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* On segmental performance, SCD business which consist of automotive and nonautomotive exports from India and businesses outside of India reported a -4.58% YoY growth to Rs.3.13bn due to weak performance of Lonestar, Wescon and Unit 9. However, PLD delivered 6.55% YoY growth to Rs.1.02bn.

* The operating margin for the segment came at 12.4% (+150bps). Ramp up increases in actuator digital cluster, also winning more orders from India and Japan. In Digital clusterSMT line running at 55% utilisation expecting to ramp up very fast to 70-80% due to winning new orders from existing customers.

* DCD segment revenue during the quarter grew by 8.11% YoY to Rs.2.88bn as the 2W market is still weak and aftermarket sales are not doing well.

* SED division to aid EV growth in SEL: SED has developed a few products such as digital clusters, throttle position sensors, rotary sensors, and lock actuators of which production has started from this facility. Further, SED is witnessing good traction for its digital clusters (E-2Ws), actuators, and rotary actuators. Company is also getting good enquiry from Europe and Russia clients. It is further working on other new applications such as electric charge flak cables (under safety norms), elevator conveyor belt cables, parking brake cables, and sunroof cables are under development. We expect SEL’s strong and long relationship with OEMs will help to cross-sell this product which will increase the content value per client for SEL.

View & Valuation: Management expects USA and Europe market recovery will take some more time. We maintain our positive view of SEL’s long-term growth strategy based on: leading market share in domestic 2W in the cable division; leadership position in lamp manufacturing capacity and pricing power (aftermarket); foray into EV related products; expansion in global footprint through LDC acquisition (de-risking domestic cyclicality); and strong aftermarket in both cable and lamp division (60% market share). We introduce FY26 and roll forward our valuation to Sep-25. We recommend ADD rating on the stock due to attractive valuation and arrive at TP of Rs.426 (19x of Sep-25E EPS).

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