Sterling Tools targets EV expansion, projects stronger second half

Sterling Tools Limited reported a total income of INR172.2 crores for its standalone fastener business in Q2 FY '26. EBITDA margin and PBT before exceptional items remained flat year-on-year. The company anticipates a significantly better second half of FY '26 due to improved customer sentiment and OEM production outlook, projecting 5% to 7% growth in its standalone business for the full year. Exceptional items for the quarter included INR9.5 crores in enhanced compensation, with INR6.22 crores from Delhi Metro Rail Corporation for land acquisition.

The company's EV division, Sterling E-Mobility Solutions Limited (SEM), is expanding into integrated motors, rare earth magnet-free motors, and various chargers, with a target market size of INR2,000 crores by 2030. Sterling Tech-Mobility (STML) will commence commercial production of HVDC contactors and relays in December '25, projecting INR200 crores in revenue potential within five years. The market for HVDC contactors and pre-charge relays is estimated at INR300-400 crores, expected to grow to INR1,000 crores by decade-end, with EV applications comprising 60-70%.

For FY '27, Sterling Tools expects to approach FY '25 consolidated revenue levels, driven by growth in fastener, SEM, and new STML businesses. The capex for SEM is projected at INR10-15 crores next year, in addition to INR45 crores invested in FY '25 and FY '26. The standalone fastener business will see a capex of approximately INR25 crores next year.