STSterling Tools530759Quarterly results

Q2 & H1 FY27 call: record revenue, input-cost pressure on profit, capex raised

Highest ever quarterly and half-yearly stand-alone revenue.

By ScoutQuest · Mon 2 Nov 2026, 3:30 PM IST · 2 min read

Stand-alone Revenue Growth Q2 FY27

up around 32% YoY in Q2 FY27, ahead of the broader auto industry

H1 EBITDA

INR58.7 crores (+17% YoY)

Q2 PAT

INR13.6 crores vs INR19.8 crores

This is the transcript of the earnings call held to discuss the second quarter and first half of FY27. Management covered revenue, margins, the newer businesses and capital spending plans.

Revenue ran ahead of the industry

• On a stand-alone basis, revenue grew around 32% year on year in Q2 FY27, faster than the broader automobile industry.
• Management described it as the highest ever quarterly and half-yearly stand-alone revenue.
• The main driver was strong traction in the commercial vehicle segment, including high volumes from a marquee customer, along with efforts to spread across more vehicle segments.

Profitability and the reason for the dip

• Q2 FY27 EBITDA was INR27.7 crores, up around 8% year on year, while H1 EBITDA rose 17% to INR58.7 crores, which management called the highest ever half-yearly EBITDA.
• Profit after tax for Q2 FY27 was INR13.6 crores, against INR19.8 crores in Q2 FY26.
• Two things explain the gap: the year-ago quarter carried an exceptional gain of INR9.5 crores, and margins were under pressure from higher input costs.

Why margins are compressed

• Most of the earlier low-cost inventory was used up in Q1, so the cushion from cheap raw material is gone.
• Commodity and non-commodity input costs have risen significantly amid the ongoing West Asia conflict.
• Pricing arrangements with vehicle makers allow input cost increases to be passed through, but the recovery comes with a time lag, which temporarily dents margins.

Newer businesses: SEM and STML

• Sterling E-Mobility Solutions (SEM) reported revenue of approximately INR23 crores in Q2 FY27. Growth came from higher volumes and new customer additions, with encouraging progress in commercial vehicle and light commercial vehicle segments.
• Production lines for onboard chargers and multifunction units, scheduled for commissioning in Q2, have been commissioned as planned.
• At Sterling Tech-Mobility (STML), commercial supplies of high-voltage DC contactors and relays, earlier scheduled to begin in Q2 FY27, have now commenced. Management called this a move from development to commercial execution.

Capital spending plans

• The company has already spent a part of its fasteners capex plan and has raised the total fasteners capex range.
• Overall FY27 capex across fasteners, DC contactors and MCUs is now planned at about INR150 crores.

What management expects going forward

• Margins are expected to improve over the coming quarters as the higher input costs are progressively recovered, subject to input price movements and the broader operating environment.
• Priorities for SEM: higher volumes, a broader customer base and a stronger position in higher-value electric mobility solutions.
• Priorities for the core fasteners business: customer diversification, planned capacity investments and operational execution.
• The company also introduced Amit Dhadda as its new Chief Financial Officer, noting nearly three decades of experience across finance, taxation, audit and corporate reporting.

Points a retail investor may want to track

• The pace at which input-cost pass-through shows up in margins.
• Volume ramp-up in SEM and the commercial supply of DC contactors at STML.
• Progress on the announced capex and how it is funded.

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