Sandhar Technologies (SANDHAR) Q2 24/25 earnings summary

Executive summary

• Consolidated total income grew 11.5% quarter-over-quarter and 10.9% year-over-year for H1FY25, reaching ₹1,907 crores, with EBITDA up 22-24% and PAT up 41-55% YoY in Q2 and H1 FY25.

• EBITDA margin improved to 10.6% in Q2FY25 from 9.5% in Q2FY24, and to 10.2% in H1FY25 from 9.3% in H1FY24.

• Joint ventures showed strong performance, with six out of seven now PAT positive; overseas Romania plant expected to break even by year-end.

• Standalone revenue increased 9% YoY in Q2 FY25 and 7% YoY in H1 FY25, with EBITDA up 29% and 19% respectively.

• New expansion projects in Pune and a new EV component facility in Haryana are set to commence production by January 2025; EV arm started commercial production of battery chargers.

Financial highlights

• Revenue guidance for FY25 is INR 4,000-4,100 crores, with FY26 targeted at INR 4,500-4,600 crores.

• EBITDA margin guidance is 10.45% for FY25, targeting 11-11.5% in FY26.

• Subsidiaries contributed INR 482 crores in H1FY25; Sandhar Engineering doubled income YoY to INR 192 crores at 7% EBITDA margin.

• Overseas operations generated INR 234 crores at 10.98% EBITDA margin in H1FY25.

• Operating cash flow for H1 FY25 was ₹163 crores consolidated and ₹101 crores standalone.

Outlook and guidance

• Confident of outperforming industry growth due to new business additions and spare capacity; expect 60% of annual revenue in H2.

• Margin improvement of 50 basis points expected annually; new product launches and capacity ramp-up to drive growth.

• EV product lines (motor controllers, battery chargers, DC-DC converters) are in advanced readiness, with mass production for key components scheduled between Dec 2024 and Apr 2025.

• Management expects continued growth in upcoming quarters, focusing on operational efficiency and free cash flow generation.