SEDEMAC Mechatronics recorded a 30% year-over-year increase in net profit to ₹39.2 crore for Q2 FY27, fueled by a 40% surge in revenue to ₹400.6 crore, led primarily by its mobility business segment.
- Q2 FY27 net profit at ₹39.2 Cr, up 30% YoY
- Mobility segment revenue jumps 53% to ₹366.4 Cr
- Input cost rise pressures EBITDA margin to 19%
What happened
In the second quarter of fiscal year 2026-27, SEDEMAC Mechatronics reported a substantial 30% increase in net profit, reaching ₹39.2 crore compared to ₹30.1 crore in the same period last year. This was coupled with a 40% rise in revenue from operations to ₹400.6 crore, driven primarily by a 53% jump in its mobility segment revenue to ₹366.4 crore. However, revenue from the industrial segment declined by 26% to ₹34.3 crore.
Despite strong top-line growth, the company experienced margin compression as total expenses rose 45% year on year, mainly due to a 56% increase in raw material costs and higher employee and finance expenses. EBITDA margin stood at approximately 19%, down from 21.7% in Q2 FY26, reflecting the cost pressures. Profit before tax increased modestly by 12% to ₹50.5 crore.
Why it matters
SEDEMAC's robust profit and revenue growth affirm its expanding footprint in the automotive components market, particularly in the growing electric two-wheeler and export three-wheeler segments. The ramp-up of new motor control and integrated starter generator electronic control units has been a critical growth catalyst, signaling strong product market adoption.
However, rising commodity prices, semiconductor supply constraints, and increased operating costs pose ongoing risks to margins, challenging the company to balance growth with profitability. The negative cash flow from operations and elevated working capital requirements indicate short-term liquidity considerations that SEDEMAC will need to manage carefully.
What to watch next
Investors and market watchers should monitor SEDEMAC's upcoming product launches, including a third integrated starter generator ECU expected in Q4 FY27 and the potential introduction of ISG+EFI technology models in FY28. Expansion into European markets with new orders also underscores potential revenue diversification.
Additionally, SEDEMAC's ability to mitigate raw material cost inflation, navigate semiconductor shortages, and maintain stable EBITDA margins amid external pressures will be key performance indicators. Weather-related risks like El Niño's impact on domestic demand and fluctuations in US generator markets may also influence near-term performance.