Sundram Fasteners optimistic on demand from CV industry in FY26

Replacement demand for ageing trucks acquired prior to 2019 and the growth in construction sector is likely to give a boost to commercial vehicles’ (CV) demand, auto components maker Sundram Fasteners, said in its annual report for FY25. The strong e-commerce industry and the need for last-mile connectivity will increase the demand for light commercial vehicles (LCVs), the company added.

The company forecasts the CV segment to see a moderate growth of 3-5 per cent year-on-year (y-o-y) in FY26 on the backdrop of higher allocation towards capital expenditure in the Union Budget.

“A good crop yield and higher Minimum Support Price will translate into higher purchasing power and spur rural demand, which would propel the growth of the automotive sector, especially in the two-wheeler and tractor segment,” Sundram Fasteners’ report read.

On the passenger vehicle segment, the company expects moderate growth in FY26. “The growth could be impacted due to potential price hikes because of new safety regulations mandating six airbags,” it added. The government’s incentives to set up charging infrastructure and initiatives to exempt customs duty on battery components will improve electric vehicle penetration.

However it does anticipate downside risks to the positive outlook. Extreme temperatures, monsoon failures, trade tensions, supply chain disruption and commodity price inflation are a few challenges that the company highlighted. Despite these challenges, India, with its talent pool, is well-placed to offer sustainable growth in future, the report said.

Sundram Fasteners Ltd incurred a capital expenditure of ₹376 crore in line with its planned capital expenditure program for FY25. These investments will help the company scale in non-auto, electric vehicles, hybrid and adjacent spaces, the company added.

With steel being one of the principal raw materials for the company, the company saw a softening of this cost during FY25. “The company mitigates its raw material price risks through identification of alternate sources of suppliers, alternate usage of materials, and price negotiations,” it added.

With regard to sustainability, renewable power constitutes 51 per cent of the power consumed by Sundram Fasteners in the financial year, and the company has installed roof-top solar panels in its factories to optimise the power cost.

At 02:56 pm, the company’s stock price was trading at ₹1,000.05 down by around 0.43 per cent on the BSE.

Published on June 6, 2025