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Sterling Tools Ltd

| Quarterly Financial Results Q3 FY 2025-26

NEUTRAL SENTIMENT

Report Source

⬤3rd Feb 26

Summary : Sterling Tools Limited approved Q3/9M 2025 results, re-appointed key directors, allotted ESOP shares, and noted impacts from new labor codes and a subsidiary merger.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Cost of materials consumed, employee benefits, finance costs, depreciation, other expenses.
  2. Standalone Revenue from operations (9M 2025): ₹51,139.81 lakhs.
  3. Consolidated Revenue from operations (9M 2025): ₹60,583.42 lakhs.
  4. Provisions for gratuity and long-term compensated absences due to new labor codes.
  5. Paid-up equity share capital increased due to ESOP allotment.
  6. Standalone Other equity (31 March 2025): ₹45,977.87 lakhs.
  7. Consolidated Other equity (31 March 2025): ₹49,243.75 lakhs.
  8. Mr. Anil Aggarwal is brother of MD Mr. Atul Aggarwal.
  9. Mr. Anil Aggarwal is father of WTD Mr. Akhill Aggarwal.
  10. Mr. Anil Aggarwal is father of Non-Executive Director Mr. Anish Agarwal.
  11. Both standalone and consolidated unaudited financial results presented.

Corporate Overview

  1. Incremental impact from new labor codes on employee benefits.
  2. Primarily manufactures fasteners, automotive components.
  3. Formal and compliant with regulatory disclosures.
  4. Long-standing relationships with leading Original Equipment Manufacturers (OEMs).
  5. Revenue from operations
  6. Other income

Risk Factors

  1. New labor codes impact employee benefits.
  2. Reliance on other auditors for subsidiaries.
  3. Unreviewed financial data for some subsidiaries.
  4. Potential for additional labor code impacts.

Key Drivers

  1. Re-appointment of key directors for stability.
  2. Employee stock options plan boosts morale.
  3. Merger of subsidiary enhances business scope.
  4. DMRC compensation improves financial position.

Auditor’s Report

  1. Unmodified conclusion on limited review.
  2. Reliance on other auditors for certain subsidiaries' financial information.
  3. Reliance on management for unreviewed financial information of three subsidiaries.
  4. Restatement of comparative periods due to Haryana Ispat merger.

Board Commentary

  1. Re-appointment of Mr. Anil Aggarwal as Chairman & Whole Time Director.
  2. Re-appointment of Mr. Atul Aggarwal as Managing Director.
  3. Reconstitution of the Corporate Social Responsibility Committee.
  4. Impact of new labor codes on gratuity and long-term absences.
  5. Impact of new labor codes on employee benefits provisions.
  6. Allotment of 1,60,108 equity shares under ESOP 2023.

Corporate Governance

  1. Ms. Rashmi Urdhwareshe serves as Non-Executive Independent Director.
  2. Audit Committee, Nomination and Remuneration Committee, CSR Committee.

Management Discussion & Analysis

Operational Focus Areas

  1. Monitoring finalization of new labor code rules.

Performance Drivers

  1. Enhanced compensation from Delhi Metro Rail Corporation (DMRC).

Risk Control Measures

  1. Company is monitoring finalization of Central/State Rules and clarifications.

Critical Risks

  1. Financial impact from new labor codes on employee provisions.