Suprajit Engineering Limited Q3 FY26 Earnings Call Summary

Summary

Suprajit Engineering Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 10, 2026 11:30 AM

Event Participants

Executives 4 Ajith Kumar Rai (Founder & Chairman), Akhilesh Rai (Director & Chief Strategy Officer), Medappa Gowda J (CFO & Company Secretary), N.S. Mohan (MD & Group CEO)

Analysts 7 Amit Hiranandani, Chirag Shah, Gokul Maheshwari, Jaiprakash Toshniwal, Jinal Sheth, Nandan Pradhan, Saurabh Shroff

Financials & KPIs (9 Months Ended Dec 31, 2025)

Geographic & Segment Commentary

• Suprajit Controls Division (SCD): Revenue grew 13.7% despite flat global auto volumes, outperforming the industry through new program launches. EBITDA was impacted by $2 million in onetime costs related to the Juarez-to-Matamoros plant relocation and labor restructuring. Management expects margin normalization as tariff recoveries from U.S. customers (delayed by timing) flow through in subsequent quarters.
• Domestic Cable Division (DCD): Revenue grew 9%, slightly ahead of the 8% domestic industry growth. Growth was driven by the aftermarket and “beyond cable” products like braking systems. Management noted a reduction in cable content per vehicle in certain EV segments, which acted as a slight growth drag.
• Suprajit Electronics Division (SED): Recorded robust 20% growth with EBITDA margins improving significantly to 11.2%. Growth is driven by the ramp-up of new contracts for digital clusters and plotters. Supply chain risks regarding memory chip shortages are being mitigated through sourcing diversification.
• Phoenix Lamps Division (PLD): Performance remained muted due to a sharp reduction in exports to the Middle East and counterfeit competition in the Indian aftermarket. A “last man standing” strategy is expected to pay off as global competitors face insolvency. Management expects a brighter outlook for FY27 as new inquiries from Europe and the U.S. materialize.

Company-Specific & Strategic Commentary

• SCS Integration & Turnaround: Restructuring of the Stahlschmidt Cable Systems (SCS) assets is substantially complete, including the tool room relocation from Germany to Morocco. Management reaffirmed that SCS will be EBITDA positive by the end of Q4 FY26.
• System Provider Transition: The company is moving from supplying individual braking components to becoming a “systems provider” for hydraulic brakes and ABS. This strategy aims to provide OEMs with integrated solutions for haptics, noise, and performance, with commercialization expected in FY27.
• Global Footprint Optimization: Consolidating leadership under a single European Operations Head (Neil Collis) and integrating 16 domestic plants onto SAP by April 2026. This is aimed at improving operational discipline and global supply chain synergy.
• Strategic Investments: Completed a €1 million investment in Blubrake Italy to secure innovative ABS technology. The Chuhatsu JV is also gaining traction with RFQs from major Japanese OEMs for both domestic and export markets.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Global Trade Framework (Chirag Shah)

• Question: How does the new India-U.S. and India-EU trade framework benefit Suprajit?
• Answer: While fine prints are awaited, certain U.S. tariffs may drop toward 0% under “Tariff-Related Quotas.” The removal of the 25% headline tariff uncertainty allows supply chain managers to resume strategic purchasing (Ajith Kumar Rai).

SCD Onetime Costs (Jaiprakash Toshniwal)

• Question: What were the specific onetime hits in the Controls division this quarter?
• Answer: Approximately $2 million (₹18 crores) was booked due to the Matamoros labor restructuring (moving from 40 to 48-hour weeks), severance costs, and expedited shipments during the Juarez relocation (Ajith Kumar Rai).

Braking System Strategy (Amit Hiranandani)

• Question: What is Suprajit’s USP in the competitive ABS and braking market?
• Answer: Suprajit is positioning as a “systems provider” rather than a component supplier. By managing everything from the lever and hydraulic hose to the friction material, they take full responsibility for “haptic feedback” and stopping performance (N.S. Mohan).

Phoenix Lamps Recovery (Amit Hiranandani)

• Question: When will Phoenix Lamps margins and revenues stabilize?
• Answer: The division is benefiting from being the “last man standing” as competitors go bust. New inquiries from Europe and a large U.S. “big box” retailer are expected to drive a much stronger FY27 (N.S. Mohan/Ajith Kumar Rai).

Key Takeaway

Suprajit Engineering delivered a resilient Q3 FY26, characterized by steady 8% revenue growth (excluding SCS) and a successful strategic pivot toward electronics and integrated braking systems. While consolidated margins were temporarily weighed down by ₹18 crores in onetime restructuring costs in the Controls division and timing issues related to U.S. tariff recoveries, the underlying operational performance remained robust with 13.7% growth in international volumes. The Electronics division emerged as a high-growth engine with 20% revenue increases and double-digit margins (11.2%). Strategic restructuring of the SCS acquisition is now largely complete, positioning the unit to reach EBITDA breakeven by Q4 FY26. Looking ahead, management is focused on capitalizing on the new India-U.S. trade clarity and scaling “beyond cable” products, though they remain watchful of EV-driven cable reduction and global geopolitical volatility. Combined with an increased dividend, the company signals strong confidence in its global turnaround and integrated systems strategy.