Synopsis: Shriram Pistons and Rings stands out in a mixed auto ancillary environment by delivering consistent revenue growth, sharp margin expansion and strong cash generation. Diversification into precision plastics and EV components, improving institutional ownership and a net debt-free balance sheet support its sustained outperformance over industry peers.
Even as growth across the auto ancillary sector has remained uneven, one company has consistently distinguished itself through superior financial performance rather than cyclical tailwinds. With profits compounding faster than the industry, operating margins expanding steadily and cash flows remaining strong, the business has demonstrated a level of resilience and execution that stands out in a challenging environment.
About the Company
Founded more than six decades ago in 1963, Shriram Pistons and Rings Ltd has steadily grown into one of India’s most respected names in the auto ancillary space. What began as a focused manufacturer of engine components has evolved into a diversified, technology-driven company supplying to some of the largest original equipment manufacturers in India and overseas.
Today, it is widely recognised as a market leader in pistons, piston rings, piston pins and engine valves, with a strong export footprint across global OEMs and aftermarket customers.
The company’s products are sold under well-known brands such as SPR and USHA, and its presence spans almost every major automotive segment. From passenger vehicles and commercial vehicles to tractors, farm equipment, off-highway applications, industrial engines, gensets, railways and defence, Shriram Pistons has built a diversified end-market exposure that reduces dependence on any single vehicle category.
This broad customer mix has been one of the key reasons for its relatively stable performance across cycles. The shares of the company are trading at Rs. 3,159 with a market capitalization of Rs. 13,916 crore. The stock has given investors returns of up to 20 percent in the past 1 month.
Subsidiaries
In recent years, Shriram Pistons has consciously expanded beyond its traditional engine component portfolio. Through strategic acquisitions and investments, it has entered emerging areas such as electric vehicle motors and controllers, as well as high-precision plastic injection moulded components.
The acquisition of majority and full stakes in entities such as SPR EMF Innovations, SPR Takahata Precision India, SPR TGPEL Precision Engineering and Karna Intertech reflects a clear intent to participate in future mobility solutions while leveraging its core manufacturing strengths.
With an experienced management team and a forward-looking strategy, the company is positioning itself as a multi-product, future-ready auto component manufacturer.
Client Portfolio
Its client base further underlines its scale and credibility. In its core and legacy products, customers include leading OEMs such as Tata Motors, Mahindra, Force Motors, SML Isuzu, Eicher, Ford, Nissan, Honda, Hyundai, Maruti Suzuki, Renault, BMW, TVS, KTM, Royal Enfield, Yamaha, Hero MotoCorp, Bajaj Auto, John Deere, Escorts Kubota and Swaraj. Beyond automobiles, it also supplies components for off-highway equipment, industrial engines, gensets and Indian Railways. In the high-precision moulded components segment, subsidiaries cater to global names like Denso, Mitsubishi Electric, Koito, Aisin, Yazaki, Astemo, Havells and several others.
Manufacturing Capabilities
Shriram Pistons has built a manufacturing and supply chain network that is both deep and geographically well spread. The company operates through six offices, five assembly units and an extensive logistics backbone that includes twenty-two logistics centres across different geographies. This setup allows it to service customers efficiently while maintaining flexibility in production and distribution.
Under its core manufacturing arm, facilities in Ghaziabad and Pathredi form the backbone of its legacy engine component business. These plants manufacture pistons, piston rings, piston pins and engine valves, catering to both domestic and export markets.
Another facility on Bulandshahr Road in Uttar Pradesh focuses on advanced surface treatments, including coated pistons and piston rings, which are increasingly critical for improving engine efficiency and durability. In Haryana, through its Karna Intertech unit at Bahadurgarh, the company operates modern CNC machining and CAD CAM capabilities for designing and manufacturing die-casting moulds, supporting both internal needs and specialised customer requirements.
Beyond its core operations, the company’s subsidiaries significantly broaden its manufacturing footprint. The SPR Engenious facility at Pithampur in Madhya Pradesh is dedicated to engine valves, strengthening capacity in this niche but critical product line.
In Coimbatore, SPR EMF Innovations is focused on motors and controllers for electric vehicles, marking the company’s formal entry into EV powertrain components. This facility is designed to handle advanced manufacturing processes required for electric mobility solutions.
In the precision plastics space, the Neemrana facility in Rajasthan operated by SPR Takahata manufactures high-precision injection moulded components for vehicles, while SPR TGPEL runs two plants in Noida that produce a wide range of moulded products. These include automotive interior and functional components as well as parts for industrial and medical applications.
Together, these facilities reflect a conscious shift towards higher value-added products and technologies, positioning the company well for the next phase of growth in the auto component industry.
Product Portfolio
The company’s product portfolio can broadly be divided into three pillars, starting with its core and legacy engine components. In pistons and piston pins, Shriram Pistons offers advanced solutions such as thin-walled designs, diamond-like carbon coatings on pins, crown anodising, Nanofriks technology and lightweight variants developed in collaboration with global partners.
These products are engineered to meet tighter emission norms and efficiency requirements. Its piston rings portfolio includes a wide range of plated and coated rings designed for durability and reduced friction. In engine valves, the company manufactures products with chrome plating, nitro-carbonising treatments, multiple head profiles, stellite seating and up to sixteen groove profiles, catering to diverse engine specifications.
The second pillar is high-precision injection moulded components, which has gained importance following recent acquisitions. Through SPR Takahata, the company supplies fuel injection components, throttle and brake unit parts, ECU housings, airbag components, connectors, door locks and steering-related parts.
These products are supplied to leading global automotive and electronics OEMs and require extremely tight tolerances and consistent quality. Under SPR TGPEL, the portfolio expands further to include speaker grills, air vents, flange covers, manifolds, bobbins, door handles, fuse box covers, electrical components, industrial parts and even select medical components. This segment provides diversification beyond traditional metal-based auto parts.
The third and most forward-looking pillar is electric vehicle motors and controllers. Through SPR EMF Innovations, the company manufactures motors ranging from 2 kilowatts to 250 kilowatts, covering applications from two-wheelers to larger EV platforms.
The portfolio includes brushless DC motors, switched reluctance motors, permanent magnet synchronous motors, mid-drive motors and integrated motor controllers. Management has highlighted that the company is among the very few players in the country that design and manufacture both motors and controllers in-house, size them together and deliver integrated solutions to customers. This capability not only improves performance and reliability but also strengthens customer stickiness in a rapidly evolving EV ecosystem.
The broader auto industry has seen only moderate momentum in recent periods. Production volumes grew by 6.1 percent year-on-year to 17.2 million units, while domestic sales volumes increased by a relatively modest 1.3 percent year-on-year to 13.7 million units. This gap indicates that while manufacturers ramped up output, end-market demand in India remained somewhat subdued.
Against this industry backdrop, Shriram Pistons delivered a noticeably stronger performance. On a standalone basis, total income rose by 9.4 percent year-on-year to Rs. 17,601 million, comfortably ahead of both industry production and domestic sales growth. On a consolidated basis, total income increased by an even sharper 14.9 percent year-on-year to Rs. 20,344 million, reflecting contributions from subsidiaries and newer business lines.
Over a longer horizon, the company’s growth profile looks even more compelling. Over the past three years, it has delivered compounded profit growth of around 46 percent, while compounded sales growth over the same period stands at about 20 percent.
This combination of strong profit expansion alongside healthy revenue growth points to improving operating leverage and better cost control. At the current valuation, the stock trades at a price-to-earnings multiple of around 25.8 times, compared with an industry average of roughly 31.2 times.
Despite outperforming the industry on growth and margins, the stock continues to trade at a discount to the broader auto ancillary segment, suggesting that valuations remain reasonable.
Shareholding trends further reinforce investor confidence. Foreign institutional investors have steadily increased their stake from 1.07 percent in December 2023 to 5.99 percent by September 2025, indicating rising global interest in the company’s story. Domestic institutional investors have also marginally raised their holding from 13.07 percent to 13.23 percent over the same period, though their increase has been relatively muted compared to FIIs.
Working capital metrics show some increase but remain within manageable levels. Debtor days have moved up from 55 days in March 2023 to 60 days in March 2025, while inventory days have seen only a marginal rise from 113 days to 116 days over the same period. The cash conversion cycle stands at around 75 days, and working capital days are about 29, indicating that the business is still efficiently managed despite expansion.
Cash flows from operating activities have shown a steady improvement. From Rs. 395 crore in March 2023, operating cash flows increased to Rs. 434 crore by March 2025, translating into a compound annual growth rate of roughly 4.9 percent over the two-year period. This consistent cash generation supports ongoing capex and strategic investments.
On the debt front, total borrowings have risen over the last five years from Rs. 146 crore in March 2021 to Rs. 508 crore in March 2025, reflecting expansion and investments in new businesses. However, the quality of debt has improved. Long-term borrowings declined from Rs. 207 crore in March 2024 to Rs. 163 crore by September 2025.
Short-term borrowings have increased from Rs. 91 crore in March 2022 to about Rs. 341 crore in September 2025, largely to support working capital needs. Lease liabilities have remained stable in the range of Rs. 30 to 35 crore over the past three years.
As of March 2025, trade payables stood at Rs. 411 crore, while trade receivables were Rs. 584 crore, increasing marginally to Rs. 591 crore by September 2025. Inventory levels have risen from Rs. 274 crore in March 2021 to Rs. 507 crore in September 2025, but the increase has been gradual and aligned with business growth, suggesting there is no aggressive stockpiling. Importantly, the company remains net debt free, with cash and cash equivalents of around Rs. 1,006 crore as of September 2025.
Profitability trends have been particularly encouraging. Operating profit margins have expanded sharply over the last five years, rising from about 14 percent in March 2021 to 20 percent in March 2025, and further improving to 21 percent by September 2025.
The cost structure as of March 2025 shows material costs at 41.91 percent of revenue, manufacturing costs at 16.34 percent, employee costs at 14.50 percent, with the remainder classified under other expenses. This margin expansion highlights the benefits of scale, product mix improvement and efficiency initiatives.
Q2 and H1FY26 Performance
H1FY26 Overview
The first half of FY26 demonstrated the company’s resilience in a challenging operating environment. Despite geopolitical uncertainties and muted growth in domestic auto markets, consolidated total income grew by 14.9 percent year-on-year in H1FY26, while consolidated EBITDA increased by 14.2 percent year-on-year. This performance underscores the benefits of diversification across products, geographies and customer segments.
Q2FY26 Performance and Industry Trends
During the second quarter, consolidated total income rose by 15 percent year-on-year, with the company maintaining a healthy consolidated EBITDA margin of 22.4 percent and a PAT margin of 13.6 percent. Industry trends during the quarter were mixed, with passenger vehicle volumes declining by about 1 percent, while two-wheeler volumes recorded a healthier growth of around 7 percent. Even in this uneven demand environment, the company managed to outperform the broader industry.
It is worth noting that GST reforms announced on 15 August 2025 came into effect only from 22 September 2025, resulting in an impact of just one week on sales volumes during the quarter.
The months of August and September saw some disruption in the sales mix, which affected the business to a limited extent. However, the auto industry has emerged as an early beneficiary of these reforms, and improved demand from OEMs has already begun to reflect in order flows. Post the GST reduction, often referred to as GST 2.0, management has indicated that demand trends are showing signs of recovery.
Demand Recovery and Subsidiary-Led Outperformance
The festive season in October further supported sentiment, with passenger vehicles, two-wheelers, three-wheelers and commercial vehicles all reporting double-digit sales growth. This has raised expectations of stronger volumes from the third quarter onwards.
Within this backdrop, Shriram Pistons continued to outperform, supported by strong contributions from subsidiaries, including the EV and high-precision injection moulded components businesses.
The company also continued to win new orders across its legacy products as well as newer segments. Process efficiency initiatives and cost optimisation programs contributed positively to both revenue growth and profitability.
International operations remained stable despite tariff-related uncertainties and geopolitical challenges. With a presence in more than forty-five countries, the company has been able to manage regional demand fluctuations through localisation, market diversification and long-term customer relationships. While some export markets experienced temporary softness, management expects traction to improve as global trade conditions stabilise.
EV Segment Progress and Capacity Expansion
Progress in the EV segment has been encouraging. Management noted that the company successfully mitigated the impact of rare earth magnet supply disruptions through alternate sourcing strategies, ensuring uninterrupted production. The commissioning of the new EV motor and controller facility at Coimbatore has been completed, and commercial production is expected to begin during the ongoing quarter.
Additionally, Phase II expansion at the SEL Pithampur facility has been completed, and Phase III expansion is already underway to meet excess demand from customers. Operational disruptions due to magnet shortages were described as minimal, with sales continuing to grow despite challenges.
Conclusion
At its core, Shriram Pistons recent outperformance is not the result of a short-term cycle or a one-off demand spike, but the outcome of years of disciplined execution and steady reinvestment.
While much of the auto ancillary sector continues to navigate uneven volumes and shifting technology priorities, the company has quietly built a business that benefits from both scale in legacy components and optionality in emerging segments. Its ability to expand margins, generate cash consistently and remain net debt-free, even while investing in EV motors and precision plastics, sets it apart from many peers.
What also stands out is the balance the company has struck between continuity and change. The core engine component business continues to deliver predictable cash flows, while subsidiaries are increasingly contributing to growth and future relevance.
Rising institutional ownership, improving profitability and a diversified customer base suggest that the market is beginning to recognise this transformation. If execution in newer segments remains on track and industry demand continues to normalise, Shriram Pistons appears well placed to sustain its leadership and compound value beyond near-term stock price movements.
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