Summary
Shriram Pistons & Rings Limited - Q3 FY26 Earnings Call Summary Tuesday, February 03, 2026 4:00 p.m.
Event Participants
Executives 3 Krishnakumar Srinivasan (MD & CEO), Pankaj Gupta (DED, Head Legal & Co. Secretary), Prem Rathi (ED & CFO)
Analysts 8 Anubhav (Prescient Capital), Chirag Jain (Emkay Global), Divyansh Gupta (Latent PMS), Harsh (Individual Investor), Harsh Shah (Seven Rivers Holding), Karan Gupta (ACMIIL), Radha (B&K Securities), Raman KV (Sequent Investments), Ravi Purohit (SIMPL), Viraj (SIMPL)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income (Consol) | ₹828.69 crores | +21% YoY; Highest ever quarterly income driven by broad-based demand across all segments. |
| EBITDA (Consolidated) | ₹157.45 crores | +21% YoY; Growth driven by operating leverage, cost optimization, and strong subsidiary performance. |
| PBT (Before Exceptional) | ₹127.36 crores | +22% YoY; Reflects robust operational efficiency across legacy and new business lines. |
| Exceptional Items | ₹25.2 crores | Onetime statutory impact due to the introduction of new Labour Codes in November 2025. |
| PAT (Consolidated) | ₹76.24 crores | +6.4% YoY; Growth tempered by the one-time exceptional labor code expense. |
| Interim Dividend | ₹5 per share | 50% of face value approved by the Board to reward shareholders. |
Geographic & Segment Commentary
- Subsidiaries (New Business): These now contribute over 35% of consolidated revenue following the Antolin acquisition. Precision plastics (Takahata, TGPEL) and electric motors (EMFI) are seeing record outputs, with EMFI growing 5x-7x YoY.
- Legacy Business (Pistons/Rings/Valves): Reported strong growth in PV and CV segments (+20% YoY) and 2-wheelers (+17%). Management is focusing on high-margin SKUs and “last man standing” strategy in ICE components as global competitors vacate the space.
- International Markets: Exports grew despite geopolitical tensions; the company is gaining traction in North America and expanding into niche segments like marine, snowmobiles, and railway engines.
Company-Specific & Strategic Commentary
- Grupo Antolin Acquisition: Completed 100% acquisition of three Indian entities for ₹1,670 crores (EUR 159M) on a debt-free basis. This adds interior and electronic lighting solutions (headliners, door panels, ambient lighting) and diversifies the portfolio into powertrain-agnostic products.
- Corporate Rebranding: Proposed name change to “SPR Auto Technologies Limited” to reflect the shift from a component-specific manufacturer to a diversified automotive technology player.
- Capacity Expansion: Signed an asset purchase agreement with Sunbeam Lightweighting (Craftsman Automation) for ₹28 crores to acquire piston manufacturing lines, ensuring capacity to meet surging demand.
- EV Infrastructure: Inaugurated a new state-of-the-art facility in Coimbatore for electric motors and controllers; production has scaled to include platforms up to 300kW.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Mix | >35% Powertrain-Agnostic | Post-Antolin consolidation, the revenue share from non-ICE products is expected to sustain above this level. |
| Growth Target | Outperform Industry | Management expects to exceed industry growth (8%) by delivering ~12%+ growth in legacy segments through market share gains. |
| Debt Repayment | Within 2 years | The ₹1,000 crore NCD raise for the Antolin acquisition is intended to be paid off “as soon as possible” within the 2-year tenure. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Costs | The ₹25.2 crore exceptional hit from the new Labour Codes highlights potential margin volatility from changing Indian statutory norms. |
| Product Mix Shifts | A shift toward small cars (driven by GST reforms) lowers the average kit value per vehicle compared to larger SUVs/Sedans. |
| Raw Material Lag | Input cost transmissions occur with a one-quarter lag due to pipeline inventory, creating short-term margin pressures during price hikes. |
Q&A Highlights
Core Business Growth
- Question: Why is standalone revenue growth lagging slightly behind industry production numbers? (Anubhav)
- Answer: Production lagged sales in Oct/Nov due to high OEM inventory clearing. Growth was also affected by a mix shift toward small cars which have lower unit value, though market share remained intact (Krishnakumar Srinivasan).
M&A Strategy
- Question: Will the large Antolin acquisition stop further M&A activity? (Ronak)
- Answer: No, the company remains underleveraged and will continue to look for value-accretive acquisitions to grow the franchise (Krishnakumar Srinivasan).
Antolin Integration & ROCE
- Question: Will the Antolin acquisition be ROCE dilutive to the group? (Ravi Purohit)
- Answer: Initial internal projections suggest that management can bring the Antolin assets to par with the company-level ROCE within 2-3 years (Krishnakumar Srinivasan).
Aftermarket Dynamics
- Question: How has the GST reduction from 28% to 18% impacted the aftermarket? (Anubhav)
- Answer: While it initially caused a lull as distributors liquidated high-tax stock, it is now driving a shift toward organized players like SPR due to improved affordability and quality requirements (Krishnakumar Srinivasan).
Key Takeaway
Shriram Pistons & Rings delivered a landmark quarter, achieving record total income of ₹828.69 crores (+21% YoY) and successfully closing the ₹1,670 crore acquisition of Antolin’s Indian entities. This strategic pivot significantly diversifies the company, with powertrain-agnostic products now exceeding 35% of consolidated revenue. Despite a ₹25.2 crore onetime hit from new labor codes, the company maintained strong profitability through operating leverage and a focus on high-margin product segments. Strategically, the proposed name change to SPR Auto Technologies Limited signals a transition toward a tech-heavy, diversified auto-component major. Management remains optimistic about the future, underpinned by a 12%+ growth outlook in legacy businesses and rapid scaling of the EV motor segment, aiming to capitalize on both the “last man standing” opportunity in ICE and the aggressive transition to electric mobility.
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