SEDEMAC Q2 Profit Rises 30% YoY To ₹39 Cr, Revenue Jumps 40%

Auto components manufacturer SEDEMAC Mechatronics reported a 30% jump in net profit to ₹39.2 Cr in the second quarter (Q2) of fiscal year 2026-27 (FY27) compared to ₹30.1 Cr in the year-ago period.

This came on the back of revenue from operations rising 40% to ₹400.6 Cr during the quarter from ₹286.5 Cr in Q2 FY26. Total income, including other income of ₹61 Lakh, stood at ₹401.3 Cr in the quarter ended September 2026.

SEDEMAC operates across two segments – mobility and industrial – with the former accounting for the bulk of its business. The mobility segment generated revenue of ₹366.4 Cr in Q2 FY27, up 53% from ₹240 Cr in the year-ago quarter. Meanwhile, the industrial segment reported revenue of ₹34.3 Cr, down 26% from ₹46.5 Cr in Q2 FY26.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA), calculated by adding finance costs and depreciation to profit before tax, stood at approximately ₹76.2 Cr during the quarter, against ₹62.3 Cr in Q2 FY26. 

This translates into an indicative EBITDA margin of around 19%, compared with 21.7% in the year-ago period. These are derived figures and were not separately reported in the company’s financial results.

The quarter also saw SEDEMAC come under margin pressure amid an increase in input costs and operating expenses. As a result, total expenses rose 45% YoY to ₹350.7 Cr in Q2 FY27. Of this, cost of materials consumed increased 56% YoY to ₹277.4 Cr, while employee benefit expenses rose by around ₹2.1 Cr YoY to ₹25.3 Cr. Finance costs also increased to ₹5.9 Cr from ₹2.5 Cr in Q2 FY26.

Profit before tax rose 12% to ₹50.5 Cr from ₹45 Cr in Q2 FY26. Total tax expenses, however, declined to ₹11.4 Cr from ₹14.9 Cr, supporting the growth in net profit during the quarter.

For the first half of FY27, SEDEMAC’s revenue from operations increased 41% to ₹710.4 Cr from ₹503.8 Cr in the year-ago period. In line with this, net profit also rose 54% to ₹72.5 Cr from ₹47.2 Cr in H1 FY26.

However, SEDEMAC’s cash flow from operations turned negative and stood at ₹20.4 Cr in H1 FY27 against a positive cash flow of ₹120.7 Cr in the corresponding period last year. The company’s cash flow statement showed that working capital changes included an increase of ₹78.4 Cr in trade receivables and ₹100.8 Cr in inventories during the six-month period. The increase in these two items absorbed cash during the period, despite the company’s higher reported profit.

SEDEMAC’s Growth Drivers And Risks

In its investor presentation, SEDEMAC identified the ramp-up of electric two-wheeler (E2W) motor control units (MCUs) and integrated starter generator (ISG) electronic control units (ECUs) for export three-wheelers as key growth drivers. 

Production of the E2W MCUs began in Q3 FY26, while export-oriented three-wheeler ISG ECUs entered production in Q4 FY26. 

SEDEMAC also said its ISG and electronic fuel injection (EFI) ECUs crossed 1 Mn shipments in Q2 FY27, less than two years since production began in October 2024. 

The company also claimed that it has now completed the ramp-up of ISG ECUs, focused on the variants of two top-10 motorcycle models. A third launch is expected in Q4 FY27. One of the models could transition to ISG+EFI technology in FY28, added SEDEMAC.

The company has also secured an order for an ISG ECU and magneto kit from a European two- and three-wheeler original equipment manufacturer (OEM), with production expected to begin in H1 FY28.

However, the company flagged tightening semiconductor supplies and rising commodity prices as risks to raw material costs and profitability.

It noted that higher raw material costs had already put some pressure on EBITDA margins in H1 FY27, although revenue growth partly offset the impact through operating leverage. PCB costs have also increased sharply, with SEDEMAC expecting its EBITDA margin percentage to remain broadly stable in H2 FY27 compared with H1 FY27.

The company also flagged potential weather-related risks to its demand. A strong El Niño in 2026 could affect the Indian monsoon and domestic two-wheeler demand, while the US hurricane season could weigh on the home-standby generator market. SEDEMAC said it had already seen some negative impact on its industrial EFI ECU business serving the US home-standby generator market, although some demand recovery was visible.

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