Sterling Tools Ltd-$ — Q4 FY26 earnings call
Summary generated by AI from the official transcript Sterling Tools Ltd-$ filed with BSE on 22 May 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Sterling Tools reported FY26 stand-alone fastener business total income growth of 11.4% to Rs 725.9 crores with EBITDA up 17.1% to Rs 111 crores and margins improving to 15.3%. Management flagged steel and energy cost inflation likely to pressure Q1 FY27 margins, and said the EV component businesses have seen adoption timelines pushed back by 3 to 5 years. The company also detailed a subsidiary-level bad debt provision of Rs 21 crores taken in Q4 and outlined plans for HVDC contactor and OBC/DC-DC converter production ramp-ups during FY27.
Numbers mentioned
Total income (stand-alone fastener business): INR725.9 crores (FY26)
p. 4
“Total income grew by 11.4% Y-on-Y to INR725.9 crores, while EBITDA increased by 17.1% Y-o-Y to INR111 crores with EBITDA margins improved to 15.3% compared to 14.5% last year.”
Atul Aggarwal, page 4 of the filed PDF · View the filing
EBITDA (stand-alone fastener business): INR111 crores (FY26)
p. 4
“Total income grew by 11.4% Y-on-Y to INR725.9 crores, while EBITDA increased by 17.1% Y-o-Y to INR111 crores with EBITDA margins improved to 15.3% compared to 14.5% last year.”
Atul Aggarwal, page 4 of the filed PDF · View the filing
EBITDA margin (stand-alone fastener business): 15.3% (FY26)
p. 4
“Total income grew by 11.4% Y-on-Y to INR725.9 crores, while EBITDA increased by 17.1% Y-o-Y to INR111 crores with EBITDA margins improved to 15.3% compared to 14.5% last year.”
Atul Aggarwal, page 4 of the filed PDF · View the filing
Profit before exceptional items: INR74 crores (FY26)
p. 4
“Profit before exceptional items grew by 27.6% Y-o-Y to INR74 crores, supported by better operating leverage, favorable product mix, increasing share of value-added products, improved gross margins, continued operational efficiencies and financial discipline.”
Atul Aggarwal, page 4 of the filed PDF · View the filing
Cash flow from operations (stand-alone fastener business): INR83.3 crores (FY26)
p. 4
“Cash flow from operations from the stand-alone fastener business stood at INR83.3 crores during FY26.”
Atul Aggarwal, page 4 of the filed PDF · View the filing
Business acquisitions secured: approximately INR64 crores (FY26)
p. 4
“During FY26, we secured approximately INR64 crores of business acquisitions, which further strengthened future revenue visibility.”
Atul Aggarwal, page 4 of the filed PDF · View the filing
Current Indian market opportunity for HVDC contactors and pre-charge relays: approximately INR300 crores
p. 6
“The current Indian market opportunity for HVDC contactors and pre-charge relays is estimated at approximately INR300 crores and expected to grow to over INR750 crores by this end of this decade, driven by increasing electrification across 2-wheelers, passenger vehicles, commercial vehicles, charging infrastructure, solar and battery energy storage applications.”
Atul Aggarwal, page 6 of the filed PDF · View the filing
Fastener business market share: between 25% and 30%
p. 7
“Our estimations are that for the automotive industry -- pure automotive segment, we are anywhere between 25% and 30% of market share in the country.”
Atul Aggarwal, page 7 of the filed PDF · View the filing
Motor and motor control unit price: up to INR14,000
p. 11
“Now, a motor and motor control unit together are, say, depending on the size, up to INR14,000 or somewhere there, integrated unit, yes.”
Jaideep Wadhwa, page 11 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Fasteners business capex — INR75 crores · FY27
stated firmly by Atul Aggarwal
p. 4
“Looking ahead, we expect capex for the Fasteners business in FY27 to be around INR75 crores, primarily towards capacity expansion, operational enhancements and future growth programs.”
Atul Aggarwal, page 4 of the filed PDF · View the filing
OBC and DC/DC production line commissioning — end of Q2 FY27
stated firmly by Atul Aggarwal
p. 5
“Our OBC and DC/DC production lines are expected to be commissioned by end of Q2 FY27 and commercial supplies are expected to commence from Q3 FY27 onwards.”
Atul Aggarwal, page 5 of the filed PDF · View the filing
HVDC contactor commercial production — July/August '26
stated conditionally by Atul Aggarwal
p. 5
“Customer validations, laboratory testing and Tier 1 engagements are progressing well and commercial production for serial orders is expected to commence from July/ August '26 onwards, while supplies for brand label products have already started.”
Atul Aggarwal, page 5 of the filed PDF · View the filing
EBITDA margin for fastener business — around 15% plus
stated as an aspiration by Atul Aggarwal
p. 12
“We are confident that we'll be able to maintain our EBITDA margins around 15% plus.”
Atul Aggarwal, page 12 of the filed PDF · View the filing
SEM business profitability — profitable · FY28
stated conditionally by Jaideep Wadhwa
p. 9
“But we've had setbacks in FY26, and we will possibly not be -- and we will not be profitable in FY27. But there is no reason for us not to be profitable in FY28.”
Jaideep Wadhwa, page 9 of the filed PDF · View the filing
Fastener capex commercialization — Q4 FY27
stated firmly by Atul Aggarwal
p. 13
“So, the INR75 crores will all be commercialized last quarter of this financial year, Q4 FY27.”
Atul Aggarwal, page 13 of the filed PDF · View the filing
Fastener business revenue capacity — INR900 crores to INR1,000 crores
stated as an aspiration by Atul Aggarwal
p. 13
“We are building our capabilities to take it up to about INR900 crores to INR1,000 crores.”
Atul Aggarwal, page 13 of the filed PDF · View the filing
OEM price increases for fasteners — Q2 onwards
stated conditionally by Atul Aggarwal
p. 7
“We are quite hopeful of that, yes.”
Atul Aggarwal, page 7 of the filed PDF · View the filing
EV and non-EV business aspirations — about a year deferred
stated conditionally by Atul Aggarwal
p. 4
“And therefore, may defer our targeted EV and non-EV business aspirations by about a year.”
Atul Aggarwal, page 4 of the filed PDF · View the filing
Fastener business revenue growth — FY27
stated conditionally by Atul Aggarwal
p. 12
“So, we believe that we'll be able to grow faster than the automotive industry as a whole in India, which is what happened last year.”
Atul Aggarwal, page 12 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said it reflects a prudent bad debt provision related to a major customer, not an operating loss.
Answered by Jaideep Wadhwa
Asked by Madhur Rathi: What is the Rs 21 crores loss at subsidiary level in Q4 regarding?
p. 6
“We have, however, taken a provision -- a bad debt provision in line with prudent accounting standards, even though we think there's a high chance of -- there's a high probability of recovering the dues just to be -- just to, like I said, be very prudent in our financial statements.”
Jaideep Wadhwa, page 6 of the filed PDF · View the filing
Management confirmed no price reduction contracts and said steel costs pass through, but energy and chemical inflation creates near-term margin pressure to be offset by efficiency gains and customer price increases.
Answered by Atul Aggarwal
Asked by Madhur Rathi: Are there price reduction contracts with OEMs, and what margin pressure is expected from steel/energy inflation?
p. 7
“No, we don't have any price reduction contracts, nowhere. Prices remain constant.”
Atul Aggarwal, page 7 of the filed PDF · View the filing
Management said SEM will not be profitable in FY27 but expects to return to profitability in FY28.
Answered by Jaideep Wadhwa
Asked by Payal Shah: Has the SEM EBITDA breakeven target shifted given slower EV penetration?
p. 9
“But we've had setbacks in FY26, and we will possibly not be -- and we will not be profitable in FY27. But there is no reason for us not to be profitable in FY28.”
Jaideep Wadhwa, page 9 of the filed PDF · View the filing
Management said customers have been onboarded but supplies haven't started; they expect the bus industry to ramp to about 10,000 units a year.
Answered by Jaideep Wadhwa
Asked by Payal Shah: Have new CV customers or platforms been onboarded for the MCU business, and what is the addressable market for e-bus/e-truck MCUs?
p. 10
“we think that the industry should ramp-up to about 10,000 units a year kind of numbers in the coming years for buses alone.”
Jaideep Wadhwa, page 10 of the filed PDF · View the filing
Management said there may be short-term margin pressure but expects to sustain EBITDA margins around 15% plus long-term.
Answered by Atul Aggarwal
Asked by Vanshi Shah: What margin moderation should be expected from current 15% levels given cost pressures, and what is the sustainable steady-state margin?
p. 12
“there may be a short-term pressure on our margin structure. But long-term, our steady-state margins, like I've been saying in calls over the last few quarters as well. We are confident that we'll be able to maintain our EBITDA margins around 15% plus.”
Atul Aggarwal, page 12 of the filed PDF · View the filing
Management indicated current capacity supports about Rs 800 crores revenue, rising to Rs 900-1,000 crores with new capex, with asset turns around 1.8-2x.
Answered by Atul Aggarwal
Asked by Madhur Rathi: What asset turns and revenue potential are expected from the Rs 75 crore fastener capex?
p. 13
“our current -- based on the current capex we have -- current capacities we have, we can do a revenue of about INR800-odd crores, INR800 crores plus with the capex we are doing this year”
Atul Aggarwal, page 13 of the filed PDF · View the filing
Management said they will start as sole supplier, with customers potentially adding a second source once volumes scale up.
Answered by Jaideep Wadhwa
Asked by Madhur Rathi: For OBC and DC/DC components, will Sterling be a single source supplier to OEMs?
p. 13
“To start with, we will be 100%. That's typically the way it goes.”
Jaideep Wadhwa, page 13 of the filed PDF · View the filing
Risks flagged
Steel and energy cost inflation impacting near-term margins
p. 4
“While steel and energy prices have witnessed inflationary pressures in recent months and near-term impact could flow into Q1 FY27, we remain focused on mitigating the impact through operational efficiencies, value engineering, disciplined cost management and pass-through arrangements.”
Atul Aggarwal, page 4 of the filed PDF · View the filing
Slower-than-expected EV adoption pushing back business timelines
p. 4
“the broader EV opportunity time line has shifted by nearly 3 to 5 years.”
Atul Aggarwal, page 4 of the filed PDF · View the filing
West Asia crisis and related crude oil, commodity, currency and shipping disruptions
p. 3
“uncertainties arising from the West Asia crisis, particularly around crude oil prices, commodity inflation, currency fluctuations and potential disruptions in global shipping routes remain key monitorable factors for the automotive sector.”
Atul Aggarwal, page 3 of the filed PDF · View the filing
Bad debt provision taken due to customer collection risk at subsidiary
p. 6
“We have, however, taken a provision -- a bad debt provision in line with prudent accounting standards, even though we think there's a high chance of -- there's a high probability of recovering the dues just to be -- just to, like I said, be very prudent in our financial statements.”
Jaideep Wadhwa, page 6 of the filed PDF · View the filing
SEM business not expected to be profitable in FY27
p. 9
“we will not be profitable in FY27.”
Jaideep Wadhwa, page 9 of the filed PDF · View the filing
EV and non-EV business investments remain value/margin dilutive in near-term
p. 8
“Currently, they are all value decretive. But we are not looking for the short-term.”
Atul Aggarwal, page 8 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.