Sandhar Technologies: Leveraging Domestic Manufacturing Momentum for Sustainable Growth

The Indian manufacturing sector is undergoing a transformation, driven by domestic demand, technological innovation, and strategic acquisitions. Sandhar Technologies Ltd (BOM:541163) emerged from its Q4 2025 earnings as a prime beneficiary of this shift, showcasing robust domestic revenue growth and a clear roadmap to capitalize on high-margin niche markets. For investors seeking exposure to India’s manufacturing renaissance, Sandhar’s combination of operational discipline, geographic focus, and undervalued multiples presents a compelling opportunity.

Domestic Dominance: A Catalyst for Sustainable Growth

Sandhar’s Q4 results underscore its strategic pivot toward India-centric growth. Domestic revenue surged by 13% year-on-year, outpacing the 11% rise in total revenue, signaling a deliberate shift toward higher-margin domestic contracts. This focus is paying dividends: the India business segment now accounts for over 80% of revenue, shielding the company from the volatility of European markets, where overseas operations reported a ₹21 crore annual loss.

The acquisition of Sundaram Clayton’s aluminum die casting business—a ₹400–425 crore revenue generator—is a masterstroke. This move diversifies Sandhar’s portfolio into a critical automotive supply chain segment, while also aligning with India’s push for self-reliance in manufacturing. Management’s ambition to grow this unit’s revenue by 2.5–3.0x within 2–3 years highlights confidence in domestic demand for lightweight, fuel-efficient components.

Operational Efficiency: Margin Expansion on the Horizon

Sandhar’s EBITDA rose by 9% in Q4 2025, with a full-year increase of 14%, reflecting strict cost controls and scale advantages. The company’s FY26 guidance targets a 14–15% revenue growth (excluding the Sundaram Clayton acquisition) and a 30–40 basis point improvement in EBITDA margins, driven by operational efficiencies and expanded production scales.

The EV charger division, now in its first full year, is a sleeper hit. With projected revenue of ₹10–15 crore in FY26 scaling to ₹100 crore within three years, this division taps into India’s rapidly growing electric vehicle (EV) ecosystem—a market expected to hit $10 billion by 2030, per government estimates.

Valuation: A Discounted Play on Manufacturing Growth

Sandhar’s valuation metrics suggest it is trading at a discount to its peers. With a P/E of 22.8x (vs. the sector’s 26.77x) and an EV/EBITDA of 10.6x (vs. an estimated 11–12x for the broader manufacturing sector), the stock offers a rare entry point into a company with both earnings momentum and structural tailwinds.

The recent 12.75% jump in its share price post-earnings reflects investor optimism, but the stock remains undervalued relative to its growth trajectory. Analysts’ “Strong Buy” ratings and mutual fund accumulation (now at 15.58% ownership) further validate this thesis.

Navigating Risks: Overseas Turnaround and Debt Management

While Sandhar’s domestic focus is a strength, its European operations—currently losing ₹21 crore annually—require attention. Management’s plan to optimize capacities in Romania and Mexico, paired with cost-cutting measures, aims to reduce these losses significantly by FY26. The ₹740 crore debt from the Sundaram Clayton acquisition is manageable, given Sandhar’s strong EBITDA coverage and the accretive nature of the deal.

Actionable Insights for Investors

1. Buy on Dips: The stock’s 52-week low of ₹329 offers a safety net, while its current price of ₹517.20 aligns with FY26’s growth expectations.
2. Focus on Sectoral Re-Rating: India’s manufacturing sector is poised for a valuation upgrade as geopolitical risks subside and domestic demand surges. Sandhar’s niche positions in EV infrastructure and lightweight automotive components make it a prime beneficiary.
3. Monitor FY26 Execution: Track progress on the Sundaram Clayton integration and EV charger revenue milestones to confirm management’s guidance.

Conclusion: A Manufacturing Powerhouse at a Bargain Price

Sandhar Technologies is not just another manufacturing play—it’s a strategic aggregator of high-margin niches in India’s $1.5 trillion manufacturing economy. With a disciplined focus on domestic growth, margin expansion, and undervalued multiples, the stock presents a rare blend of safety and upside. For investors seeking to capitalize on India’s industrial revival, Sandhar’s Q4 results mark a clear buy signal.

Act now—before the market catches up.