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Sharda Motor Industries Slips After Q3 FY26; Margins Compress Despite Revenue Growth

Stock Performance & Trading Context

Sharda Motor Industries Limited (NSE: SHARDAMOTR) shares fell in recent trade, declining about 2% intraday to around ₹880. The stock has trended weaker over the past three months amid broader auto-ancillary volatility. It remains well below its 52-week high of ₹1,248 and above the 52-week low of ₹625. No analyst upgrades, downgrades, or price-target revisions were reported immediately following the earnings release.

Q3 FY26 Financial Performance

Sharda Motor Industries reported consolidated revenue growth in Q3 FY26, supported by higher volumes across emission systems and auto components.

  • Revenue: ₹805.5 crore, up year-on-year
  • EBITDA: ₹103.1 crore
  • EBITDA Margin: ~12.8%
  • Profit After Tax: ₹74.7 crore

Margins moderated compared with the year-ago period due to input-cost pressures and operating mix changes, even as topline expanded. The company maintained stable operating profitability, aided by scale benefits and product diversification in exhaust systems, suspension, and sheet-metal components.

Nine-Month (9M FY26) Performance

For the nine months ended Dec. 31, 2025:

  • Revenue: ₹2,368.6 crore
  • EBITDA: ₹305.6 crore
  • EBITDA Margin: ~12.9%
  • Profit After Tax: ₹219.3 crore

Growth was driven by sustained demand from passenger vehicles, tractors, and commercial vehicle segments, alongside improved order flows from OEM clients.

Operational & Segment Highlights

The company continues to benefit from:

  • Higher content per vehicle in emission systems
  • BS-VI and regulatory-linked product demand
  • Diversified exposure across PVs, CVs, and off-highway vehicles

Its manufacturing footprint and long-standing OEM relationships supported volume visibility during the quarter.

Balance Sheet & Business Position

Sharda Motor maintained a healthy balance sheet with controlled leverage and steady cash generation. Management reiterated its focus on:

  • Capacity expansion
  • Technology upgrades in emission solutions
  • Deepening EV-adjacent and regulatory product offerings

Outlook Context

While revenue momentum remains intact, margin sensitivity to commodity costs and customer mix persists. Industry demand trends and regulatory transitions will remain key earnings drivers in coming quarters.

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