Sansera Engineering Ltd (NSE: SANSERA) Q3 2026 Earnings Call dated Feb. 10, 2026
Corporate Participants:
B.R. Preetham — Executive Director & Group Chief Executive Officer
Vikas Goel — Chief Financial Officer
Hari Krishnan — Chief Executive Officer, Aerospace Defence & Semiconductor
Analysts:
Mukesh Saraf — Analyst
Arjun Khanna — Analyst
Siddhartha Bera — Analyst
Kashyap Javeri — Analyst
Yash Agarwal — Analyst
Divyansh Gupta — Analyst
Mumuksh Mandlesha — Analyst
Nikhil Rao — Analyst
Aashav Patel — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Sancera Engineering Limited Q3FY26 earnings conference call. 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. This conference may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call.
These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I would now like to hand the conference over to Mr. Br Pritam, the executive director and group CEO. Thank you. And over to you sir.
B.R. Preetham — Executive Director & Group Chief Executive Officer
Thank you. Good morning and welcome everyone. Sorry for making you to join so early in the day. Thanks for joining this call. On this call I am joined by our CFO Vikas, our CEO ADS Division Hari Hari Krishnan, Head of Corporate Strategy, Mr. Praveen Chauhan, our COO Rahul Kale and our Investor Relation Advisors sga. The results and the presentations were uploaded on the stock exchange and the company websites. I hope everybody has had a chance to look at them. I’m delighted to connect with you all from our newly inaugurated Pantanagar facility, A state of the art plant dedicated to serving domestic two wheeler OEMs.
We will be primarily producing crankshaft assemblies in this plant which would help in increasing our content per vehicle for the ICE segment and which is having a very good current demand in this segment. In the quarter gone by, Samsara reported its highest ever quarterly figures for sales of INR 9,077 million as well as EBITDA of INR 16,39 million. PAT after exceptional item of rupees 162 million pertaining to the revised Labor Code loss stood at INR 694 million. The performance reflects an improvement in EBITDA margins at 18.1% whereas PAT margin remained healthy at 7.6%. To highlight this momentum, let me outline a few revenue cuts that were achieved that we achieved our best ever quarterly performance milestones during this quarter.
Geographically, revenues from Europe grew by 27% year on year while the sales from our other foreign countries more than doubled on a small base together driving our best ever international sales for Sunsera segment wise ads revenue stood more than 4x on a year on year basis and more than 2x on a quarter on quarter basis. This is in line with our expectations and guidance and sets a new benchmark for us in the non automotive performance following the interim US India Trade deal and EU fta, we expect a positive impact on both current exports and new opportunities.
From a domestic market perspective, the post GST momentum in the auto segment remains strong domestic driven by new model launches. This is reflected in the solid auto sales figures for the month of January as well reported by the OEMs. Production schedules for us for the coming months indicate sustained robust trends. Further, we see long term benefits in semicon space with government upcoming launch of India’s Semiconductor Mission 2.0 which is aimed at supporting equipment and material manufacturing, develop full stack Indian IP and strengthening supply chains and we are strongly present in the equipment space in this segment zooming our performance for the quarter seasonally.
This is a weak quarter for the auto segment due to annual maintenance related shutdown and model change. Yearly model change. However on a year on strong growth of 13% in the auto I space led by PVs, HCVs and motorcycle components. At the same time Auto Tech Agnostic and XEV recorded about 26% year on year growth for the non auto business, revenues more than doubled during this quarter. As of December 2025 our peak annual revenues for new business stood at INR 24.1 billion. If we look at the cumulative unexecuted lifetime order book of backlog till FY30 specifically for the ads business it stood at INR 38.7 billion.
As we look forward from here our pipeline remains robust and the outlook along with the market backdrop and the client sentiment continues to be upbeat. Based on our current order execution and customer schedules, we remain confident that we will close the year with teens to mid teens top line growth while comfortably maintaining our current margin profile. With our 9 month ads revenue crossing Rs 2150 million, we are on track with respect to ads our ads target for the FY26. Lastly as we mentioned in our previous earning calls that we are also exploring new geographies in east of Asia especially Japan to engage with a new set of customers primarily in the auto space.
Towards this we have recently signed a joint venture agreement with Nichida Corporation of Japan. Our JV partners expertise in manufacturing of tools, dies and precision components in cold and warm forged categories and these are manufactured across operations in Japan and Thailand with the range of tech agnostic components. Under this JV we will be we are well aligned with our diversification strategy. Transera will be investing rupees 500 million towards this JV for a stake of 60% over couple of years with this, I would like to hand over the call to our CFO, Mr. Vikas Goel.
Vikas Goel — Chief Financial Officer
Thank you, Pritam. Good morning everyone. Let me take you through our consolidated financial performance for the third quarter FY26. Our revenue from operations increased by 25% on a year on year basis and stood at INR 9,077 million marking it the highest by the company. Due to a positive product shift. We have witnessed margin expansion during this quarter leading to a 60 basis points increase in the operating margins. This is after making provision for the development cost which is a one time expense of about 100 million. During this quarter. EBITDA for the quarter stood at INR16.39 million with a margin of 18.1% as against 17.5% in Q3 FY25.
Our employee expenses were INR1213 million and other expenses amounted to INR798 million recording a year on year growth of 9% and 18% respectively which reflects healthy operating leverage on this new scale. Finance cost for the quarter stood at INR 79 billion which is significantly lower owing to the reduction of debt that we have done over last one year. We recorded a one time impact of Revised Labor Code as an exceptional item amounting to rupees 162 million. For the quarter, profit after tax stood at rupees 694 million with an increase of 24.2% on a year on year basis at a margin of 7.6%.
This is after a one time exceptional cost pertaining to revised labor code amounting to rupees 162 million. Excluding this, our PAT number stood at 857 million with a year on year growth of 53%. Coming to the nine month performance, we reported revenue from operations of INR 24,992 million year increase of 12% from INR 22,351 million. EBITDA for the period stood at INR 4,391 million reflecting a year on year growth of 13% with a marginal improvement in margins compared to last year. Profit after tax for the period was INR 2038 million registering a strong 29% year on year growth increase with margin expanding from 7.1% in last year to 8.2% in the third quarter of this year.
With this we conclude our opening remarks and open the floor for questions and comments. Thank you.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. If anyone wishes to ask a question, you may press Star and one on their touchstone Telephone. If you wish to remove yourself from the question queue, you may press star. And two participants are requested to use handsets. While asking a question. Participants are also requested to restrict themselves to two questions. If you have any more questions, you may be requested to rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Mukesh Saraf from Avendus Park.
Please go ahead.
Mukesh Saraf
So, good morning. Thank you for the opportunity and congrats on a good set of numbers, especially the ADS division. My first question is on this new plant in Pantanal. Could you kind of give some more sense around this? Especially you’re talking about the content per vehicle increase. So we know that you know you’re quite strong in terms of wallet share on the connecting rod and the other parts. But is this. Or could you give some sense on how we are on wallet shares on crankshaft, crankshaft assemblies and, and hence how this new plant can kind of help us probably increase content or is it say a new customer? Some more sense around which will help.
B.R. Preetham
Yeah. Thanks Mukesh. Yeah. See we already have quite a big plant in Pantanagar which caters to primarily to the two wheeler sector where we have both machining and forging components. But as you are aware that Bangalore or Karnataka plants are almost full. Except that now we have bought a new place in Birdi. It will take some time for us to develop and all the growth now needs to be focused on this. So with that intent we have bought this second plant in Pantanagar which we bought it about a year back. So we had to do up the plant to bring it up to our required standards which we have done over last eight, nine months.
Now we have put up to begin with there are two manufacturing sheds here, approximately about 2 lakh square feet. One of them we have started activating it and then we have put up couple of crankshaft lines. And here the intent is that we are now going to build this with significantly high amount of automation with IoT and you know, all the data capturing and analytics and all these things. So the first two lines have been put and also this would be predominantly operated by women employees. As we speak today we are close to 60% of the employees who have been employed here are women.
But over the time we want to take it to 100%. This plant primarily is for focusing on our domestic two wheeler segment. So we will consolidate our operations here. So having said that, there is a lot of opportunity. Now we see where companies are Looking at more and more outsourcing, there are quite a few of leading two wheeler OEMs who still manufacture crankshaft assemblies in house. So I would say still more than 60% of Indian automotive two wheeler industry still manufactures these crankshaft SMDC knobs. There is an interest shown by all of them to gradually outsource these components.
So we also stand a good chance to participate in this drive. So keeping all this in view, so we have put up this place and we expect that over the next couple of years we should be fully utilizing this space.
Mukesh Saraf
Okay, great, that makes sense. Any number that you have in mind. So what kind of revenues say once the second shed also is operational, this plant can generate over say next three years or so?
B.R. Preetham
I think see potentially the kind of square foot that we have put, if it is fully occupied, this can actually generate close to about 500 crores per annum. I mean that depends again on what kind of product mix we are going to put and what kind of the thing. But that is, that is what is the intent
Mukesh Saraf
understood? And second question is on the tech agnostic and the Xev order book, it’s around that 400, 430 crore mark. Notice that this number has been around the same say over the last three, four years in terms of the outstanding order book there. While I know that this is going to get executed over the next three years, I mean the order book staying the same probably will result in the growth tapering of say second year, third year from now. So how are we looking at this order book? Is it largely export driven and hence now these trade deals can help in shoring up that order book there some.
Color there will help.
B.R. Preetham
Yeah, see there are two tech agnostic mainly pertains to the aluminum forging kind of components that we had taken. And we have taken a pause in taking the newer orders because we are also establishing our technology there and then we are also stabilizing what we are taking. We have taken a lot of components in the beginning of the year, so that is why you see that specifically it is an intended pause that we have taken on this segment. I hope by towards the end of this financial year our learnings would have got stabilized and we would really look at go approach our customers with all the learnings that we have had and start looking at more opportunities both in passenger vehicle and two wheeler space.
So you are right. When you have seen that last one, one and a half years we have not added too much of this is not that there is no interest, there is very clear decision that we had taken, which I had also communicated in my previous calls. As far as the XEV components are concerned, definitely there is a large scope going forward both in hybrid space. We are working with multiple, with our leading oem, Japanese OEM, who are the world leaders in this technology. We are there on Gen 4, Gen 4.5, Gen 5 programs. We are also looking at building the similar capabilities with another Japanese OEM and also leading North American oem.
So I see that over next couple of quarters or over next one year there’s a lot of order buildup can happen in this category. Apart from that we are also looking at through our jv we will now focus on more of driveline and steering kind of components which also is common between, which can be common between ICE and EV segments. So I see a lot of, at least in passenger vehicle kind of components, a lot of potential to expand in Xev. Of course two wheelers depends on we are already there with all the major players and then it also depends on how well the market expands in the XEV segment.
Mukesh Saraf
Got it. Great sir, all the very best. I get back in the queue. Thanks.
B.R. Preetham
Thank you.
operator
Thank you. The next question comes from the line of Arjun Ghanna from Kotak Mutual Fund. Please go ahead.
Arjun Khanna
Congratulations to the entire team for a great set of numbers. Sir, my first question is on the expansion of CapEx. We were planning a plant maybe in the US based on post tariff negotiations. Given that there is some clarity at this point in time, could you call out what kind of CAPEX we envisage for us Unit?
B.R. Preetham
Hi Arjun, how are you? So thanks again. Yeah, I mean Arjun, I think while the news has come and it’s very positive, we expect that there will be momentum and traction that will build up in the decision making process because while there were a lot of discussions that was happening, the decision making was not happening. So we expect that now while there are still, because we really don’t know yet whether our component falls under zero or under 18. I mean zero would really be huge potential. Of course 18 is also not bad. So I expect that, you know, towards the end of this month or maybe middle of this next month, we may, we may plan a visit to, you know, conclude what we are discussing with our customers and come up with that the numbers are quite huge in terms of what is the potential.
But I really can’t put a figure because I really don’t know whether it would be 3 million or 8 million or 10 million connecting loads. So depending upon what numbers comes out, only I can, we can really Put the figures. But you know, with a reduced tariff I would only constrain now would be the rvc. So we need to only look at that as to how the value, the residual value content. So that only would be the driving force in decision making for them. So that we’ll have to work it out around what final tariff will come and then see whether we qualify to the current 65% norms that are there.
And then later on be also ready that if it has to go up to 70 or 75 in coming years. So with that in mind we will distribute our value addition once the order gets finalized.
Arjun Khanna
Sure sir. Just a continuation in the second quarter call we had said that the tariffs were causing some pressure on sales offtake especially in US and European markets and also impacting margins in some cases. Given that we have had a successful third quarter, given that now at least the tariff rate seems to have come off. So should we expect a significantly stronger uplift in margins and exports to these regions in the latter half of fourth quarter or first quarter FY27
B.R. Preetham
except for. One or two customers, we have had a decent third quarter in exports as well. If you see we have had one of the better quarters this year. So that is already there. Of course there is some capacity utilization still we are not at our optimum capacity utilization. See all these things only makes sense beyond a certain capacity utilization. While my product margins may be very good to exports but if I am not using capacities at least up to 70% those get diluted. So I expect that going forward in the fourth quarter onwards, definitely there should be larger momentum leading to better offtake.
And having said that, one of our most premium customers who are the leading North American based EV manufacturer, we are down by 50% on last year’s numbers and down by almost 60% on our own projection. So I expect that once that also comes in place because we are also adding a lot of business from them including in energy sector and we are looking at participation even in the other upcoming sector. So that is the reason that we are also very optimistic on the coming quarters in terms of both sales and margins from exports on our components.
Arjun Khanna
Perfect sir. The second question is on the ads. So obviously I think we’ve been talking of 300 crores and we are on track of meeting or beating that guidance. So congratulations. We have also given a stiff target for FY27 given you’ve mentioned in the press released at the capex of maybe 250 crore rupees for further expansions post that we should probably be fully utilized by FY27. So when do we expect the new capacities to come in?
B.R. Preetham
Arjun, I’ll take this and then pass it on to Hari. Hari will expand on that. Yes, we have had a. So this year we had kept ourselves a target of between 275 and 300 and I hope that we should cross 300 comfortably this year. And in this first building we had also said that we can go up to between 600 and 650 crores of revenue annually which is what we are looking at for the next year. Between 550 to 600 is what we look at and then for which the entire facility is the thing. But we have also started construction.
Hari will take you through what we are looking at beyond 600 and what is the status of both our new plant as well as.
Hari Krishnan
Good morning, this is Hari here and you know, as we have been updating, you know the community, the current CapEx, what we have already committed and already installed is adequate for us to reach our FY27 numbers which as Prince just said is between 500. 550 to 600 is our expectation and guidance. And the construction of the new facility adjacent to the current one is underway. Construction is going on in full swing. We expect that to be ready by June, July of this year in another five to six months time. And that is about 80,000 square foot of manufacturing space.
And for the FY27 revenues what we are targeting. See we also have to look at this in conjunction with the lifetime order what we are holding currently which is about 3,800 crores to the FY30. So which means there is going to be a steep ramp in revenues going forward from FY28 to 30. So we are getting ready with a new facility. The equipment for that facility based on current order wins is already on order. So the facility should start getting operational with a substantial footprint no later than August, September of this year.
Arjun Khanna
Sure. And in terms of new order wins, if you could just give some color in terms of each of these segments. Have we had new clients and new order wins?
Hari Krishnan
Well, we’ve had new clients in the aerospace division on the semiconductor division while we have one very active client right now, a customer. Discussions are I would say progressing well with other players in this space. And the conversion in my opinion will happen pretty soon.
B.R. Preetham
Arjun, having said that this is the first year of execution for us in terms of semicon. So there has also been a lot of, you know, FAA is converted to production and the requirements are pretty stiff. So we are taking you know we are just now establishing ourselves. We really did not go because the facility was also full. We could not actually take it and not satisfy the customer. I think towards the second half we will focus more on marketing it properly and getting few more clients into the.
Hari Krishnan
Yeah and I would say what we look at it internally, yes it’s always important to have new clients but the existing customer is also looking at much, much bigger things from Sancera. So he’s going to definitely keep us busy for the next one year more the better. So if more discussions convert earlier we are ready resources wise to attend to them also.
B.R. Preetham
Yeah, and also with this, the second phase also we expect that in next one one and a half years we should be full with the second phase. So management actually have started. You know we have started looking at additional space for aerospace in either Aeropark 1 or 2 or the new STTR which has come for semiconductor where Foxconn and all the new facilities have come up in that region. So we are looking at some more because long term we would require some larger space for aerospace and defense given the way the order buildup and the interest shown from both aerospace because the last year has been quite the thing dominated by Semicon but aerospace also we see a lot stronger growth here.
Arjun Khanna
Sure. And the asset turn for this 250 crore should be 1.5x to 2x.
B.R. Preetham
No see the first portion of our investment which is like about 350 crores including, including the special process investment should give us about 600, 650 which is about 2. OK right. So but then going forward the incremental investment in the second phase of this building should give us about 3, 3x the thing. But then overall if you see it is better to take about 2x.
Arjun Khanna
Perfect. Thank you Pritam and Hari for patiently answering and wishing you all the best in the future.
B.R. Preetham
Thank you.
operator
The next question comes from the line of Siddharth Bera from Nomura Holdings. Please go ahead.
Siddhartha Bera
Yeah, thanks for the opportunity sir. Again congrats on a great set of numbers. Sir, first question is on this European US deal you talked about wood traction in the exports and potentially new opportunities as well. So can you just elaborate a bit on where do we see some of these areas given that exports currently, which I believe is mostly led by your aerospace and how do we look at other opportunities and segments like PV which has got impacted in the past.
B.R. Preetham
Yeah, I think Siddharth, thank you. So see there were we have seen significant increase in terms of the discussions, the RFQs, the interest everything was there. In the last six to nine months there have been both from US and from Europe. Automotive customers have engaged with us in various platforms of theirs in looking at larger programs in terms of what we want to do on the connecting rods especially. And we expect that with this, with this trade deal out of the way now for both Europe and this thing that the decision making will start happening.
So our expectation, see the biggest challenge for us when these things happen, it gets stacked up, I mean couple of big orders which means that we are talking about 3 to 4 million from each customers and then that has to end to end. Suncera is a fully integrated facility so we need to create end to end capacities. So we have already started looking at long term capex that needs to be done which is mainly on forging Pressy. We are currently manufacturing close to about 110 million components every year. And this requires a lot of planning and capacity in terms of Rahul and his team have been now working on for the next two years and beyond.
How do we have to add? So we have a lot of planning is going on in the forging capacity augmentation and the thing because that takes the longest lead time. I. I think that abito parti shuru. So I think we have a lot of, lot of traction and I think we are on a good, good space now.
Siddhartha Bera
On this. Vichidai Devi, can you talk about the potential? You see.
Hari Krishnan
Sorry, I’m sorry, you’re breaking. Can you come again please?
B.R. Preetham
Siddharth, we couldn’t hear you.
operator
Audible. Sorry to interrupt you but you’re still.
B.R. Preetham
We got the question. Yeah, it probably meant that what is the potential of Nichida and what kind of components. Hari will take that question.
Hari Krishnan
No, but I think I, I heard it differently. Sir, can you. Again sorry, can you repeat the question?
Siddhartha Bera
Yes sir. How do we look about the potential in the next few years on revenue side and is the margin better than our current business?
Hari Krishnan
Okay see we have got into this joint venture mainly to get into two areas of forging where our presence has been practically not, you know, non existent which is cold and warm forging. So cold and warm forging automatically mean high precision parts, near net shape parts. So the applications are, you know, varied, totally different segments. And in transmission we’re talking about differential driveline. So we also really, really expect and we are very confident the margin profile of the products, what we are targeting in the JV will be better. Will be better than what we currently have as a margin profile.
Siddhartha Bera
Got it sir. Thanks a lot. I’ll Come back in the queue.
Hari Krishnan
Thank you.
operator
Thank you. A reminder to all participants, please restrict yourselves to two questions. If you have any more questions you may be requested to rejoin the queue. Our next question comes from the line of Kashyap Javeri from MK Investment Managers. Please go ahead.
Kashyap Javeri
Thank you so much sir for the opportunity and congratulations for such great set of numbers. My compliments also to Vikashji and his team. The presentation this time gives disclosures which are probably at par or better than some of the best in the industry. So you know, congratulations on that. To Vikas ji. Also my question first is on the order flow. While in the earlier question you mentioned about the semicon part, if you can throw some light on the passenger vehicle order flow also I understand you give the numbers yearly but if any orders have now gone into production from the order book and what’s the kind of order flow there? Second question is on the ADS division now that forms 24% of our overall order book and in past we have seen that, you know, at times it can be significantly volatile also.
So what are we doing to sort of stabilize that volatility in that segment? Also a connected question there. Recently we heard about 82, 20 doors or door frames being supplied by one of the tier one suppliers and we were supposed to be part of that. Is that now already part of the revenue flow? Has that been part of the production schedule now?
B.R. Preetham
Yeah. Just your question of volatility was in aerospace, is it?
Kashyap Javeri
Yes.
B.R. Preetham
Okay, okay, so let me first come to our international order wins on passenger vehicles. We have been quite active as I said that last, except for, except for the ICE manufacturers where there was, there was a pause in decision making. But a lot of large potential opportunities are available. You would see in the next couple of quarters, provided the entire clarity on the FTA comes through you will see a lot of conversion of these opportunities into orders. But of course as we said that for all these things there has to be a backdrop by a US manufacturing facility.
So that would come. Meanwhile we’ve also been working with expanding our Xev plus non automotive segments. So we have now got an entry into energy with this, you know, you know, the largest EV producer of North America. They have also got energy segment they have got into and we have got a very good first big order from them amounting to about 70 crores per annum which we will be executing it starting from next financial year itself. We are also working on few other segments of connected. The thing could be on humanoids, could be on other autonomous cars and all that.
So that is something that we have focused upon which will also be part of both Sansara as well as our upcoming jv. Because some of these components would go into our JV segment in terms of aerospace.
Kashyap Javeri
But in PV ice, the order flow is still sort of modest. Right. I mean, is that
B.R. Preetham
what I said? That is because in terms of PVIs both in Europe and in US there has been a lot of discussion and interest, but the decisions have not happened because of the tariff issue that was there. I expect that in the next couple of quarters this would come through.
Kashyap Javeri
Understood. Yeah.
Kashyap Javeri
On the ads,
B.R. Preetham
volatility in the aerospace was mainly because of, you know, Boeing one incident, couple of incidents of Boeing that was not very. Because the. The regulator came heavily on them and there was a lot of inspection and checks before the dispatcher. So they went now. But they are now, I think as we understand they are almost normalized now. And there is a lot of demand and focus even on getting more and more supplies because not because of anything else, but because of availability of resources, specially trained manpower in India, where we also have challenges, but our challenges are probably much lesser compared to the other countries.
So that we don’t expect too much of volatility. In terms of what was the other.
Hari Krishnan
One is on the thing
Kashyap Javeri
A220.
Hari Krishnan
Yeah. On the volatility, I want to add a couple of points. Even today the two big aircraft manufacturers are booking orders more than what they’re delivering. The backlog is continuously increasing and they expect this trend to continue for the next long long time. I mean for years to come. So barring something very untoward like something which is very catastrophic, God forbid, nothing happens like that. I think there is no much of volatility we see in this industry at all. And the last question on the company in the news recently which delivered the first ship set of doors for the A220 aircraft.
We are very much present in that we had a large number of parts going into that first ship set. And also happy to inform you that our production has been ramped up and we are now aligning our production to meet the requirement of our customer.
Kashyap Javeri
Just to squeeze in one small question here on the JV, the size is about 200 crores market cap and about 600, 700 crores kind of revenue in the future. Can it be like a meaningful part of Sunsera as well as their own journey given their size is too small? Probably is just the tech which is probably useful to us.
Hari Krishnan
You just said it. It is the tech. It is not the size in fact they have a combination of high technology which we leverage into a low cost manufacturing country like India. And also important to note that for some very critical components they also have production lines established in their company as a backup to a few of the customers in Japan where they started developing and supplying the tooling. So it is a combination of tech and also high production volume ability for certain very key differentiating products.
B.R. Preetham
See Sansara has a very strong mass manufacturing capability and well established processor. So huge technology advantage. So we think that combining this we can address a very large section of non ice components which we were not there at all. So we really want to focus on this segment and take it. This opportunity can be as big as our current automotive businesses.
Hari Krishnan
The speed to market is going to be the differentiator and that’s where.
Kashyap Javeri
Hello.
B.R. Preetham
Yeah
Kashyap Javeri
sir, you were saying speed to. Market and then probably
Hari Krishnan
developing such critical.
Hari Krishnan
Components with new technology. The speed to market, especially considering somebody has the technology which is proven and they are a very very well known respected name in the country, you know, with relationships with all the major OEMs, think that’s going to be a very key differentiator.
Kashyap Javeri
Okay, thank you so much. And again hearty congratulations on great set of numbers.
B.R. Preetham
Thank you.
operator
Thank you. The next question comes from the line of Yash Agrawal from Nirmal Bank Securities. Please go ahead.
Yash Agarwal
Hi, good morning. Congratulations on the gate set of results. My first question is on gross margin. As you observed that the gross margin has declined 190 base buy on Y100 with Q& Q. Could you help us break down the key drivers of this contraction? And how could we think about margin trajectory in Q4, FY26 and FY27?
Vikas Goel
Thank you Yash for the question. As I explained during my opening remarks, so we had one exceptional or rather one time adjustment this quarter when we basically provided for a development cost of about 100 million rupees which is not in the ordinary course. But since we have been developing a lot of components of late, we made. This. Provision one time which is actually impacting the margin for this quarter and also on a year to date basis. So if you ignore that our margin are more or less in line, marginal variation we will always see because of the product mix changes. But on our overall trajectory gross margin we expect to be stable in this territory.
Yash Agarwal
Okay sir. And my second question is on sales mix trend. The share of other foreign countries in the revenue mix has increased in recent quarters. So could you elaborate which geographies are driving this growth and whether this can New customer win?
B.R. Preetham
No, this is basically because our other countries, the, the semiconductor deliveries primarily happen to Malaysia. So that is where you would see all the semiconductors getting loaded into the other countries. So that is why the significant increase has happened.
Yash Agarwal
Okay sir, thank you for my side Congregation for the Q4.
B.R. Preetham
Thank you. Yes.
operator
The next question comes from the line of Divyansh Gupta from latent pms. Please go ahead.
Divyansh Gupta
Hi sir, couple of questions on the aerospace and defense segment. I understand that aerospace is right now, let’s say not fully utilized but let’s say when we hit the revenue of 600 crores what would be the EBITDA margin for this business and similarly for defense and also what would be the working capital days requirement for this business? How does it differ from our current auto business?
B.R. Preetham
Yeah, I mean see as we said that the first building would be fully utilized next year but the second building would have started and we would have upfront invested. So there is always you know catching up on in terms of utilization that happens. But then a significant portion of our investment would start getting used in the next year. So we should see, you know we are definitely towards. We had said that aerospace would give us about 25 to 30% margins. We think that once we fully utilize this we would surpass that number of 30%. So it could be you know, very close to 30 or 30 plus.
Divyansh Gupta
Got it. And on the working capital, so the.
Hari Krishnan
Working capital ADS business is approximately twice. As high or in terms of number. Of days as against the automotive business. On an average we have about 80 days of working capital cycle in aerospace and defense. Sorry, ADS business we should be seeing about 170, 180 days.
Divyansh Gupta
Got it. Understood. And the second question was also on the ads. So from 600 to 3900 crores of business that we have in hand taking a two time over as you had mentioned. So it implies about 1600 crores of capex. That needs to be done. What would be the timeline of it? Because I’m guessing you will establish the facility then some testing and acceptance.
Hari Krishnan
It’s like, it’s like this now 3800crores is my order.
B.R. Preetham
Yeah. First is, it is not yearly 3800. It is a cumulative unexecuted order. 3800 for the till FY30.
Hari Krishnan
So, so I have to, I have. To execute 3800 crores of backlog orders in the next four years approximately. Okay, 27 cumulatively totally. So which means I expect, I expect in the last year FY30 to be around 1300, 1200, 1300. So today if I’m already have, I have a visibility for 600 revenue which I mentioned a little earlier. So my capex requirement for the differential 650700 would be assuming 1, 2, about 300 to 325 crores which I would do again in a phased manner year on year ending definitely by FY28 you know somewhere end of FY28 because I’ll have to start realizing it in FY30.
B.R. Preetham
Having said that this is the current position so any addition would attract additional. So we expect a lot of traction in ads and that is the reason that in my commentary I said that we are looking at an additional new space to look at some 10 or 15 acres of land in either phase one, phase two of Vero park or STTR which is very close to the Devnalli airport. So we don’t expect that this is to be stagnant. This is the current position of 3,000. We expect a lot of uplift in this order book also over the next couple of quarters and the next year.
Hari Krishnan
Yeah the sense that you know we, we are 100% looking at a new order wins in the next one year where we have to start execution before FY30. So this is only a situation as on date.
Divyansh Gupta
Understood. Thank you. All the best.
operator
Thank you. The next question comes from the line of Momox Mandalaysha from Anandrati institutional equities. Please go ahead.
Mumuksh Mandlesha
Yeah so congrats on the strong result and with over 80% margin and very good positive commentary across so many segments. So first I just want to understand. On the capex side what is a capex plan for this year and maybe for next year what are the plans? And and also sir I just want to understand if we go ahead for the U. S plan what kind of capex requirement would be required for that?
B.R. Preetham
We had given about while in the beginning of the year we had said that could be about 450 crore is our this year’s capex plan. We were willing to, I mean we were looking at anywhere between 350 to 375. That’s what more or less we will spend maybe towards closer, close towards 400 because we want to be aggressively now we have started putting up few more buildings especially one Ford shop in our existing facility in Pantanagar there is another building that we are starting in one of the Bangalore auto plants. So all these things would mean that you know we see a larger momentum.
So we are a growing company and we aspire to grow about 10% at least faster than the market growth. So which means that the capex would also be happening and this year if I say that between 375 and 400 a similar number could be for the next year as well.
Mumuksh Mandlesha
And so this would include the, the upcoming new EDS plant as well.
B.R. Preetham
EDS is part of our overall capex. This does not include anything currently on us Us as I said that it can only be, you know, visibility will only come once we have certain, certain orders confirmed and if customer wants us to put up facilities there, if they want us to do it from here, if the tariff is zero, we would also be very happy to do it from here.
Mumuksh Mandlesha
Got it, sir. So on the Sweden side, how was the performance this quarter and how that is going? Sir,
B.R. Preetham
Sweden has grown very well, I think. Sweden has grown year on year close to about 70%. 62.5% to be precise or no. About 70% I think, yeah. And we expect the momentum to continue. Of course the cost structures in Sweden are different from the beginning. We have said that this is a very strategic investment for us. One is for getting into large connecting rods. So we do connecting rods. Up to 19 litre engine there, starting from 9 litre up to 19 litre, including for marine segment, including for, you know, large earth moving equipment, large trucks and all those things.
So it’s a segment which we were not present and it has given up a lot of opportunity for us through Indian plants as well. So we would like to continue to operate as long as, you know, this EBITDA margins are between 10 and 12%. That is what we have been aspiring and that is what we are doing. So it will continue to deliver that kind of percent. The thing next year the growth will get stabilized. I think next year we are looking at about 20% growth.
Vikas Goel
Probably the range of 20%.
B.R. Preetham
Yeah, 20% in Sweden. Yeah.
Mumuksh Mandlesha
Just possible to share what was the Q3 revenue and margin, sir, for this Sweden.
Vikas Goel
Q3 revenue was about 736 million rupees. I mean converted to rupees and the margin was about 14%.
Mumuksh Mandlesha
Got it. And also what was the Q2, sir, for Sweden?
Vikas Goel
Q2? I don’t have the numbers.
Mumuksh Mandlesha
No problem, sir. Thank you. Thank you. For this
Vikas Goel
quality season in Europe,
B.R. Preetham
Q2. Would have been lower because Q2 was one month off there.
Vikas Goel
One month off, 591 million and 16% margin.
Mumuksh Mandlesha
Got it? Got it, sir. Great, sir. And Congress on the strong. Thank you so much.
B.R. Preetham
Thank you.
operator
Thank you. The next question comes from the line of Nikhil Rao from. I thought pms. Please go ahead.
Nikhil Rao
Yeah, thanks. A couple of questions from my side on this JV with Nishidai is just wanted to understand the overall scope. Is it beyond automotive? Like are you planning to enter into any new industries through their filter business? Could you provide some insights on that?
B.R. Preetham
No, filters are not as part of the first phase of joint venture. We are focused on what we want to do which is forged and mission category of components. Primarily it would start with. It would start with automotive. But there are opportunities in non automotive. I said that there are opportunities in in energy segment. There are opportunities in humanoids. We are looking at a lot of such things where cold and warm forged high precision components are required on a mass scale. So they have the technology. We will be working with them to get these orders executed.
Nikhil Rao
Okay. And my next question is on the commercial vehicle segment. So given that the industry looks like it’s about to enter into an upcycle, are there any new order wins? Like have you seen any new orders coming in the past few months?
B.R. Preetham
See we are not present very strongly in the Indian commercial vehicle industry. We only cater to couple of players like Daimler and Volo, Aisha and Cummins. So on this we are seeing good in a demand increase. But we are not with Tata Motors, we are not with Ashok Lela and we are not much with Mahindra. So for us domestic commercial vehicle industry is not a very big part of our business.
Nikhil Rao
And one last question. Is there any new development on the MMRFIC side?
B.R. Preetham
There’s lot of developments on mmrfic A lot of which I can’t even say unfortunate on the public forum. So if there is an opportunity for you to visit so you would see what all things that we are doing on a public forum because lot of that is connected to defense and it is connected to government organizations both production and development. We are restricted to give too many details on that products.
operator
Are your questions answered? Nikhil.
Nikhil Rao
Okay. Okay. Yeah. Yeah. Thank you. That’s all for my thing.
operator
Thank you. The next question comes from the line of Ashev Patel from Molecule Ventures pms. Please go ahead.
Aashav Patel
Thank you for the opportunity. Congratulations to the entire team for phenomenal set of numbers. So sir, my first question is regarding the qualitative aspect within semicon division. So we have seen excellent ramp up in the numbers now. So how are we able to it at this scale in this segment so fast? What sort of caliber do we have in this space? How do we compare with our domestic and global peers in this segment and in terms of skill set and know how value addition, etc. If you can throw some light on the qualitative aspects of the same.
Hari Krishnan
We have. Thank you for the question. We have demonstrated last quarter that we are up there with the best in the world as far as execution is concerned. This ramp up what we have demonstrated has been very well received and accepted by the customers and I think it’s all due to the excellent team. We, we are very, very focused engineering company in the DNA it only has to translate into different components because engineering is our core strength and more complex the part I think more welcome for us the challenge. So I think we are very well placed and the satisfaction level with the customer is pretty high.
We are confident this will translate into more opportunities with the existing customer and as I said earlier with new customers also.
B.R. Preetham
In fact, to add to what Hari has said, Sunsera has been restricted to about 1.52 meters kind of components in the previous years. Now, both in ADS as well as in, I mean both in aerospace and defense and also in semicon we have developed and demonstrated and upgraded our capacities up to 4 meter components so we can including the special process capabilities we have set up. Of course special process is yet to start. It is in the final stages of commissioning. It would be mainly for aerospace, not for semicon in the to begin with. But then we have multiple different kinds of phi axis missions, different capabilities.
So the strength of sunset is to identify exactly exact kind of components which are very very complex in nature and identify and execute it in a best possible mission. So we have wide varieties of machines which are which can handle this. Very few of such facilities can be seen in India today where Phi access machines everyone will have but you know, different configurations and to handle a job of about 4 meters consistently producing mass production is our engineering skills.
Aashav Patel
Got it sir. So a follow up to that would be that within the surface treatment which you mentioned is that exclusively for aerospace. We are not targeting anything on the semiconductor side because what we see it is an industry phenomenon that even surface treatment is a crucial value addition in the value chain.
Hari Krishnan
It’s like this that we initially set about investing in surface treatment for our aerospace requirements. Subsequently, when we started ramping up in the semicon space, there have been discussions. There is also a requirement for the semicon components that goes through a totally different level of surface treatment. The requirements are far more stringent. But at this point of time we are restricting ourselves to only the aerospace surface treatment mainly for the reason that there are people in the vicinity who have created capacity and are creating capacity and with this we have enough conviction that our requirements can be met.
Aashav Patel
Got it, sir. So sir, my second question is with regards to our core ICE segment. So this quarter we were able to grow by double digits after a gap of almost four quarters. So now that post Covid we had an advantage of, you know, industry consolidation and taking away share from players who were financially burdened. So now given that we have already caught the low hanging fruit. So over next two, three years, what do you aspire the growth rate which you aspire for ICE segment? Specifically considering all the trade deals and everything.
B.R. Preetham
See, domestic ICE would grow between, you know, high single digit to low double digit kind of growth. That is what is the expectation from the market given post the post the gst which we think that for next couple of years at least will continue in the trend in the export segment. Just to give you some flavor on connecting rod like see connecting rod worldwide approximately. This is the study that we had got it done few years back. You know, we are one of the largest players outside the OEMs in connecting Rod. Could be about top five, top seven players in the world.
The overall volume of connecting rod post all the 25%, you know, electrification considered, 50%, hybridization considered could be about 380 million connecting rods per annum ex China. And we are doing about 5 to 7% of share of business. So there is a huge upside potential that is available given the fact that lot of European and US companies wants to outsource all the newer programs and the forging as an industry in the west are not in people are not there financially, it is not that conducive for them to invest. So there is an opportunity for countries like India, and specifically companies like Samsara, who has demonstrated consistently over the years to take these kind of opportunities forward.
So we expect in the next three years, especially in the export segment, we should see a very healthy 20, 25% growth given everything to be normal. So that is what we aspire to do. Of course, it depends on how many order wins that we have. I feel that the potential potential is there and if the environment will be conducive, we should be able to catch that upswing.
Aashav Patel
So on console basis, the ICE segment would easily be able to grow beyond 15%, right? Considering both domestic and export?
B.R. Preetham
I think so. I think so, yes.
Aashav Patel
Okay. And for my next question is that so this quarter we were able to see the potential of, you know, untapped operating leverage within our ecosystem for the first time as our margins improved from 17% to 18%. Because most of Our investments, as you rightly explained in the past, concourse is front loaded and the ROCE is get impacted on the initial years and stuff. So do you feel next year given the ramp up because Most of this H1 was flat for the ICE business. So given the ramp up in H2 and next year FY27 itself with support of eyes as well as EDS segment doubling down, we can see a case of 20% operating margin on a consolidated numbers.
B.R. Preetham
Yeah, our target remains to be that we should be 20% EBITDA, 20% growth, 20% RO3. That is what is the core objective with which the entire company is working on. Of course, with added advantage of ads doing well and also exports coming back, we should be able to improve our current margin profile. I would not say that we will reach 20% next year. We will definitely do better than what we have done this year. In fact this quarter we have taken a couple of things which should have actually otherwise our margin should have been 80% because 0.15% was due to grossing up of revenue because couple of our orders in the US where we pay the duty and collected.
Our auditors were of the opinion that we should gross up the revenue that has optically impacted our margins. And one time we have done some correction for development components which has also resulted in about 0.1. So we have actually started realizing that this one. So if we continue to do similar numbers, please understand that we have also signed up a labor agreement which will ensure our seamless continuity of all our plants except one plant for the next three years. But this also comes with little cost because generally when we sign the labor agreements, the first year gets loaded up front.
So considering all these things, we would probably be better than this year. In the listing, I don’t want to add the current stage, I don’t want to put what number we will have, but our margin profile will continue to be better than the current year.
operator
Thank you ladies and gentlemen. Due to time constraints, we would take that as the last question for today. I would now like to hand the conference over to the management for their closing remarks.
B.R. Preetham
Thank you very much and it was pleasure interacting with all of you. We would continue to put our efforts to deliver, you know, like in the beginning of the year we had said that we would like to end the year with mid teens to high teens. So our objective while the first two quarters were very very weak. But we have put all our efforts to make sure that we live up to what we have said. So we would still hope that we will end this year towards mid teens and next year would be much stronger.
Thank you for all for joining this call and patiently hearing what we had to say. Thank you very much. You are all welcome to visit our facilities to see further progress. You could contact either us directly or our investment partners, sda. Thank you again.
Hari Krishnan
Thank you.
Vikas Goel
Thank you.
operator
Thank you gentlemen. Ladies and gentlemen, on behalf of Sunsera Engineering limited, that concludes this conference call. Thank you for joining us. And you may now disconnect your lines.