Summary
Shivalik Bimetal Controls Limited - Q3 FY2026 Earnings Call Summary Friday, February 6, 2026 3:00 PM IST
Event Participants
Executives 2 Mr. Rajeev Ranjan (CFO), Mr. Sumer Ghumman (Whole-time Director)
Analysts 8 Akash Vora, Bhargav Bhuddadev, Dhruv Jain, Het Shah, Nikhil Poptani, Nirma Mehta, Prateek Chaudhary, Richa Agarwal, Soham Dengra
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Q3) | ₹[Not Specified] | +9% YoY; growth sustained despite US tariff disruptions. |
| Revenue (9M) | ₹[Not Specified] | +9% YoY; management noted 9M volume growth was 3% YoY. |
| EBITDA Margin | 24%+ | +400 bps YoY; driven by improved product mix and supplies of high-value components. |
| Shunt Volume Growth | 9.5% | 9M performance; reflects resilience in the resistor business segment. |
| Bimetal Volume Growth | 5% | 9M performance; impacted by a relatively flat domestic switchgear market. |
| Component Mix | 63-64% | Share of revenue from finished components vs. ~37% from strip/raw material. |
| Net Working Capital | 250-260 days | Increased due to early inventory landing and 10-day increase in collection period (now <90 days). |
Geographic & Segment Commentary
- USA: Performance was impacted by temporary 50% tariffs on Indian imports, leading to reduced ordering. However, management noted tariffs accelerated the transition from low-value “strip” exports to high-value “components,” which are expected to drive growth in Q4 and FY27.
- India (Bimetal): Performance remains tied to the domestic switchgear and MCB market, which has been flat. Growth is being sought through R&D into new bonding applications beyond traditional switchgear to reduce reliance on market cycles.
- Rest of Asia: Business continues to grow independently of US tariff issues. White-label agreements with partners like Vishay are being used to service Asian customers directly, improving logistics and timeline efficiency.
Company-Specific & Strategic Commentary
- Forward Integration (Pune Facility): The Board approved a new rented facility in Pune for automotive busbars and connectors. The project involves ₹20 crore capex, targeting e-mobility and energy storage, with production starting in Q1 FY27.
- Value Chain Migration: Management is shifting from supplying raw welded strips to complex sub-assemblies. In EV applications, content per vehicle is expected to rise from ₹100-400 (components) to ₹2,000-3,000 (assemblies).
- New Product Verticals: Development is underway for precision automotive fuses (using EB welding for lower melting point joints) and automotive inductors to diversify the electronics application portfolio.
- Operational Efficiency: Shivalik is leveraging its 30-year expertise in Electron Beam (EB) welding as a high entry barrier, as no other domestic competitor currently possesses this scaled capability for shunt and busbar manufacturing.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Assembly Revenue | ₹70-75 crores (FY27) | Targeted to scale to ₹250-300 crores by FY29 across 4-5 major projects. |
| Shunt Revenue Growth | 14% to 19% (FY27) | Expected baseline growth driven by US recovery and new Japanese customers like Denso. |
| Bimetal Revenue Growth | 8% to 10% (FY27) | Baseline expectation assuming moderate recovery in domestic and US switchgear markets. |
| EBITDA Margin | 23% to 25% (Long-term) | Management expects to maintain this range despite lower margins in assembly, due to higher absolute volumes. |
| Working Capital | Reduction by March 2026 | Targeted through domestic RM sourcing and tripartite agreements for upfront payments. |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical/Tariffs | US Section 232 tariffs (50%) on copper/steel caused temporary volume suppression. While expected to drop to 18% post-March, any delay could hamper the US recovery. |
| Margin Dilution | The new assembly business has 8-10% lower EBITDA margins than the core component business. Scale and operating leverage must offset this to maintain corporate-level margins. |
| Raw Material Volatility | Silver price inflation impacted the silver contacts vertical. While most RM costs are pass-through, high inventory during price spikes creates transient margin pressure. |
Q&A Highlights
The Pune Busbar Opportunity
- Question: What is the scalability and asset turn for the ₹20 crore Pune capex? (Bhargav Bhuddadev)
- Answer: The ₹20 crore is incremental capex primarily for assembly lines; the expensive EB welding infrastructure already exists in the mother plants. This allows for a very high asset turn, targeting ₹250-300 crores in revenue within three years (Sumer Ghumman).
US Export Strategy
- Question: Will you shift back to strip exports once tariffs reduce? (Bhargav Bhuddadev)
- Answer: No. Strips fall under steel/copper categories and will always attract higher surcharges. The strategy is to permanently stick with components which offer higher value-add and lower tariff exposure (Sumer Ghumman).
EV Content and Competition
- Question: Who is the competition for the new busbar products? (Akash Vora)
- Answer: Currently, no Indian competitor performs EB welding at this scale. Most systems were previously imported; Shivalik is capturing the “Make in India” shift for the top two EV two-wheeler manufacturers (Sumer Ghumman).
Revenue Mix and Margins
- Question: How will the lower-margin assembly business affect the bottom line? (Het Shah)
- Answer: Assembly EBITDA is lower (roughly 12-13%), but topline value is 10x higher than standalone components. Total company EBITDA will be protected in the 23-25% range through volume and operating leverage (Rajeev Ranjan).
Key Takeaway
Shivalik Bimetal reported a resilient Q3 FY26 with 9% YoY revenue growth and significant margin expansion to 24%, despite severe tariff headwinds in the US market. The company is executing a strategic pivot from a component supplier to a sub-assembly partner, evidenced by the ₹20 crore investment in a Pune facility for EV busbars. This forward integration is expected to add ₹70-75 crores to FY27 revenue, scaling to ₹300 crores by FY29. Management successfully utilized the US tariff disruption to fast-track the conversion of strip exports into higher-margin components. While the new assembly business carries lower percentage margins, the substantial increase in per-vehicle content (up to ₹3,000 for EVs) provides a clear path for absolute earnings growth. Investors should monitor the successful commissioning of the Pune plant in Q1 FY27 and the normalization of working capital cycles, which management expects to improve by year-end.
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