SEDEMAC Mechatronics Limited has announced robust financial results for the second quarter and first half of fiscal year 2027. The company reported a significant revenue growth of 40% plus in both periods, driven by strong sales of Electronic Control Units (ECUs), particularly its Integrated Starter Generator (ISG) and ISG+EFI variants. Despite an increase in raw material costs impacting EBITDA margins, operating leverage from revenue growth has partially offset this, with a positive outlook for the second half of the fiscal year.
SEDEMAC Mechatronics Reports Strong Q2 and H1 FY27 Performance
SEDEMAC Mechatronics Limited has released its unaudited financial results for the quarter and half year ended September 30, 2026 (Q2 and H1 FY27). The company has demonstrated substantial growth, with both periods marking the highest ever achieved. Revenue growth stood at approximately 40% plus year-on-year, continuing the strong momentum from the previous fiscal year. This impressive performance was driven by the successful ramp-up and widespread penetration of key products.
Key Financial Highlights and Business Updates
The company highlighted that nearly all its revenue is derived from the sale of ECUs. The number of control-intensive ECUs sold in the trailing twelve months (TTM) ending Q2 FY27 reached approximately 4.6 million units, representing a 44% year-on-year growth. This strong sales volume correlates directly with revenue performance.
While revenue growth has been strong, there has been a slight dip in EBITDA percentage attributed to increased raw material costs, a trend observed across the commodity market. However, the company has benefited from operating leverage due to the significant revenue growth, which has helped to offset some of the cost pressures. For the Product Development and Technology (PDT) business, a significant ramp-up in ISG ECU for export ICE 3-wheelers and electric two-wheeler MCUs has been noted, with these products now fully operational.
SEDEMAC also reported substantial progress on its ISG+EFI ECUs, shipping over 1 million units within two years of introduction. The company has secured business wins for ISG ECUs and electric motors with a European 2/3-wheeler OEM, with production expected to commence in H1 FY28. On the industrial side, a recovery in demand for EFI ECUs is anticipated following a weaker hurricane season impacting standby generators.
Future Outlook and Strategic Investments
Looking ahead, SEDEMAC is focusing on expanding its manufacturing footprint, with its MF3 plant now operational and pilot production underway. An additional larger plant, MF5, is planned in Shoolagiri, Tamil Nadu, over the next one to two years. The company has seen substantial investment in Capex, increasing from ₹227 crore to ₹450 crore between March and September 2026, alongside a rise in working capital from ₹135 crore to ₹258 crore, primarily due to increased revenue and strategic raw material procurement.
Key risks identified include customer concentration, though this is being mitigated by new product launches and market diversification. The company is also addressing the transition to electric vehicles, asserting its agnostic stance and seeing electrification as a positive for increased per-unit revenue. R&D efforts are ongoing, with a focus on continually yielding significant future propositions.
The company anticipates continued EBITDA pressure in H2 FY27 due to rising raw material and PCB costs, but expects this to be partly offset by price corrections and the introduction of newer generation ISG controllers. Overall, SEDEMAC projects its EBITDA to hold steady in H2 compared to H1 FY27.
Q&A Highlights
During the question-and-answer session, management clarified aspects of cost pass-through for electronic components, noting it’s a negotiated process. They also addressed working capital, stating that increases are primarily driven by revenue growth rather than external supply chain pressures. The company emphasized its proprietary and new sensor-less control technology for electric vehicles, highlighting its patent protection and potential for markets beyond India, such as power tools. SEDEMAC also provided insights into its manufacturing capacity utilization and ongoing plant expansions.
Source: BSE
