Sterling Tools Ltd (NSE:STERTOOLS)

Q1 2027 Sterling Tools Ltd Earnings Call Transcript

Aug 6, 2026 / 05:30 AM GMT

Release Date Price: ₹249 (-1.15%)

Transcript

Key Points

Positve

Sterling Tools Ltd (BOM:530759) delivered a robust standalone performance in Q1 FY27, with total income growing 23.7% YoY and profit after tax surging 48.4% YoY.
The company's EBITDA margin improved to 15.4% from 15% last year, supported by operational efficiencies and financial discipline.
The standalone fasteners business remains strongly cash-generative and net debt-free, providing a solid financial foundation for long-term investments.
The company is expanding its presence in commercial vehicle programs, with significant inroads into both LCV and HCV segments, positioning it to outperform the broader automotive industry.
Sterling E-Mobility (SEM) is engaged in 33 active customer programs and received business confirmations from four OEMs, strengthening its order pipeline and long-term visibility.
The commissioning of onboard charger and multifunction unit production lines is on track for Q2 FY27, which will broaden the addressable market and strengthen capabilities in next-generation EV architectures.
Sterling Tech Mobility (STML) has secured seven customer programs for high-voltage DC contactors and relays, with commercial supplies scheduled to commence from Q2 FY27, marking an important milestone.
Management expects the EV businesses to grow 20-30% in FY27 and 30-40% in FY28, with both SEM and STML expected to break even in FY28.
The company is investing in ADAS and driver monitoring solutions, positioning itself to capture the upcoming regulatory mandate for medium and heavy commercial vehicles from October 2027.

Negative

The company experienced an increase in steel prices during the quarter, creating cost pressure, and the impact of higher steel prices is expected to be more visible in the coming quarter as lower-cost inventory has been largely utilized.
Inflationary cost increases across commodities, chemicals, tungsten steel, and wages (up to 35% in some areas) are impacting gross margins, with price increase negotiations with customers expected to take two to four months to conclude.
The EV businesses (SEM and STML) continue to incur losses, with a combined burn of approximately 10 crore per quarter, and are not expected to break even until FY28.
SEM experienced a significant revenue drop in FY25 when a key anchor customer in-sourced their product, resulting in a loss of close to 280 crores of revenue, which has impacted profitability.
The company is operating at 90-95% capacity utilization in the fasteners business, and the benefits of the 88 crore CapEx will not be fully felt until the last quarter of FY27, potentially limiting near-term growth.
The EV ecosystem in India is still largely dependent on overseas technologies and supply chains, which could slow the ramp-up of new products and customer adoption.
For STML, testing and validation for safety products can take 8 to 16 months, delaying revenue growth, and the company has not yet targeted export markets, which are seen as a future game-changer.
The company's two-wheeler EV business has not penetrated large incumbents like Aether or Ola, as these companies have in-house production or long-standing supplier relationships, though two advanced programs are underway.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

STTL.NS - Sterling Tools Ltd
Q1 2027 Sterling Tools Ltd Earnings Call
Aug 06, 2026 / 05:30AM GMT

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Presentation
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Unidentified_1 [1]
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Ladies and gentlemen, good day and welcome to the Q1 FY27 earnings call of Stolen Tools Limited. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involves risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be on. Listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal and operate the web pressing star then see you on your touch tone phone. Please note that this conference is being

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