Suprajit Engineering (532509) Q2 24/25 earnings summary

Executive summary

• Achieved strong operational performance across all divisions, with Controls Division reaching mid-term EBITDA margin targets of 8% for two consecutive quarters.

• Standalone revenue from operations for Q2 FY25 was ₹4,500.27 million, up from ₹3,768.94 million in Q2 FY24; consolidated revenue reached ₹8,335.96 million, up from ₹7,348.57 million year-over-year.

• Standalone net profit for Q2 FY25 was ₹864.71 million, up from ₹510.17 million in Q2 FY24; consolidated net profit was ₹381.37 million, compared to ₹347.59 million year-over-year.

• SCS acquisition, taken out of insolvency, faced significant restructuring and one-off costs but is progressing toward stabilization.

• Global footprint expansion positions the company to offer nearshore, onshore, and offshore solutions, enhancing competitiveness.

Financial highlights

• Consolidated revenue (excluding SCS) for H1 FY25 was INR 1,508 crore, up 9% year-over-year.

• Consolidated operational EBITDA (excluding SCS) for H1 FY25 was INR 184 crore, up 28% year-over-year.

• Standalone EBITDA for H1 FY25 was ₹1,736.67 million, up from ₹1,388.56 million in H1 FY24.

• Standalone revenue for H1 FY25 was INR 827 crore, up 15% year-over-year; standalone operational EBITDA was INR 135 crore, up 15%.

• Total debt as of September 30, 2024, stood at INR 717 crore; cash balance was INR 325 crore.

Outlook and guidance

• SCS restructuring expected to complete in the next two to three quarters, with EBITDA break-even anticipated after Canada and China operations are integrated.

• Additional top-line contribution from SCS expected to be $40–45 million annually from FY26.

• Controls Division aims to reach double-digit EBITDA margins over time, though SCS integration may delay this by a few quarters.

• Electronics Division expected to remain the fastest-growing segment, with expansion into non-EV markets.

• The group expects the second stage of the SCS acquisition to complete in Q4 FY25, with further integration and restructuring costs anticipated.