SUNDRMFAST - Sundram Fasten.

📊 NSE: SUNDRMFAST 🏢 Auto Ancillaries 📅 Last Updated: 12/14/2025 13:51

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 16% in fiscal 2023 to approximately INR 4,900 Cr, but remained flattish in fiscal 2024 at INR 5,700 Cr. For H1 FY26, the company reported revenue of INR 2,723 Cr, with domestic segment growth of 12% YoY in Q2 FY26. The wind energy segment demonstrated strong growth of 30-35% H1 to H1.

Geographic Revenue Split

Domestic sales (including OEMs and aftermarket) account for approximately 70% of revenue, while exports contribute 30%. Within the total revenue pie, exports specifically represent 26-27%.

Profitability Margins

Operating profitability averaged 16-18% during fiscals 2019-2024. Margins moderated to 15.5% in fiscal 2023 due to steep increases in raw material and freight costs, recovering to 15.7% in 9M FY24. PAT for H1 FY26 reached INR 278 Cr, the highest in company history.

EBITDA Margin

EBITDA margins are estimated at ~16% for fiscal 2025 and are expected to sustain at 15.5-16.0% in fiscal 2026, despite potential impacts from US tariffs.

Capital Expenditure

The company undertook capex of INR 230-250 Cr in fiscal 2024 and plans annual capex of ~INR 350 Cr over the medium term. Specific investments include INR 100 Cr already executed for wind energy expansion and an additional INR 80 Cr planned for the next fiscal year.

Credit Rating & Borrowing

CRISIL reaffirmed its 'A1+' rating on the INR 25 Cr short-term debt and INR 100 Cr commercial paper. Bank limits of INR 1,800 Cr are utilized at a modest 15-23% average.

⚙️ Operational Drivers

Raw Materials

Steel is the principal raw material, representing a significant portion of the cost structure. Other costs include energy and freight.

Import Sources

Steel is primarily sourced from the domestic market, where prices softened in fiscal 2025 compared to the previous year.

Capacity Expansion

Current expansion is focused on the Sri City facility and wind energy fasteners, with a total planned investment of INR 180 Cr (INR 100 Cr executed + INR 80 Cr planned) to meet rising demand.

Raw Material Costs

Raw material costs rose sharply in fiscal 2023, causing margins to slip from 16.7% to 15.5%. The company mitigates these risks through alternate supplier identification and yield improvement projects.

Manufacturing Efficiency

The company utilizes established supply chain logistics and overseas manufacturing units to cater to customers on a 'just-in-time' basis.

Logistics & Distribution

Distribution is managed on a just-in-time basis to optimize client supply chains.

📈 Strategic Growth

Expected Growth Rate

4-5%

Growth Strategy

Growth will be driven by a shift in product mix toward high-margin products like hubs, shafts, and EV components. The company is also expanding into wind energy (30-35% growth), aerospace fasteners, and new segments like stainless steel and railway fasteners expected to contribute within 12 months.

Products & Services

Fasteners (automotive, wind energy, aerospace, industrial), hubs, shafts, EV components, sintered products, and cold/warm forged components.

Brand Portfolio

Sundram Fasteners (SFL).

New Products/Services

New product revenue (from products developed in the last 3 years) constitutes over 20% of total revenue. Upcoming launches include stainless steel and railway fasteners.

Market Expansion

Targeting the wind energy segment (domestic and export) and the EV component market to diversify away from traditional fasteners.

Market Share & Ranking

SFL dominates the domestic fasteners market with a sizeable market share.

Strategic Alliances

Recent activity includes the merger of wholly owned subsidiaries Sunfast TVS Ltd and TVS Engineering Ltd into SFL in fiscal 2024.

🌍 External Factors

Industry Trends

The industry is shifting toward Electric Vehicles (EV) and renewable energy. SFL is positioning itself by increasing the share of EV components and wind energy fasteners in its portfolio.

Competitive Landscape

Key competitors in the wind energy segment include Randag and Coopers.

Competitive Moat

SFL's moat is built on its leading market position, diverse product portfolio, and credibility in quality and reliability, which allows it to scale with major global OEMs.

Macro Economic Sensitivity

Revenue growth is sensitive to domestic OEM demand, which was modest in fiscal 2025 across key automobile segments.

Consumer Behavior

Shift toward sustainable energy and EVs is driving demand for specialized fasteners and critical components like hubs and shafts.

Geopolitical Risks

Geopolitical risks include US trade barriers, specifically the 10-25% tariffs expected to impact exports starting in fiscal 2026.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to international trade regulations, including US import tariffs of 10-25% affecting the export segment.

Environmental Compliance

SFL maintains an ESG profile that supports its strong credit risk profile.

Legal Contingencies

The company reported no instances of non-compliance, penalties, or strictures imposed by SEBI or stock exchanges regarding capital markets in the last three years.

⚠️ Risk Analysis

Key Uncertainties

Key risks include volatility in steel prices, US tariff implementations, and potential demand fluctuations from major automotive OEMs.

Geographic Concentration Risk

70% of revenue is concentrated in the domestic Indian market.

Third Party Dependencies

35% revenue dependency on the top 5 customers (Cummins, GM, Maruti, Mahindra, Tata Motors).

Technology Obsolescence Risk

The shift from Internal Combustion Engines (ICE) to EVs poses a risk to traditional fasteners, which SFL is mitigating by developing EV-specific components.