Harsha Engineers International (HARSHA) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 performance was flat overall, with persistent challenges in Europe and the US, while India saw higher single-digit growth driven by bronze bushings and stamping segments; margins compressed due to lower operating margins in Engineering.

• Engineering segment revenue grew 8.8% year-over-year but declined 2.6% sequentially; bronze bushing business showed strong growth, while Japan, Stampings, and large Bearing Cage segments remained rangebound.

• China operations were subdued due to year-end destocking and softer demand, but YTD performance was satisfactory.

• Board approved unaudited standalone and consolidated results for the quarter and nine months ended December 31, 2024; auditors issued unmodified review reports.

Financial highlights

• Consolidated Q3 FY25 revenue from operations was ₹33,894 lakh, up from ₹32,445 lakh in Q3 FY24; nine-month revenue reached ₹1,03,468 lakh, up from ₹1,01,190 lakh year-over-year.

• Q3 FY25 EBITDA was ₹4,949 lakh (margin 14.6%), down from ₹5,392 lakh in Q2 FY25; nine-month consolidated EBITDA was ₹16,648 lakh (margin 16.09%).

• Q3 FY25 PAT was ₹2,669 lakh (PAT margin 7.9%), compared to ₹2,896 lakh in Q2 FY25; nine-month PAT was ₹9,170 lakh (PAT margin 8.9%).

• Standalone Q3 FY25 revenue was ₹26,804 lakh, up from ₹25,884 lakh in Q3 FY24; standalone PAT was ₹3,099 lakh.

• Basic and diluted consolidated EPS for Q3 FY25 was ₹2.93; for nine months, ₹10.07.

Outlook and guidance

• The company expects FY25 top line to be flat, but bottom line growth to be higher, in line with the current run rate.

• Expectation of improved demand in India in Q4 as inventory destocking at MNC customers ends; new product development in India remains strong.

• Anticipates additional business from a major global customer starting H2 FY26; bronze bushing segment expected to exceed ₹8,000 lakh in FY25, with long-term potential to reach ₹20,000–30,000 lakh annually.

• At least 20% growth targeted in bushings for FY26; domestic cage business expected to resume 8–10% annual growth after Q4.

• Long-term consolidated EBITDA margin target is 17–18%, up from current 14–16%.