Swaraj Engines Limited (SEL) is a prominent manufacturer of diesel engines primarily for fitment into Swaraj tractors produced by Mahindra & Mahindra Ltd. (M&M). The company supplies diesel engines ranging from 20 HP to 65 HP. Incorporated in 1985, Swaraj Engines was jointly promoted by Punjab Tractors and Kirloskar Oil Engines Ltd. Kirloskar provides crucial know-how, design, documentation, process details, and tooling designs for manufacturing these diesel engines for 'SWARAJ' tractors by Punjab Tractors Ltd.
Since the commencement of commercial operations in 1989-90, the company has supplied approximately 1.3 million engines for Swaraj tractors. This significant volume highlights Swaraj Engines' enduring expertise and substantial contribution to India's agricultural mechanization efforts.
Swaraj Engines operates a dedicated manufacturing facility located in Mohali, Punjab. The company has demonstrably expanded its production capabilities over the years, enhancing its capacity to 150,000 engines per annum by 2022. This expansion signifies the increasing demand for agricultural machinery and the company's commitment to meeting market needs.
In addition to engine manufacturing, Swaraj Engines produces high-tech engine components for Swaraj Mazda vehicles. This diversification into sophisticated engine components showcases the company's advanced technical capabilities and manufacturing excellence. A notable milestone was the establishment of facilities in 1999 for manufacturing high-tech engine components such as Cylinder blocks and cylinder heads for Swaraj Mazda Vehicles.
Mahindra & Mahindra Limited (M&M) is the holding company of Swaraj Engines, holding 52.12% of the company's paid-up equity share capital as of March 31, 2024. The ownership structure saw a significant shift when, on September 27, 2022, Kirloskar Industries Limited sold its entire equity stake of 17.41% to Mahindra & Mahindra Limited through an inter-se transfer among promoters. This acquisition increased M&M's equity stake to 52.13%, making Swaraj Engines a subsidiary of M&M.
The company has consistently demonstrated strong financial performance, particularly in recent quarters.
Annual Performance (Year Ended March 2025):
- Net Profit: Rose by 20.39% to ₹165.98 crore, compared to ₹137.87 crore in the previous year.
- Revenue: Increased by 18.51% to ₹1,681.89 crore, compared to ₹1,419.24 crore in the previous year.
Quarterly Performance (Q3 FY25 - Quarter Ended December 2024):
- Net Profit: Grew by 32.57% to ₹31.95 crore, compared to ₹24.10 crore in the corresponding quarter of the previous year.
- Revenue: Increased by 23.59% to ₹345.50 crore, compared to ₹279.55 crore in the corresponding quarter of the previous year.
- FY25 Annual Revenue: ₹1,681.89 crore (18.51% growth)
- FY25 Net Profit: ₹165.98 crore (20.39% growth)
- Q3 FY25 Revenue: ₹345.50 crore (23.59% growth)
- Q3 FY25 Net Profit: ₹31.95 crore (32.57% growth)
Swaraj Engines holds a significant market position, reflected in its market capitalization of ₹5,161 Crore (showing a 45.3% increase in one year). The company's revenue stands at ₹1,682 Crore, with a profit of ₹166 Crore. The stock is currently trading at 12.3 times its book value, and promoter holding is at 52.1%.
The company achieved substantial operational milestones in Q3 FY25, recording its highest-ever engine sales volume of 34,415 units. This represents a growth of 26.97% compared to the 27,104 units sold in the same period last year, underscoring the company's expanding market presence and operational efficiency.
Swaraj Engines has consistently maintained an attractive dividend policy for its shareholders. For FY 2025, the company declared its highest-ever dividend of 1045%, with a record date set for June 27, 2025. This exceptional dividend declaration is a testament to the company's robust cash generation capabilities and its commitment to returning value to its shareholders.
The company has demonstrated a consistent growth trajectory supported by strong fundamentals. Its annual revenue growth of 18% is remarkable, coupled with a healthy pre-tax margin of 13% and an exceptional Return on Equity (ROE) of 39%. Swaraj Engines is debt-free and possesses a strong balance sheet, enabling it to report stable earnings growth across various business cycles.
The stock has exhibited strong performance, climbing 37.18% in 2025 and approximately 156% over the last three years, indicating robust investor confidence. This performance reflects market optimism in the company's strategic direction and operational excellence.
The ongoing modernization of the agricultural sector and the government's focus on mechanization create a favorable environment for Swaraj Engines' growth. With its established market position, solid financial performance, and the backing of Mahindra & Mahindra, the company is well-positioned to capitalize on the burgeoning demand for agricultural machinery in India.
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