Shriram Pistons & Rings Ltd (SHRIPISTON) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to SPR Auto Technologies Limited Q2 and H1 FY '27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an
Moderator: opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. Today from the management, we have with us, Mr. Krishnakumar Srinivasan, Managing Director and Chief Executive Officer; Mr. Prem Rathi, Executive Director and Chief Financial Officer; and Mr. Nilesh Jain, Head Legal and Company Secretary. Before we begin, let me remind you that this discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties, and other factors. It may be viewed in conjunction with the business risks that could cause future results, performance, or achievements to differ significantly from what is expressed or implied by such forward-looking statements. I now hand the conference over to Mr. Krishnakumar for his opening remarks, post which we will open the floor for an interactive Q&A session. Thank you, and over to you, sir.
Krishnakumar Srinivasan (Shriram Pistons & Rings Ltd): Yeah. Thank you, Anam. Good evening, everyone. Thank you for joining us for the Q2 and H1 FY '27 earnings call. We hope you have had the opportunity to go through the financial results, the investor presentation, and press release published on the stock exchanges and the company website. I am really pleased to share that SPR Autotech has delivered yet another quarter of strong growth. In Q2 FY '27, our consolidated total income grew by 61% year-on-year to ₹16,746 million and consolidated EBITDA grew by 29% to ₹3,004 million. For the first half, consolidated total income stood at ₹31,738 million, up 56%, with EBITDA of ₹5,831 million, up 28%. Now what makes this performance really noteworthy is the environment in which it was delivered. Through the quarter, the global economy continued to face tremendous geopolitical tensions, volatile commodity prices, supply chain disruptions, and elevated input costs. Our ability to keep growing through these headwinds reflects the strength of our diversified business model, the depth of our customer relationships, and the commitment of our team. I also want to underline that this growth has come from all our businesses, including the recent acquisitions of the three entities of Antolin in India. Our standalone business grew its total income by 17% year-on-year in Q2 to ₹10,500 million. Our core franchise continues to grow on its own strength, and the businesses we have added are building on top of it. The domestic automotive industry remained on a strong growth trajectory and was an important support to our performance. Passenger vehicles, commercial vehicles, two-wheelers, and three-wheelers all recorded their highest-ever Q2 sales. The weighted average industry production grew by almost 17%. When we take the two-wheelers with single-cylinder, the, you know, passenger cars with three cylinders, the big multi-commercial vehicles with six cylinders, etcetera, when we do the weighted average, the industry production has grown by over 60 17%. This demand has been broad-based, supported by the GST 2.0 reforms, resilient rural and urban consumption, improved financing, infrastructure-led activities, and healthy freight movement. Our strategy of investing in technology and capacity ahead of demand has allowed us to serve this increase seamlessly across all our customers and segments. This quarter is also a good moment to reflect on how far SPR has traveled from a pistons company to a multi-product franchise. Until about five years ago, we were a company of four legacy products: pistons, piston pins, piston rings, and engine valves. Today, SPR Group is a multi-product franchise spanning core engine components, high-precision injection-molded components, EV motors and controllers, and the automotive interior and lighting solutions. The powertrain-agnostic products now contribute more than 35% of our consolidated revenue, and near
Krishnakumar Srinivasan (Shriram Pistons & Rings Ltd): 60% of our business is relatively insulated from shifts in powertrain technology. Our new name reflects the broader transformation of the group into a more diversified mobility and advanced automotive solutions platform with each business contributing to its future growth. The legacy powertrain components business continues to outperform its end markets, supported by new program wins across alternative applications and additional piston capacity from the Sunbeam assets. High-precision injection molded components are gaining momentum from emerging applications such as ABS systems for two wheelers, supported by capacity expansion in Neemrana and Noida. The EV motors and controllers business continues to scale through our new Coimbatore facility and a growing customer base, while the automotive interiors and lighting businesses acquired from Antolin are delivering strong operational financial performance alongside successful integration and new customer wins. Importantly, new programs and customers across the group provide good visibility on future growth, while our continued focus on synergies, operating efficiencies, and integration is expected to support sustainable long-term value creation. Now coming to our profitability, our consolidated EBITDA margin for the quarter was 17.9%, which remains healthy for our industry. Margins were temporarily affected by factors that are largely external, including elevated commodity prices, elevated direct material costs like tools, oils, etc., a change in the sales mix, and the revision in the minimum wages. Commodity movements are usually passed through to our customers under a back-to-back arrangement with a lag of about a quarter. Given that a significant part of this impact is timing-related, we remain focused on areas within our control to drive greater operational efficiency and cost competitiveness. Our key initiatives include cost optimization, plant debottlenecking, and productivity improvements, affordable automation, and digitization of plants and processes, thereby streamlining the supply base and strengthening backward integration and optimizing inventory and logistics planning. We are also increasing the use of renewable power, including the new Power Purchase Agreement with SunSure for our Pathredi and Neemrana facilities, which is expected to support further optimization of energy costs. Coming to the bottom line, the elevated finance costs by ₹234 million quarter 2 FY '27 and ₹486 million for for the first half FY '27, to fund the acquisition of the three Indian entities of Antolin, had a temporary effect, which shall be normalized once the debt is repaid. Excluding this impact, PBT grew by 23% in Q2 of FY '27 and 22% in H1 of FY '27. Thus, our businesses continue to generate strong cash, which allows us to fund working capital for higher volumes and to continue investing in capacity and newer technologies ahead of demand, apart from doing more M&A possibilities, looking at more M&A possibilities. Most of our capacity expansions are backed by firm business orders from all our customers, including aftermarket and export customers. During the quarter, we also completed a Qualified Institutional Placement of ₹10,000 million. The strong participation from marquee domestic and global institutions reflects the broader market's confidence in SPR's strategy and growth prospects. Now coming to sustainability, sustainability remains integral to how we grow. Alongside the renewable PPA in Rajasthan that we have recently signed, our ESG journey continues to receive external validation, which is reflected in the ratings and recognitions which we have received all across. Looking ahead, the momentum in the domestic automotive industry provides an encouraging backdrop. While the global global environment may remain dynamic in the near term, we are confident in our ability to navigate it. Our resilient core business, our expanding powertrain-agnostic portfolio, our investments in capacity and technology, our sharp focus on cost discipline positions us well to sustain our growth momentum and create long-term value for all our stakeholders. With this, I thank you once again for your time and your continued support, and I would request the moderator to open the floor for questions. Thank you once again.
Moderator: very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vivek from DSP Mutual Fund. Please go ahead.
Vivek (DSP Mutual Fund): Sir, congratulations on strong performance. My questions are around the CapEx plans for the company. So what would be the CapEx plans for the current year given the fact that you've added a lot more products? And even in the working capital, I just noticed that the trade payables had come down. Is this part of a strategy, I mean, was that at a higher cost and you're replacing with lower cost? Those are only two questions.
Krishnakumar Srinivasan (Shriram Pistons & Rings Ltd): Yeah. So, our CapEx plan you know, we are, as I said, we are actually putting in capacities ahead of the market. We are expanding you know, in Pithampur, we are also expanding, we have recently expanded in Pathredi. We have also, we are also putting up a expansion that is going on in Ghaziabad. As we speak, there is an expansion in our, you know, there is a CapEx that we are adding for putting up extra capacity on our, you know, injection molding facility, precision injection molding facility. We're putting up a complete new plant, just next door to our existing plant in Neemrana. We're also putting in a lot of CapEx in our TGPL facility and at the same time, in our interiors facility, we are putting in a lot of CapEx for growing the business as well as for growing the capacities across multiple product lines that we have in Antolin. So, all across, we are putting a very, very healthy kind of a CapEx across all the segments of our business. We are very confident that we will be able to grow the capacities ahead of the market and be ready for the future market as they open up. Coming to the second part of the question in terms of trade payables, it's a, you know, presently, if you really see our you know, level of working capital across the group as well as even on standalone basis, you will find that the overall working capital levels are quite normal. Even at the at the increased level of you know, manufacturing that we have because of the market, we are able to maintain a fairly normal level of working capital and with the supply chain situation and other things also, even though at some places, maybe at raw material stage, or at at in some other cases, maybe in processing stage depending on, for example, in the business in in our you know, precision plastic, we have to ensure that the raw material is kept available for at least 3 months of production. So, those kind of decisions are being taken, but across the group, overall the normal the working capital levels are quite normal.
Vivek (DSP Mutual Fund): Perfect, sir. S- Could you just give a guidance in terms of the numbers in rupees crores for CapEx for for the year?
Krishnakumar Srinivasan (Shriram Pistons & Rings Ltd): We normally do not give these numbers because, obviously, you know, this number keeps on changing with every every discussion that we are having. You know, today, we are already sitting on probably another three or four decisions that we have to take and the CapEx plan will change tomorrow. So, we don't want to, it's not a fixed situation. So, as a result, we don't give those numbers, but it's a very sizeable number.
Vivek (DSP Mutual Fund): Okay, sir. Thank you very much, and wish you all the best.
Krishnakumar Srinivasan (Shriram Pistons & Rings Ltd): Thank you very much, Vivek.
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