💰 Financial Performance

Revenue Growth by Segment

Revenue from operations for FY2024-25 was INR 352.21 Cr, representing a marginal decline of 0.04% from INR 352.36 Cr in FY2023-24. Domestic OEM revenues are heavily driven by the Commercial Vehicle (CV) segment, while exports contributed 41% of total revenue in 9M FY2025. The company reported an operating income of INR 256.8 Cr for 9M FY2025.

Geographic Revenue Split

Domestic sales account for approximately 59% of revenue, while exports contribute 41% as of 9M FY2025. Within exports, the United States is a critical market, accounting for approximately 25% of total company revenue in 9M FY2025, up from 19% in 9M FY2024.

Profitability Margins

Operating Profit Margin declined from 4.19% in FY2023-24 to 2.86% in FY2024-25. Net Profit Margin also saw a significant reduction, falling from 3.25% to 1.73% over the same period, primarily driven by decreased profits and higher operational costs.

EBITDA Margin

Operating Profit Margin stood at 2.86% for FY2024-25, a YoY decrease of 133 basis points from 4.19%. Profitability was impacted by a loss before tax of INR 3.61 Cr for the half-year ended September 30, 2025, compared to a profit of INR 3.39 Cr in the previous year's corresponding period.

Capital Expenditure

The company has planned a capital expenditure of INR 20.0 Cr for FY2026, which is intended to be funded partly through debt. Maintenance capex for FY2027 is expected to be minimal and funded through internal accruals.

Credit Rating & Borrowing

ICRA reaffirmed the long-term rating at [ICRA]BBB+ (Stable) and short-term rating at [ICRA]A2. The company faces moderate coverage metrics with an interest coverage ratio of 2.52x in FY2024-25 (down from 4.43x) and a Total Debt/OPBDITA of 3.7x as of December 31, 2024.

⚙️ Operational Drivers

Raw Materials

Asbestos-free friction materials (including brake linings, disc pads, and clutch facings) and rivets. Cost of materials consumed was INR 177.59 Cr in FY2024-25, representing 50.4% of total revenue.

Capacity Expansion

Current capacity is not specified in units; however, the company is scaling up new product lines introduced in FY2024 with a planned INR 20 Cr investment in FY2026 to support growth.

Raw Material Costs

Raw material costs stood at INR 177.59 Cr in FY2024-25, a decrease of 4% from INR 184.99 Cr in FY2023-24. Procurement strategies involve managing a moderate scale of operations while navigating global supply chain fluctuations.

Manufacturing Efficiency

Manufacturing efficiency is reflected in the Inventory Turnover Ratio, which improved slightly from 7.30 times in FY2023-24 to 7.40 times in FY2024-25.

📈 Strategic Growth

Expected Growth Rate

3-5%

Growth Strategy

Growth is targeted through the scale-up of new product lines introduced in FY2024, diversification into the non-CV segment to reduce cyclicality, and revenue improvement measures. The company is also focusing on the domestic replacement market through established pan-India distributors.

Products & Services

Asbestos-free brake linings, disc pads, clutch facings, tractor linings, friction material for industrial applications, and rivets.

Brand Portfolio

TVS Brake Linings (marketed under the TVS brand heritage).

New Products/Services

New product lines were introduced in FY2024 with a planned scale-up in FY2025-26; specific revenue contribution percentages for these new lines were not disclosed.

Market Expansion

The company is pursuing material segment diversification into non-CV applications and expanding its presence in the domestic aftermarket to mitigate the 3-5% muted growth expected in the CV segment.

Strategic Alliances

Part of the T S Krishna Group (erstwhile TVS Group), providing strong financial flexibility and lender relationships.

🌍 External Factors

Industry Trends

The friction material industry is shifting toward asbestos-free products. The domestic CV segment is expected to grow at a modest 3-5% in FY2026, while the export outlook remains weak due to global trade barriers.

Competitive Landscape

Key competitors include Rane Brake Lining Limited, Masu Brakes Private Limited, and Hindustan Composites Limited, along with unorganized players in the replacement market.

Competitive Moat

Moat is based on the safety-critical nature of products, long lead times for product validation in the auto industry, and the 'TVS' group brand heritage. These factors provide moderate sustainability against unorganized competition.

Macro Economic Sensitivity

Highly sensitive to CV industry cyclicality, which is strongly correlated to GDP growth, industrial output, and infrastructure investments.

Consumer Behavior

Shift toward higher safety standards and regulatory compliance (emission norms and scrappage policies) is driving demand for high-quality friction materials.

Geopolitical Risks

Significant risk from US trade policy; the August 2025 tariff escalation to 60-70% total burden places SBLL at a disadvantage compared to Southeast Asian competitors.

⚖️ Regulatory & Governance

Industry Regulations

Operations are impacted by automotive emission norms, the national scrappage policy, and stringent safety standards for friction materials.

Taxation Policy Impact

The company follows Ind AS; specific tax rate impacts were not detailed beyond standard corporate tax applications.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the impact of US import tariffs on export volumes and margins, with a potential downward rating trigger if accruals do not improve. CV industry cyclicality remains a 100% inherent risk to domestic OEM revenue.

Geographic Concentration Risk

High concentration in the US market, which accounts for 25% of total revenue.

Technology Obsolescence Risk

Risk is mitigated by the company's focus on asbestos-free technology and new product line introductions.

Credit & Counterparty Risk

Trade receivables stood at INR 14.71 Cr for the half-year ended September 2025. Liquidity is supported by INR 54 Cr in unutilized working capital lines.