Sibar Auto Parts Ltd.

Business overview Sibar Auto Parts Ltd. (SIBARAUT), incorporated in 1983, is engaged in the manufacturing and sale of spare parts for automobiles. The company specializes in various casting processes, including Gravity Die Casting, Low Pressure Die Casting, Centrifugal Casting, and Electro Plating. Its product portfolio includes cylinder heads, crankcases for three-wheelers, and aluminium parts for CAC tanks and electrical segments, primarily serving the motor vehicle industry. While its primary market appears to be India, the company also reports foreign exchange earnings from exports.

Key facts (for FY 2025-26)

• Total Revenue from operations was Rs. 2694.20 Lakhs.
• The company reported a Net Loss (PAT) of Rs. 159.09 Lakhs.
• The Promoter & Promoter Group held 48.02% of the total equity shares as of March 31, 2026.
• Commercial production commenced in 1983.
• The company holds IATF 16949:2016 and ISO 9001:2015 certifications.
• There are no subsidiaries.

Recent developments (from AR FY 2025-26)

• Profitability Initiatives: Management is undertaking steps to reduce financing costs by adding new machines and modifying existing manufacturing facilities to improve profitability.
• Growth Outlook: Operations are being scaled up to increase revenues, with management expecting a substantial increase in customer base, improved operating margins, and a recovery from the Covid-19 pandemic's impact.
• Technology Integration: The company continues to use and oversee the latest technology for improving productivity, product quality, automation, and process upgradation in manufacturing activities.
• MD Re-appointment: Shri Pemmasani Ravichandra was re-appointed as Managing Director for a further three-year term, effective August 14, 2026.

Key risks flagged by management

• Financial Risks: The company is exposed to various financial risks including market risk (price and interest rate risk), credit risk (primarily from trade receivables), and liquidity risk.
• External Operating Environment: Threats from changes in government policies/regulations, fluctuations in foreign exchange rates, raw material price volatility, and competition in the automobile industry.
• Internal Control Vulnerabilities: The audit report identifies "rejections/re-works in the process of production" and "persistent cash losses" as key audit matters.
• Compliance Risk: Auditors noted significant outstanding dues to micro and small enterprises (MSMEs) of Rs. 3.18 Crores for FY 2025-26, and the company had not provided for interest on delayed payments as per MSMED Act, 2006.

Pros (evidenced in AR FY 2025-26)

• Revenue Growth: Achieved a notable 21.82% increase in revenue from operations in FY 2025-26 compared to the previous financial year.
• Experienced Leadership: The Managing Director possesses over 23 years of industry experience in production, marketing, and nickel-plating technology, contributing to process upgradation.
• Clean Compliance Record (mostly): No significant material orders from regulators/courts, no pending insolvency proceedings, and zero shareholder complaints reported during the financial year.

Cons (evidenced in AR FY 2025-26)

• Persistent Losses: The company recorded net losses in both FY 2025-26 and FY 2024-25, alongside significant cash losses in both periods, indicating ongoing profitability challenges.
• Auditor Concerns on MSME Dues: A key audit matter highlighted was Rs. 3.18 Crores in outstanding dues to MSMEs for which interest on delayed payments was not provided, indicating a potential compliance and financial risk.
• Weak Liquidity Position: The current ratio of 0.81 for FY 2025-26 suggests that current assets are insufficient to cover short-term liabilities, raising concerns about operational liquidity.