India's 2nd Largest Automotive Fastener Manufacturer Partners with UK Firm to Launch Rare Earth Magnet-Free EV Motors, Eyes Rs 15,000 Crore Market by 2030
The stock has delivered a strong 3-year return of 140.26 per cent, despite a 1-year return of -19.04 per cent.
Sterling Tools Limited, a leading Small-Cap player in the automotive component space, has entered into a significant strategic partnership with UK-based Advanced Electric Machines Ltd (AEM). Through its subsidiary Sterling Gtake E-Mobility (SGEM), the company has signed a Technology Licensing Agreement to develop, manufacture, and market rare earth magnet-free traction motors for electric vehicles (EVs) in India. This initiative is expected to boost domestic manufacturing capabilities, reduce dependence on costly permanent magnets, and support the government's ‘Atmanirbhar Bharat’ (self-reliance) goals.
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The patented technology, developed by AEM, will be utilized at Sterling’s Faridabad plant. These motors are designed to meet the growing demand for sustainable and efficient EV powertrains. The Indian traction motor market is projected to reach approximately Rs 15,000 crore by 2030, and Sterling aims to position itself as a key player in this evolving segment. Anil Aggarwal, Chairman of Sterling Tools, stated that the company is focused on providing cutting-edge technology solutions for the EV industry, while Dr. James Widmer, CEO of AEM, expressed confidence in the long-term success of this collaboration.
This agreement is also a significant move in Sterling’s diversification strategy. While the company’s core business remains high tensile cold forged fasteners—contributing 57 per cent to the revenue in Q1 FY25—the EV segment has grown 8.5 times between FY22 and FY24, now making up 43 per cent of total revenues. SGEM, its EV arm, is the largest manufacturer of Motor Control Units (MCUs) in India, with a strong presence in the high-speed electric scooter market.
Sterling Tools Limited (STL) achieved a consolidated total income growth of 10.6 per cent year-on-year for FY25 with its consolidated total income reaching Rs. 1,038.0 crore. During Q4 STL reported reduced revenue at its subsidiary Sterling Gtake E-Mobility Limited (SGEM) even though the company contributed substantially to the company's overall revenue growth. STL reported an increase of 13.8 per cent in its adjusted EBITDA which reached Rs. 132.4 crore while the margin grew to 12.8 per cent. The standalone business achieved a 6.2 per cent revenue growth along with a 10.5% increase in profit after tax.
Established in 1979, Sterling Tools is the second-largest automotive fastener manufacturer in India. The company supplies to major OEMs like Honda, Maruti, and Mahindra. It operates four manufacturing facilities with a combined capacity of 45,324 MTPA. The company has announced a Rs 55 crore capex plan for FY25 to further expand across ICE, EV, and green energy verticals.
Share of Sterling Tools Limited is trading at Rs 296, near its 52-week low of Rs 286.75. Its 52-week high stands at Rs 736.35. The stock has delivered a strong 3-year return of 140.26 per cent, despite a 1-year return of -19.04 per cent. With a market capitalisation of Rs 1,071 crore and a PE ratio of 16.77, the stock remains on the radar of long-term investors. Key public shareholders include Meidoh Co Ltd (4.98 per cent) and Sandeep Bansal (4.15 per cent).
Disclaimer: The article is for informational purposes only and not investment advice.