Sterling Tools: standalone PAT +48% YoY, consolidated profit -35% on EV losses

Sterling Tools' consolidated (primary) PAT fell 34.8% year-on-year to ₹5.86 Cr in Q1 FY27 (quarter ended 30 June 2026), even as consolidated revenue from operations grew 11.4% YoY to ₹214.07 Cr — a clear case of top-line growth not converting to the bottom line. Consolidated NPM compressed to 2.71% from 4.61% a year ago, and OPM slipped to 10.59% from 11.47%. Sequentially, consolidated PAT rose sharply from ₹1.59 Cr in Q4 FY26, but that comparison is distorted: Q4 FY26 ran a pre-exceptional operating loss and was rescued to a ₹1.59 Cr net profit only by a one-off ₹8.57 Cr DMRC land-compensation gain, so the 268% QoQ jump is not a clean read on momentum.

The consolidated weakness sits entirely with the EV subsidiaries, not the core fastener business. On a standalone basis, Sterling Tools had a strong quarter: revenue from operations grew 23.8% YoY to ₹199.40 Cr, PAT rose 48.4% YoY to ₹16.40 Cr, and both margins expanded — NPM to 8.13% from 6.77%, OPM to 14.34% from 13.90%. The ₹10.5 Cr gap between standalone PAT (₹16.40 Cr) and consolidated PAT (₹5.86 Cr) is explained almost entirely by the EV arm: per the auditor's review report, two subsidiaries (Sterling E-Mobility Solutions and Sterling Advanced Electric Machines) generated ₹14.67 Cr of revenue this quarter but posted a combined net loss of ₹9.24 Cr, with three smaller subsidiaries adding a further ₹0.08 Cr loss.

The stock went into the print at ₹250.94, up 7.4% over the past month of trading.

For context: PAT has now risen for 2 consecutive quarters.

No exceptional items in Q1 FY27 itself, unlike Q4 FY26

Basic EPS: ₹1.61 consolidated (vs ₹2.48 YoY), ₹4.51 standalone (vs ₹3.05 YoY)

Against the Q4 FY26 concall guidance — standalone fastener growth outperforming the auto industry, EV profitability not expected before FY28 — this quarter is on-script: standalone growth of 23.8% YoY comfortably outpaces the broader auto-components sector, while the EV segment's continued losses match management's own caveat that profitability there is being pushed out. No formal numeric guidance was given for this specific quarter, and no analyst consensus estimates for Q1 FY27 turned up in a web search, so vsStreet is unknown; the same search flagged generic near-term margin pressure across the sector from steel, energy and chemicals input costs, consistent with the OPM compression on the consolidated line. No management press release accompanied this filing to quote directly. Alongside the results, the Board approved a further ₹15 Cr equity infusion into Sterling Tech-Mobility (a wholly-owned EV subsidiary) for working capital, and appointed M/s Jitender Navneet & Co as cost auditors for FY27.