SPR Auto Technologies: Its Subsidiary's Margins Jump From 8% to Double Digits; What’s Driving the Margin Growth?
The shares of this small cap company majorly engaged in manufacturing of pistons, piston pins, piston rings, engine valves and many more were in focus after the company’s Antolin margins jumped to double digits.
With the market capitalization of Rs. 21,572 Crores, the shares of SPR Auto Technologies Ltd were trading at around Rs. 4,650 per share which is 3 percent discount from its 52 week high of Rs. 4809 per share and is trading at a P/E of 37.0 whereas industry P/E stands at 30.0
Antolin Margins Improve Sharply
SPR Auto Technologies has significantly improved the profitability of its Antolin interiors business. Management said the business, which was earlier operating at around 7–8% margins, has now crossed the double-digit mark and reached the early to mid-teens. This marks a meaningful improvement in the margin profile of the business and was one of the key positives highlighted during the Q1 FY27 earnings call.
Antolin is the interior systems segment of SPR Auto Technologies which was acquired by SPR as a part of its growth strategy into interior systems of vehicles. The products supplied by Antolin include headliners, interior illumination, and HMI technology. After the acquisition of Antolin, the efforts of SPR have been concentrated on making the operations and business profitable through synergies and cost savings.
Synergies and Cost Actions Drive Improvement
Management attributed the improvement primarily to synergies playing out across the interiors business. Since the acquisition, SPR has been working on integrating Antolin with its operations and improving the way the business is managed. Along with this, the company has streamlined several areas related to fixed costs and taken actions to improve the overall cost structure. Management said these measures have directly helped improve margins.
Operational Integration Is Progressing
The integration of Antolin has also been progressing well at the operational level. Management said teams are collaborating and that operational synergies have already started. However, some initiatives take time because they involve processes such as clearances, dyes and tools, and customer approvals. The company is therefore continuing to work on these areas rather than treating the current margin improvement as the end point.
Customer Confidence and New Business
SPR has maintained Antolin’s existing market share with its customers while also opening up further investment opportunities. Management said customers have confidence that SPR will continue to make the right investments for them. The company has also won important customer programs, which could support the business as the integration progresses. Management did not provide customer-wise market-share figures but said the existing market position has been maintained.
Scope for Further Margin Improvement
The company sees room to improve Antolin’s profitability further. When asked whether the business could reach the mid-teens margin level, management said it was pushing the teams and had a number of actions lined up, adding that these actions were already working and reflected in the results. This indicates that the company is still focusing on operational improvements even after the move from 7–8% margins to the early/mid-teens.
Improvement Not Limited to Antolin
Importantly, management clarified that the margin improvement was not limited to Antolin. It said all subsidiaries had delivered good margin improvement, with the EV subsidiary also benefiting from operating leverage as volumes ramped up. This broader improvement strengthens the profitability angle for SPR Auto Technologies, while Antolin remains a key example of how synergies, fixed-cost control and operational actions have changed the margin profile of an acquired business.