Topline Revises Sazgar Earnings up by 61% for FY27
Topline has revised up earnings estimates for SAZEW for FY27F/28F by 61/60% following the reveal of some details by the company in an analyst briefing held on Sep 25, 2025. While for FY26E, we revise down our earnings estimates by 7% from Rs304/share to Rs282/share owing to lower-than-expected gross margins.
Alongside this, we expect the company to pay a dividend of Rs56/share in FY26E and Rs73/share in FY27F, based on the current payout ratio of 20%.Sazgar to Double Capacity with New Plant by 4QFY26
Company revealed its likely sales figures post new model launches: We have revised up our unit sales forecast for the company by 39% in FY27F to 20,800 units, translating into monthly sales of ~1,730 units, comprising ~330 units from the new launches of Canon and TANK variants and ~1,400 units from the existing Haval variants.
In the analyst briefing session, the company mentioned that they are currently producing 60 units a day, translating into a monthly production rate of 1300-1350 units, with likely production of around 100 units once the new production facility comes online before Mar 2026. The 100 units a day translates into a monthly production rate of 2,150-2,300 units. While we have assumed sales of 1,730 units monthly, 21% lower than management’s forecast/expectations for FY27F.
Amidst higher demand, the lead time to deliver the vehicle has also increased from the previous 2-3 months to now 3-4 months.
New line to double the production capacity: The Company revealed a hefty capex plan with an outlay of Rs11.5bn for a new facility, which will double the existing capacity of 24k units to 48k units. This new facility will also come with a 5MW solar rooftop installation and much higher efficiencies.
Gross margins in FY27F assumed at 17%: From FY27F onwards, we have assumed gross margins of 17%, as benefits under the Auto Policy 2021–2026 are set to expire by Jun 2026. While for FY26E, we have assumed gross margins of ~22%, based on 4QFY25 trend (25%), adjusted for 2% carbon levy along with PHEV launch impact, which doesn’t carry any policy benefits.
Net Selling price per unit to change considerably: In FY25, average revenue per four-wheeler sale was Rs9.1mn, while 4QFY25 stood lower at Rs8.8mn due to a higher share of petrol variants, as per management.
For FY26E, we have assumed an average price of Rs9.6mn after incorporating the price impact of the PHEV variant (launched in Aug 2025) and upcoming PHEV models in 4QFY26.
For FY27F, we expect average net sales per vehicle to reach Rs11.6mn, reflecting the full-year impact of Cannon Alpha and Tank 500.
