Sterling Tools Limited (NSE: STERTOOLS) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Pankaj Gupta — Chief Financial Officer
Atul Aggarwal — Managing Director
Jaideep Wadhwa — Non-Executive Non-Independent Director
Anish Agarwal — Non-Independent Non-Executive Director
Analysts:
Unidentified Participant
Deepan Narayanan — Analyst
Apoorv Bandi — Analyst
Ashish Khurana — Analyst
Ravi Shah — Analyst
Swapnil Gupta — Analyst
Presentation:
operator
SA. SA SA Sam SA Sam SA It Sam It Sam It Foreign. Ladies and gentlemen, you have been connected to Sterling Tools Limited Q1 FY26 earnings conference call. Please stay connected. The conference will begin shortly. Ladies and gentlemen, you have been connected to Sterling Tools Limited Q1 FY26 earnings conference call. Please stay connected, the conference call will begin shortly. Ladies and gentlemen, good day and welcome to Stirling Tools Limited Q1FY26 earnings conference call. This conference call 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 involves risk and uncertainties that are difficult to predict.
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 telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pankaj Gupta Group CFO of Sterling Tools Limited. Thank you. And over to you sir.
Pankaj Gupta — Chief Financial Officer
Thank you. Good afternoon everyone and welcome to Sterling. Tools Limited Quarter 1 FY26 earning call. I’m joined today by Mr. Atul Agrawal, Managing Director, Mr. Jaydeep Wadhwar, Director, Mr. Anish Agarwal, Director and SGA, our investor relation Advisor. Our earning presentation has been uploaded on our website as well as on the stock exchanges. I will now invite Mr. Atul Agarwal for his remarks.
Atul Aggarwal — Managing Director
Good afternoon everybody. I hope you can hear me. Yes sir. Wonderful. Thank you. Pankaj. Let me start with industry highlights. India’s automobile industry saw an Overall decline of 5.1% in Q1 FY26. Passenger vehicle sales declined by 1.4% year on year. Two wheeler sales fell by 6.2% year on year and three wheeler sales grew marginally by 0.1% and commercial vehicles declined by 0.6%. Looking ahead, CIAM has projected a cautious yet optimistic outlook for Q2 driven by expectations of a normal monsoon festive season demand and supportive monetary policy. However, challenges around rare earth magnet supply restrictions from China remain a key watch factor for the overall automotive sector.
While the domestic automobile industry witnessed a year on year decline of approximately 5.1% in Q1 FY26, our standalone partners business was stable supported by operational discipline and sustained offtake by key customers. We continue to grow at a faster pace as compared to the industry. We have begun to see early traction from newly acquired customers in standalone fastener business including Hyundai. The onboarding of these new OEMs strengthens our long term positioning and is expected to support incremental growth in the coming quarters as was shared in last quarter’s earnings call. On a consolidated basis, we have seen a decline in revenue due to product insourcing by one of our key customers.
This transition has impacted our consolidated performance for the current quarter with the revenue declining by 31% year on year to 195 crores. While this is a temporary setback, we continue to our growth initiatives. SGM is working actively with 28 customer programs for various MCU models. These customers are spread across two wheelers, three wheelers, LCVs and HCVs with a greater emphasis on incumbents. Further, SGM is leveraging its expertise in powertrain and power electronics domains to aggressively pursue product diversification by adding new products such as integrated motors and MCUs, magnetry motors, onboard chargers and DC DC converters.
These additions will enhance our value proposition within the EV ecosystem. Sterling secured its first nomination for DC to DC converters from a leading ecv, OEM and other new product lines. We’ll also start generating revenues by end of the fiscal or during FY27. Looking ahead, our focus for scaling SGEM and achieving profitability will center on driving volume growth and acquiring new customers. Optimizing the supply chain through strategic sourcing initiatives in sourcing critical processes to gain tighter control over operations and achieve cost efficiencies Investing in advanced manufacturing technologies such as smt, surface mount technology and shop floor automation to enhance production efficiency Strengthening in house engineering capabilities by leveraging global expertise and building robust development networks.
HGM’s strategic alliances with global technology leaders such as jiangsu GTech Electric Co. And Advanced Electric Machines will further strengthen our technological and market credibility. With these developments, SGM has evolved into a full spectrum powertrain and power electronic solution provider to the EV industry. We are especially excited about our alliance with UK based Advanced Electric Machines to develop REM free motors. Prototyping and localization efforts are ongoing and there’s a tremendous interest from OEMs from all segments of the industry due to the risks associated with REM supplies. Our other subsidiary STML is in advanced stage of completing the construction of the facility at Bangalore and expects to commence the commercial production in the second half of FY26.
Looking ahead, our standalone business is expected to maintain a stable growth trajectory driven by new customer additions and deeper market penetration. Strategically, we are aligning our efforts across STL Group to expand in the autonomous, connected and electric mobility space. This comprehensive approach positions us to stay ahead of industry trends and drive innovation. I’m going to hand over to Jerry Vardba, Managing Director of SM to talk more about his business and then Anish will take over and talk about the new businesses at stml. Jaydeep, over to you.
Jaideep Wadhwa — Non-Executive Non-Independent Director
Thank you. Thank you Atul. Good afternoon everyone. Thank you for taking the time to speak with us today. Atul has given an overview of what we are trying what we are doing in the Sterling Getech E Mobility business. We announced last quarter that the finalization of our licensing agreement with Advanced Electric Machines and we’ve seen tremendous interest in the Rare Earth Free Rare Earth Magnet Free motors that we will BE licensing from AEM. We have advanced negotiations with different OEMs to deliver a proof of concept and I hope that sometime in FY27 we will be able to start production of these motors.
The lead time that we require for this is not because we are not ready for production, but because the testing and validation will take a long time. The OEMs will need to do both bench testing as well as testing on vehicles for which they there is a tremendous amount of hours that need to be clocked. In addition, we’ve been working on DC DC converters, onboard chargers and off board chargers. And as Atul mentioned, we’ve already secured our first nomination for a DC DC Charger project and hope to start supplies for that by the end of this calendar year and this will ramp up over the next after we start initial supplies.
We can expect the volumes to ramp up in the coming months with these new projects. Rare Earth Magnet Free Motors Onboard Chargers Offboard Chargers DC DC Converters we feel that the profile of the company is going to be very different and we are actively considering changing the name of the company to Sterling E Mobility limited to reflect the broader portfolio that we will be catering to. This does not however mean that our association with GTECH will be in any way diminished. In fact, we continue to invest strongly in that relationship. We have been expanding rapidly in the heavy commercial vehicle space and we’ve done well with the GTECH product portfolio there.
And most importantly, we have a number of programs where we are working with Getech on two wheeler programs typically for integrated motors and controllers to serve incumbent two wheeler customers. So I think we, as we mentioned in our last earnings call, we have a tough year ahead of us to make up for the drop in revenue that we are experiencing due to insourcing by one of our key customers. But the initiatives that we had taken in the last several Months are all on track and we expect to regain our position in this market and in fact enhance that further with a much wider product range going forward.
That’s a brief overview from my side. Back to you Atul.
Atul Aggarwal — Managing Director
Anish, you want to take.
Anish Agarwal — Non-Independent Non-Executive Director
Quick overview on Sterling Tech Mobility Ltd. Wherein we are planning to manufacture high voltage DC contactors. Our factory is our machine is under installation. We hope to finish the commissioning of the factory by September, end this year and do small volume trials by October and get into full scale production by first week of November this year. We are actively working with E2 Wheeler, E3 Wheeler, ELCVE Bus and E passenger vehicle companies and their tier one’s to cater to the industry and to localize these products for these customers so that they can avail the subsidy schemes as per the Auto Component policy.
We hope to add few more products within Sterling Tech Mobility over the next few years which we’re in discussions for and outside of Sterling Tech Mobility. Also we are working on certain EV agnostic products that hopefully we’ll announce to the market in the due course of this year. So before I hand over to Karan for questions I just want to make another additional comment after Jaydeep’s and Anish’s statements. We are adding a lot of product lines which are currently under import substitution under the make in India initiative and primarily for EV and electric vehicle industry across all segments. Customers are currently substantially importing them. We are starting greenfield sites in India. I think we are building our future but having said that the revenue buildup will start happening anywhere in the next two to five years. So we are building our future and I think we are looking at our vision for our businesses are anywhere from 3 to 10 years going forward and looking at a sustainable business model.
Keeping in mind our legacy is fastness cold force components for us to we have done a a dramatic shift in our growth initiatives on the EV ecosystem and I think that shift has working out well. There’s a lot of customer acceptance, there’s a lot of capabilities.
operator
Sorry Atul, we lost you.
Atul Aggarwal — Managing Director
There’s a lot of customer acceptance and there’s a lot of customer acceptance and a lot of acceptability with our partners as well. So it’s a gradual shift but in summary the revenue growth for these businesses will start happening in the next two to five years. I think we may have a little more slow period in terms of a top line revenue growth substantially in our non fastener businesses. I’m going to open the floor for questions now.
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 please press star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, to ask a question please press star and one. Now the first question is from the line of Deepen Narayan from Trust Line Holdings Private limited. Please go ahead.
Deepan Narayanan
Good evening everyone and thanks a lot for the opportunity. So firstly from my side. So what is the kind of capacity utilization currently we have on this MCU capacity and what are our strategies to ramp up the utilization there?
Jaideep Wadhwa
So sorry, could you repeat the name please? Sorry, I didn’t get that properly.
Deepan Narayanan
Deepen from Trust line.
Jaideep Wadhwa
Yeah, sorry, sorry. Deepan. So Deepan, so what we have done in the last couple of months is that you know we built up a capacity as we talked about of about 720,000 MCUs per annum or 60,000 MCUs per month. This was for the two wheeler product range which is, which is what we were doing a lot of. We have since repurposed our lines. We continue to retain a capacity of about 300,000 MCUs. 360,000 MCUs to be precise, for low voltage. And we’ve repurposed two lines for higher voltage products that we are selling to the truck and bus industry and also some of the new products that we’ve launched.
So if you. To give a blended. To give a blended number would be difficult but it would be. I would say with these different parts of the portfolio we would be just under 50% capacity utilization.
Deepan Narayanan
Okay. And whether this current quarterly run rate of these MCUs for two wheeler is expected to be around this 30, 35 crore for at least some few quarter.
Jaideep Wadhwa
So Deepan, as I mentioned. So let me first answer that. Yeah. We expect that we will maintain or do better than that run rate in the coming quarters. As I mentioned, we are working with a number of OEMs on a number of projects on the two wheeler side. And we do expect some of those to. To start giving us additional volumes in the next six months or so.
Deepan Narayanan
Okay. Okay. And regarding these trucks and bus industry for these higher voltages, what we are talking about. So when do we expect revenues to start kicking in for us?
Jaideep Wadhwa
So revenues are already there. We are. So the government announced an updated PME drive policy and we expect. And then that new policy requires CKD assembly by September and full localization by February. We expect that once the full localization we expect, even starting with the CKD assembly, we will see a boost in volumes and definitely once the full localization is done, we will see further increases in volume. But the HCV industry right now for this last quarter was over 25% of our total revenue.
Deepan Narayanan
Okay, okay, got it. And can you throw more light on these newer businesses when it will start contributing and what will be the kind of full potential for revenues we expect from this newer business? Just to get a sense on whether we’ll be able to make up for the loss of business in this MCV two wheelers.
Jaideep Wadhwa
Okay, so I assume you’re talking only of the power electronics and powertrain components and not about the businesses that Anish just talked about. So I’ll just address that and then Anish can add further light on. So as I mentioned, the first business has already been secured and we expect to see revenue kick in from the end of this calendar year. We already received the nominations. In terms of business potential, there are a couple of different aspects. So I think I’ll answer this in two ways. One is that between the new program that we are working on with incumbent two wheelers as well as these new products that we are looking at, we definitely hope to be able to make up or regain our revenue numbers, you know, by the end of FY27.
So that’s the time frame towards which we are working.
Anish Agarwal
I think from STML because our products are more catered towards passenger vehicles and commercial vehicles. The validation time periods are longer and we think it will start generating revenue for us from next year onwards. I think hopefully in the next five years we hope this business will be somewhere in the range of 150 to 200 crores.
Deepan Narayanan
Okay, and what about power electronics? What will be the full potential?
Jaideep Wadhwa
So there’s still one we’re still looking at, you know, trying to understand exactly what will be the potential in the passenger vehicle space. But again we expect this to be over a hundred crores in the next three years or so.
Deepan Narayanan
Okay, thanks a lot and all the best.
operator
Thank you sir. Ladies and gentlemen, to ask a question please press Star and one Now. Participants who wish to ask questions may please press Star and one at this time. The next question is from the line of Apur Pandy from Whitestone Financial Advisors Private Limited. Please go ahead.
Apoorv Bandi
Thank you sir for the opportunity. So my question is on the LZEM partnership with UK based AEM company for REM free electric motor. So how much capex is required for that?
Jaideep Wadhwa
So, so you know that so the CapEx, let me address that in a couple of different ways. The capex required for the assembly lines will be, depending on, you know, the level of automation will be somewhere between 15 and 25 crores. The other big piece is toolings. Now one of the models has already been tooled up in India. We already, you may have noticed that we are showing some export revenue. And I think we also mentioned that we have developed these components in India and are exporting them to AEM and they are using these components in the motors that they are building and supplying to their customers in Europe.
So depending, I mean I expect that we will have at least three or four families of products that will have to be, that will be launched in India in the near term. So there will be possibly investments in toolings for three more families. And each tooling could easily be, you know, I don’t know the exact number but you know, it could be more than 5 crores or more.
Apoorv Bandi
So approximate like 20 cr can we expect the capex would be.
Jaideep Wadhwa
So that would be on the production line and then on tooling. So maybe a total CapEx of about 35, 40 Cr.
Apoorv Bandi
Okay. And so my next question is like is this product globally used by the JV partners? The Rare Earth Free motor, is it used the OEMs currently globally.
Jaideep Wadhwa
So it’s not a JV, it’s a technology licensing agreement. So AEM has sold these products, they are supplying them to an OEM, sorry tier one in Europe and they’ve also supplied these to an OEM, a truck OEM in the UK as well as bus OEMs in Indonesia and Australia. So they have a fair amount of traction across and I think the total miles that AEM motors have completed in these applications is over 4 million miles.
Apoorv Bandi
Answer. I think when it will start contributing to revenue, specifically this motor configuration.
Jaideep Wadhwa
As I said, as I said that we will, we probably see revenues from Rare Earth Magnet. I mean there will be some, you’re already seeing some revenues from our export of components back to aem, but that’s not very large. We expect to see, we expect to see revenues from customers in India during FY27.
Apoorv Bandi
Got it. And so on. Just one last thing. If I have get it right, currently we are manufacturing some components for EEM in India and we export them to the EEM for their global use. But later on what’s we, what we are looking for is the complete motor would be manufactured in India. Is it right?
Jaideep Wadhwa
That’s right. So right, we. So again what I’m saying Is that, you know, obviously you have different motor sizes, right? I mean you have motors of different capacities. So for one motor we have already localized all the components in India, but we have not put up the assembly line. We need to put up the assembly line. That’s the only thing we need to do. There’s no further component development that needs to be done. So this is very important for us because it demonstrates that we, you know, we’ve understood the manufacturing processes, we’ve learned what’s critical to quality, we’ve learned how to work with AEM and you know, meet their quality expectations and so on.
So there’s a lot of work which has happened already in this area.
Apoorv Bandi
And how much revenue can we expect, not right now, maybe next couple of years, two, three years from this motor thing?
Jaideep Wadhwa
Look, this is a, I mean, you know, I could give you a very optimistic answer. If you look at the penetration that, that is we are going to see for electric vehicles, you know, you could see in the next couple of years there was, there will be, you know, let’s say we would reach 3 million, sorry, 2 to 3 million high speed scooters and motorcycles. I mean that’s I think a very conservative estimate. And to assume 10% market share is not, is not outlandish. But I have to caution and say that look, this is a new technology and it does, you know, this is not about making a spreadsheet and saying yes, I can get 10% market share.
We have to be able to prove out the product. So I, you know, I have to, the potential is very big. But we, we’ve got to, we’ve got to be able to convert that potential into revenues quickly call it.
Apoorv Bandi
And so this is an exclusive, exclusive technology transfer, right? Or is it that someone else.
Jaideep Wadhwa
Exclusive for India. We. Exclusive for India.
Apoorv Bandi
Thank you sir and all the best. Thank you.
Jaideep Wadhwa
Thank you sir.
Apoorv Bandi
Thank you so much.
operator
Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Ashish Khurana from ANK Capital. Please go ahead.
Ashish Khurana
Good afternoon and thank you for the opportunity, sir. So I’m a bit new to the company so if you bear with me, are you non fastener business is divided into two verticals primarily. So one is power electronics which is I think almost 100% EV focused. And second one would be STML which is mechanical components which is both PVs and EVs focused. Is that understanding correct?
Anish Agarwal
So let me clarify. STML is also focused on electrification and beyond electrification it focuses on energy storage system and charging infrastructure. So the bulk of the business for STML is also within the ambit of electrification.
Ashish Khurana
Okay, got it.
Jaideep Wadhwa
Also if I may add, I was just going to say that what we are, you know, the non fastener businesses for Sterling will be typically in the autonomous connected electric space.
Ashish Khurana
Okay, got it. So these partnerships that we talked about in the previous calls with Kunshan and I think there was another company, Zhejiang, so these would fall under stml, is that correct?
Anish Agarwal
Yes, that’s correct.
Ashish Khurana
And the capital outlay the initial capex plan was around 70 to 80 crores for these with a potential revenue of around 300400 crores in the next two to three years. Is that understanding correct?
Anish Agarwal
Yes. The capital outlay for this is roughly to the tune of 50 crores with a revenue projection of 150 to 200 crores for STML.
Ashish Khurana
And I think in that is for the.
Jaideep Wadhwa
For the current product line. Yes, for the current product line, that’s correct.
Ashish Khurana
And I think in one of the previous calls it was mentioned that the margin profile for these two components that we have, you know, partnerships with the Chinese companies for. So that is currently, you know, still we are figuring that out. Right?
Anish Agarwal
Sorry, we already have a technology collaboration agreement and sorry for the margins. The margin profile will be double digit and we hold with those margin profile that we had committed to earlier on.
Ashish Khurana
And to Mr. Atulagamal sir. So if we look at the non fastener business, so the vision indeed is promising and the bets are diversified so we are not betting on a single outcome. So if I were to ask you for you know, the next three to five years in the non fastener business. So what kind of capital outlay do you see both in terms of capacity and human resources that I mean I know it might change later but as of now do we have a capital outlay in mind for this?
Atul Aggarwal
Yes. So Ashish, bulk of our investments having bulk of our investment in non fastener business at SEM, SEM and STML and I think we are working on a couple of new products which will about in the next few months. I think we are looking at a total investment between 150 to 200 crores in the next three years in these different businesses. The revenue potential of all of them put together could be anywhere between. Anywhere from between 500 to 1000 crores depending how the market penetration not only for EV is keeps on changing as per government policy because bulk of the products are in the EV ecosystem and secondly what the customer adoption acquisition at the same time is.
Ashish Khurana
And one final last question from my side sir. So I’m not being skeptical at all and please don’t take it otherwise. So I mean so we have you know, very diversified products in place in the non functional businesses that we are targeting and you know, probably you know, we’ll you know, maybe crack them on the technology side but you know, to get a broad based, you know, client base and then you know, to gain market share there are other things that are needed. So what I wanted to understand was that what do you think would, you know, what are the few points that you think would you know, give us the right to win in this business? Is it that, you know, the ticket size is lower compared to the MCU business.
So you know, there’s a risk of this lesser risk of insourcing being there. If we scale up, you know, we’ll have a cost advantage. You spoke about import substitution. So I just want to understand, you know, in this attempt to build a strong non fastener business what would you know, help us have a strong and sustainable competitive advantage in the next three to five years.
Atul Aggarwal
So can I, Let me, yeah, let me take it. And maybe if I’m missing something, you can supplement me. Okay. I just want to mention I won’t go back to our journey which started six years ago, seven years ago in non fastnet businesses. We had, we understood at least as per our understanding fastener business is going to grow. It’s going to continue to do well but it still is, we’re holding a holding strong double digit margin structures in that business and our customer profile is very strong. Having said that, our fasting business is not going to give us radical growth going forward.
It’s going to be incremental. We may and will grow parts of that industry like we have in the first quarter. But we realize that we need to grow faster. We need to grow faster and we also need to have a future ready business. We realize that EV is the place to be and I think we were the first movers to start an MCU product line in India or a lot of product lines for that matter. In fact all the products what Jay Bananish spoke about, we’ll have the first mover advantage. Nobody else is making those products in India as of now.
Sgem is a five year old business now where we make MCUs. Next into that was going to be integrated motors and MCUs. Eventually we do gears, etc. So it may start with two in one month. Three in months, four in one month and five in one. And Jerry can get the technology of that more often. But even in STML we’re doing DC contractors. Other new products we are looking to make in India are again currently being imported in passenger vehicles and commercial vehicles. So we are looking at products which are not being made in India but there’s no technology in India and we are doing greenfields with trusted partners from overseas.
So we have started, we are jump starting our business with technology which we are building on top of. We are localizing, we are customizing, we are improving the performance of the technologies keeping in mind local, Indian and customer conditions. So I think in a nutshell one would be a first mover. Advantage. Second, from a customer perspective they have seen our success, what we have done being a legacy fastener maker. When we started mcu we had tremendous success in that business. We had a hiccup in SGM where like I said, one of our key customers in house, it, it wasn’t as if we lost the business to competition.
If anything it was more of a strategic call that customer took to in house that product. So second one I had was first mover advantage. Second, being with our success in MCU business there’s a tremendous track record. We have the customer access, the customer connects. We have been able to build because of that across the entire EV ecosystem in India across all segments is fantastic. And finally the facilities we are putting up are totally world class. We are putting up, we are not leaving any stone dirt from a technology perspective in terms of tech centers, centers of excellence for each of the product lines, the customers are able to see our vision, what we have laid out in the next five to ten years.
And lastly we are putting a lot of capital behind it. As you can see on the capex side and along with human resources, Jaydeep is heading one segment of the business. Anish is heading the second side of the business. Now having said that, they have a strong leadership team below. You know each of those businesses are fully manned by very competent teams, very empowered teams to take it forward. Do you want to add anything to that?
Jaideep Wadhwa
No, I think Atul, you covered the main points. I mean we’ve been very innovative, we’ve been first movers. I’ll also say that with some of the projects that Anish is working on, we are actually creating a backward integration. So the magnetics feed into our charger and MCU businesses, the HVDC contactors feed into our PDU business which is an integral part of what we do with the heavy commercial vehicles. So these aren’t just random products that we picked up. We picked up products that actually make up a significant part of our bom of existing products that we have in our portfolio or products that we knew we had to enter into to meet customer requirements.
So it’s a part of a fairly well integrated strategy.
Ashish Khurana
Got it. So I think as an investor, a bold yet a thought through vision is probably what we want to see. So it won’t be an easy ride, but wish you all the best and look forward to continuing being invested with you. Thanks a lot, Mr. Garbal. Thanks a lot, Mr. Gadwa. Thank you. Thank you.
Atul Aggarwal
Thank you.
operator
Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Ravish Shah from VRs Capital. Please go ahead.
Ravi Shah
Hi sir. Thanks for the opportunity. So I had just two questions. First would be what would be our strategy to capture the opportunities in the autonomous connected and electronic mobility space beyond my current portfolio?
Anish Agarwal
What we have. Can you repeat that question?
Atul Aggarwal
Let me take.
Ravi Shah
Yeah, so, yeah, okay. So basically it was on the autonomous connection and electric mobility space. What would we do beyond our current product portfolio is what the question is.
Atul Aggarwal
So if you see, if you see all our product portfolio, the new product portfolio from MCUs to motors to DC to DC converters, DC rarer 3 motors and some of the new stuff will be launching in the new front. They’re all these product lines are targeted this ACE autonomous connected energy sector, all of them are. So I think, you know, most of our, almost all of our future product strategy growth strategies based on this ACE segment.
Ravi Shah
Understood, sir.
Jaideep Wadhwa
I would just like to add that, you know, typically what we are doing is, as Atul said, everything we’re looking at is in terms of our capital allocation is in the autonomous connected and electric space. We are looking for unserved or underserved market niches where what is being used by the Indian OEMs or even tier ones is typically imported. And we want to be able to replace that with a made in India product. That’s one part of the strategy. So typically, you know, what’s not being done here, that would be, that’s how you would see a lot of our product planning move forward.
The second thing is we would leverage what we know. So over the last five years, as Atul talked about, as we’ve done in MCUs, we developed I think a fairly decent competence in power electronics. We understand the technology behind it we understand the supply chain and we know how to ramp up. We put up this factory, our factory in Faridabad was put up thinking at most that we would be selling 10,000 units a month. We actually were able to ramp up to 60,000 units a month with very, very little advance planning from our customers. We responded very quickly.
We were able to build up competencies, localize and ramp up capacities actually also with very little capex because we didn’t have, not because we were trying to save money but because we didn’t have the time. We just needed to be very, very responsive. So what we are trying to do is to build on those competencies to say okay, we understand power electronics, we understand how to put together a pcb, we understand SMT manufacturing, we understand what the quality requirements are and that’s what we want to continue to build on.
Ravi Shah
Understood sir. Thank you. It’s a detailed answer. So this would tie into my second question basically on capex. So what would be our capex plan for FY26 and FY27 and whether you could break it down between fasteners, SGM, SGM and STML. And what would be our plan rois for these investments?
Pankaj Gupta
I’ll take that question.
Atul Aggarwal
So in our fastener business we’re going to have, we have a capex plan of being 1590 crores for STML. Our plan, this our total projected outlay, 50 odd crore. The bulk of this will be probably be spent this year. And I think the capex plan for Sterling gtech now called Sterling E mobility is probably going to be in the range of 20, 20 or 25 crore this year. F 527. We are still crystallizing our plan in the next few months as and when we have some clarity we’ll communicate.
Ravi Shah
Understood. So I’m not planned ROIs for these investments or any, any target that we have.
Atul Aggarwal
So you know, you know calculating incremental capex ROIs is very difficult. These are all, some are maintenance capex, some are incremental capex of capacity, some are tech capexes. So we don’t look at each capex as an ROI perspective. It’s a piece in a puzzle we’re trying to put together and we look at the full package over time.
Ravi Shah
Understood sir. Thank you so much and all the best sir.
operator
Thank you sir. The next question is from the line of Chirag Shah from White Pine Investment management. Please go ahead. The next question is from the line of Sapnil Gupta from White Pine Investment Management. Please go ahead.
Swapnil Gupta
Hi sir. Thank you for the opportunity. My question is relating to a magnetry motor where we are currently in the process and by when you will be generating revenue from it and any OEM for which we specifically manufacturing this magnetary motors.
Jaideep Wadhwa
So there’s, there’s no OEM in India for whom we are manufacturing these motors as of now. What we are doing at this time is to map customer requirements against what we can do. So in, you know the idea of a magnet free motor, if you have either a weight, size or performance penalty or there is a cost penalty as compared to, as compared to a permanent magnet motor, then it’s not viable. I mean it may be a short term opportunity because of the supply issues, but it’s not a long term sustainable opportunity. So typically what we are doing is we are working, we are engaged with a number of OEs where they’re giving us their performance and design, performance and space envelopes to say, okay, this is the size we need, this is what performance we need.
And we are working with our partners to make technical proposals and say, okay, this is how we can do it, this is how we can meet your requirements. And also how much time and how much time and money would it take to be able to deliver these requirements in terms of revenue, we expect revenue from domestic OEs to kick in in FY27 as I mentioned earlier.
Swapnil Gupta
Thank you for answering my question.
operator
Thank you sir. As there are no further questions from the participants, I now hand the conference over to management for closing comments.
Atul Aggarwal
Thank you everybody for dialing into a call, making time for us. We are on a long journey. We are very focused and we are very positive and optimistic about our future. We may have had a temporary setback, but I think there’s a lot more, we are working on a lot more iron the fire out here and I think you will see us playing a lot of that stuff over time and crystallizing into more positive news as we go forward. Thank you. All the best. Thank you.
operator
Thank you sir. Thank you on behalf of Sterling Tools Ltd. That concludes this conference call. Thank you for joining us and you may now disconnect your lines. Thank you.