SUPRAJIT - Suprajit Engg.

📊 NSE: SUPRAJIT 🏢 Auto Ancillaries 📅 Last Updated: 12/14/2025 13:52

💰 Financial Performance

Revenue Growth by Segment

Suprajit Controls Division (SCD, excluding SCS) operational revenue grew 7% YoY in Q2 FY26. SCS operational revenue also grew by approximately 7% YoY. Phoenix Lamps Division (PLD) experienced a revenue decline, though specific percentage was not disclosed. Overall Q1 FY26 revenue grew 17.4% YoY to INR 862.9 Cr.

Geographic Revenue Split

The company operates a global footprint with manufacturing in India, US, Europe, China, Brazil, and South-East Asia. No single customer accounts for more than 10% of total revenue, indicating high geographic and client diversification.

Profitability Margins

Consolidated operating margins were 10.2% in FY25 and 9.5% in Q1 FY26. SCD (excluding SCS) achieved a 14% margin in Q2 FY26, reaching the higher end of management guidance. Phoenix Lamps margins contracted from 15% to 12.7% YoY.

EBITDA Margin

Consolidated EBITDA margin stood at 10.2% for FY25. SCD operational EBITDA grew 50% YoY in Q2 FY26 with an 11.6% margin. Management targets a long-term margin of 12-14% excluding the SCS segment.

Capital Expenditure

Completed capacity expansion at the Chakan plant with a new building dedicated to the passenger vehicle segment. Total cash and liquid investments stood at INR 393 Cr as of March 31, 2025, despite inorganic investments and share buybacks.

Credit Rating & Borrowing

Maintains a strong financial profile with a net gearing of 0.3 times and net debt/OPBDITA of 1.4 times as of March 31, 2025. Borrowing costs are minimized by a healthy liquidity position of INR 256.8 Cr in mutual funds and bonds.

⚙️ Operational Drivers

Raw Materials

Steel wires, plastic resins, and rubber for cables; rare earth elements for electronics and sensors (representing a significant cost and supply risk); and halogen components for lamps.

Import Sources

China (rare earth elements), Germany (restructuring of operations), Mexico (Juarez, Matamoros), and USA (Brownsville).

Capacity Expansion

Chakan plant expansion completed for Passenger Vehicles. Restructuring involves closing the Juarez (Mexico) facility and strengthening Matamoros and Brownsville operations to optimize North American production by December 2025.

Raw Material Costs

Raw material costs are impacted by rare earth export restrictions and tariff-related uncertainties. Most tariff costs are being passed through to customers, while others are reflected in the 10.2% operating margin.

Manufacturing Efficiency

Restructuring in Germany involves reducing headcount with separation costs of EUR 1.1 million to 1.2 million to improve long-term operational efficiency. SCS is expected to reach EBITDA breakeven by Q4 FY26.

Logistics & Distribution

Impacted by shipping congestion in Europe; however, nearshore facilities in Mexico and Hungary mitigate long-distance logistics risks for US and European OEMs.

📈 Strategic Growth

Expected Growth Rate

5-10%

Growth Strategy

Growth will be achieved by outperforming the global industry (1-3% growth) by 5-10% through new program introductions in the Controls Division, premiumization via the Tech Center (Actuation, Electronics, Braking), and integrating the SCS acquisition to reach EBITDA breakeven by Q4 FY26.

Products & Services

Control cables (speedometer, throttle), halogen lamps, actuators, electronics, sensors, Combi Brake Systems (CBS), MDBS, and levers.

Brand Portfolio

Suprajit, Phoenix Lamps, Suprajit Controls Division (SCD), SCS, and Blubrake (investment).

New Products/Services

Mechanical Disc Brake System (MDBS), ABS (under development), and hydraulics. New braking projects are expected to ramp up in H2 FY26.

Market Expansion

Expansion into the e-bike and advanced braking market through an investment agreement with Blubrake S.p.A. signed on November 18, 2025.

Strategic Alliances

Investment agreement with Blubrake S.p.A. (Italy) to enhance braking technology capabilities.

🌍 External Factors

Industry Trends

The industry is shifting toward EVs, but Suprajit's cable products are drivetrain-agnostic. There is a trend toward premiumization in braking (CBS/ABS) and electronics, where the company is actively investing.

Competitive Landscape

Competes with global cable and lamp manufacturers; however, the bankruptcy of competitor Marelli provides potential market share gain opportunities for Phoenix Lamps.

Competitive Moat

Moat is built on being the lowest-cost actuation provider, long product validation cycles that prevent vendor switching, and a unique global manufacturing footprint that reduces tariff risks.