ask about the debt level. In previous con-calls, you mentioned that you will be keeping your debt levels below INR700 crores. And now obviously for the acquisition purpose, you have to take the debt and the debt levels have gone beyond that. Do you have anything to peak that how much you can go or will you be further increasing that or it will be now staying constant at this level.
Jayant Davar
Like on March ’25 console level, we have a net-debt of INR740 crores, right, largely which includes a payment of INR130 crores — INR113 crore INR113 crores in the last week of the March to Sundram as I advance to the purchase consideration. So majority of the acquisition price we already factored in March ’25, another INR50 crores has been factored in April ’25.
And I think the debt level should not go beyond what we have seen the gross debt levels of INR850 crores in the month of March at one point of time because we will be generating EBITDA as I have told in the previous question-and-answer session that 30 to 40 bps we are expecting an improvement of EBITDA.
And this year we have closed at EBITDA of INR399.79 crores on around size, it is INR400 crores. So again, with a 15% around growth in turnover, we will be having the healthy inflows of cash from operations, which we would be using for our expansion needs and we won’t be relying on a higher debt levels for our organic — as far as organic expansion and organic operations are concerned.
If something inorganic comes up, then that would be again backed by the revenue of that business. So that I’m not factoring right now.
Unidentified Participant
Okay. Okay, got it. And one more question from my side. What would be your outlook means are you — what do you expect from the subsidiary business in the coming year? Will it be able to reach the breakeven? And if not, then in which year you expect the subsidiary to come back to the breakeven levels at least?
Jayant Davar
Okay. So Indian subsidiaries have already crossed the breakeven level because Sanar Engineering was a new subsidiary that we floated in ’21 — FY ’21, I mean ’21 ’22. So that has already crossed the breakeven. It was a sheet metal, three units were installed in the company.
As far as overseas is concerned, as we have discussed, I mean, just before this call is also, we are working on improving the operational efficiencies and the margin base over — in overseas. And I think this year-by the end of this year, we should be very near to the breakeven in overseas business.
Unidentified Participant
Okay. Okay. And how much do you expect from JV, similar profit levels, which we have seen in FY ’25 or it will be improving further.
Jayant Davar
So largely the JVs, the operations have stabilized because initially most of JVs were formed during COVID, that’s, that’s the reason they were reeling under the business losses and other factors. But now they have ramped-up and as Sarash told in the beginning also that localization has been focused in the JVs. So I think they should be able to maintain. But again, everything Remains on the customer side and also how the political conditions prevail across the globe. But there is no reason as of now that the JV should be going back to the losses.
Unidentified Participant
Okay. I’ll join back-in the queue. Thank you.
Jayant Davar
Sure. Thank you.
Operator
Thank you. The next question is from the line of Radha from B&K Securities. Please go-ahead.
Unidentified Participant
Hi, sir. Thank you for the opportunity and congratulations for. Sir, your capital employed in the consolidated business stands at INR2,000 crores if we exclude the INR130 crores of investment in. So this capital employed is including the working capital. So is it fair to assume that the company has invested out of this INR2,000 crores, INR6,600 crores is in the overseas business.
Jayant Davar
Rather the investment in overseas business, the capital employed is INR530 crores, 530 out of this INR2,000 odd crores of capital employed.
Unidentified Participant
Okay, sir. Thank you, sir. And are we investing any further in the overseas business in the next two years?
Jayant Davar
Well, that gradually we’ll see because if you remember in Romane, we were supposed to install 16 machines. We have done five machines as of now, but we are seeing how the business is ramping-up in overseas. Basis that we will take a call, but right now the priority is to breakeven the operations over there.
So right now, we don’t have any heavy capex plan in the overseas business.
Unidentified Participant
Okay. Secondly, the Sundaram floating overall working capital cycle is almost double of Sundai’s working capital cycle. So when we integrate this wholesal plant from next year, so will this working capital cycle continue that they have or do you think that it will be reduced to some high-level?
Jayant Davar
So this working capital cycle you are telling from Sundram versus their customers or how? Can you elaborate? [Ends Abruptly]