Sterling Tools Ltd today reported 15.7 percent year-on-year growth in its consolidated profit for the financial year 2024 on the back of robust improvement in its electric vehicle component business, while the profit doubled during the fourth quarter of the year.
The Faridabad-based auto component maker’s consolidated profit for the period came in at Rs 55.4 crore, against Rs 47.9 crore in the financial year 2023. Revenue from operations rose 21 percent on year to Rs 932 crore.
Revenue grew in double-digits, despite a marginal growth in traditional faster business, on the back of the electric vehicle business. The company offers motor control units for electric vehicles through its wholly owned subsidiary Sterling Gtake E-Mobility Ltd (SGEM). SGEM now contributes 35 percent of its consolidated revenue, up from 23 percent in FY23.
Turnover in SGEM jumped 86 percent on year to Rs 323.8 crore, driven by increasing electric vehicle adoption in two-wheelers and three-wheelers. However, Sterling Tools’ standalone revenue grew at a marginal rate of 1.8 percent to Rs 608.1 crore.
Adjusted EBITDA during the year rose 16 percent on year to Rs 116.3 crore. The company noted that the adjusted EBITDA excludes ESOP expenses. In FY23, the company recorded a one-time gain of Rs 3.4 crore on account of some insurance claims received from an insurance company following a fire incident at one of the holding company’s manufacturing facilities.
Meanwhile, for the fourth quarter of FY24, Sterling Tools’ consolidated profit for the period doubled to Rs 16.3 crore from Rs 7.8 crore in the year-ago period.
The profit rose primarily on a 27 percent on-year growth in revenue from operations during the period to Rs 269.2 crore. Adjusted operating profit rose 44 percent on year to Rs 33.8 crore.
The net profit rose further as the company had registered a one-time loss of Rs 3.3 crore in the year-ago quarter on account of interest liability recognized by the holding company on the proposed foreclosure of authorization license under the Export Promotion Capital Goods scheme.
Steerling Tools’ board has declared a final dividend of Rs 2 per equity share for the financial year 2024, subject to shareholder approval.
Recently, the company entered into an MoU with South Korea’s Yongin Electronics Co Ltd to establish an EV components facility in India. This collaboration is expected to generate an annual business of around Rs 200 crore in the next 5 years.
“Against this backdrop, the board has approved investments in two companies, named Sterling E-mobility Pvt Ltd and Sterling Tech Mobility Ltd., transforming them into wholly owned subsidiaries of Sterling Tools Ltd,” Sterling Tools MD Atul Aggarwal said in a press release.