Sterling Tools Ltd, a leading auto component manufacturer based in Faridabad, has announced a 40.9% year-on-year increase in its consolidated net profit for the first quarter of the current financial year. The company attributed this growth to a strong performance in its electric vehicle (EV) business, operated through its subsidiary Sterling Gtake E-Mobility Ltd (SGEM).
For the quarter ending June, Sterling Tools reported a consolidated net profit of ₹18.4 crore, up from ₹13.1 crore in the same period last year. The company’s EBITDA, or operating profit, saw a 23.3% increase, reaching ₹34.1 crore, while revenue from operations rose by 28% to ₹281.68 crore.
Sterling Tools, the second-largest automotive fastener manufacturer in India, has been expanding its presence in the EV market through SGEM, which now accounts for 35% of the company’s consolidated revenue, up from 23% in the previous financial year.
“SGEM continues to gain momentum, with total income growing by 62.7% year-on-year. The revenue contribution of SGEM to our overall business has increased from 33% in Q1 FY24 to 43% in Q1 FY25. We are focused on expanding our EV product offerings and diversifying our customer base,” said Atul Aggarwal, Managing Director of Sterling Tools.
However, the company’s EBITDA margin contracted slightly to 12%, down from 12.4%, primarily due to a 26% year-on-year rise in total expenses, which reached ₹259.73 crore. The cost of materials consumed increased as expected, while employee benefits expenses surged by 43% to ₹22.33 crore, likely due to expenses related to employee stock options (ESOPs).
Sterling Tools noted that its adjusted EBITDA, excluding ESOP expenses, grew by 33.9% year-on-year to ₹37.1 crore, with the adjusted EBITDA margin expanding to 13.1% from 12.4% in the corresponding quarter.
