Sandhar Technologies: Growth Now, Profits Next

Sandhar Technologies is entering an important phase. It is expanding into aluminium die casting, sheet metal, fabrication and EV products. Its ambition is to double revenue every 3-4 years. The numbers are strong. FY26 consolidated revenue rose 24.91% to Rs 4,852 crore, while EBITDA increased 28% to Rs 513 crore, PBT 39% to Rs 256 crore and PAT 40% to Rs 199 crore. Q1 FY27 revenue rose 26.77% to Rs 1,381.89 crore and EBITDA 15.23% to Rs 117.33 crore. However, EBITDA margin fell to 8.49% from 9.34%. For shareholders, this is the key issue. Revenue is growing faster than profit because Sandhar is carrying expansion costs. New projects generated Rs 130 crore revenue in Q1 FY27, but EBITDA was only Rs 0.88 crore and PBT was negative Rs 7.41 crore. The company has committed Rs 341 crore to four new India projects, expecting them to turn profitable during FY27-FY28. The opportunity is meaningful. Aluminium die casting can serve conventional vehicles and EVs through engine parts and battery cases. Sheet metal, cabins and fabrication can increase Sandhar's content across two-wheelers and off-highway equipment. Management targets over 15% revenue growth in FY27 and, over time, Rs 10,000 crore revenue, Rs 450 crore PAT and 15-20% post-tax ROCE. If new capacities reach scale, this can create shareholder value. But risks remain. Borrowings rose to Rs 1,148 crore in FY26 and free cash flow was negative Rs 71 crore. Overseas operations remain loss-making. At around Rs 650 a share, the stock traded near 19 times earnings. For shareholders, Sandhar is an execution story. If new projects turn profitable, today's margin pressure could prove worthwhile. If capex rises without adequate returns, shareholders may finance growth without enjoying its benefits. Investors should watch execution closely.