Financial Performance Overview
Swaraj Engines Limited reported strong financial results for FY 2025-26 with net operating revenue increasing 19.3% to ₹2,007.13 crores (₹200,713.43 lakhs) from ₹1,681.89 crores in FY25. Net profit grew 18.3% to ₹196.31 crores (₹19,624.58 lakhs) from ₹165.98 crores, driven by record engine sales of 202,771 units, representing 20.1% growth from 168,820 units in the previous year.
Dividend Declaration and Corporate Actions
The Board recommended a dividend of ₹110 per equity share (1100%) aggregating ₹133.65 crores (₹13,364.85 lakhs), subject to shareholder approval at the 40th Annual General Meeting scheduled for July 20, 2026. This compares to the previous year's dividend of ₹104.50 per share. The record date for dividend eligibility is July 3, 2026, with payment expected on or after July 21, 2026.
Exceptional Items and Labour Code Impact
The company recognized an exceptional item of ₹340.51 lakhs for the estimated incremental impact of the four new Labour Codes notified on November 21, 2025, on retiral benefits. This one-time charge reflects the company's compliance with new regulatory requirements affecting employee benefits.
Operational and Financial Metrics
Key financial ratios showed improvement with Return on Net Worth at 40.2% (39.6% in FY25), Operating Profit Margin at 13.56% (13.52%), and Current Ratio at 2.06 times (1.96 times). Inventory turnover improved significantly to 26.21 times from 22.55 times, while trade receivables turnover decreased to 10.47 times from 11.31 times.
Audit and Compliance Matters
Auditors B K Khare & Co. issued an unmodified opinion, confirming adequate internal financial controls and highlighting related party transactions as a key audit matter. The audit report dated April 13, 2026, expressed a true and fair view of the financial statements prepared under Indian Accounting Standards.
Corporate Governance and Board Matters
The Board proposed re-appointment of directors Puneet Renjhen and Devjit Sarkar (Whole Time Director & CEO) retiring by rotation, and ratification of remuneration for cost auditors M/s SDM & Associates. The company maintained compliance with SEBI LODR Regulations and Companies Act, 2013, with no material penalties or strictures from regulatory authorities.
Capacity Expansion and Future Outlook
Ongoing capacity enhancement continues to increase manufacturing capacity from 195,000 to 240,000 engines annually, with capital work-in-progress of ₹5481.34 lakhs as of March 31, 2026. The company maintains strong relationships with related parties, primarily Mahindra & Mahindra, with total transactions of ₹2026.67 crores conducted at arm's length.
Shareholding and Capital Structure
Promoters (M&M) hold 52.11% of shares as of March 31, 2026, with mutual funds at 8.07% and foreign portfolio investors at 2.82%. Paid-up equity capital stands at ₹12.15 crores (121,49,865 equity shares), with net worth of ₹488.92 crores and book value per share of ₹402.