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    PPAP Automotive Q1 FY27 earnings call

    PPAP
    Automobile and Auto Components·10 Aug 2026
    Management Summary

    PPAP Automotive Limited reported a strong Q1 FY27, with consolidated revenue growing 34.1% YoY to INR 156.4 crores and EBITDA up 33.3% YoY to INR 12.4 crores. The company secured significant new orders, including INR 64 crores from EV programs, and initiated strategic restructuring for its tooling and battery businesses. While raw material inflation and losses in the battery segment remain concerns, management expects margin recovery by Q2/Q3 and aims for 12-13% sustainable margins for auto ancillaries.

    Highlights

    7

    • Consolidated revenues from operations grew 34.1% year-on-year to INR 156.4 crores.

    • EBITDA increased 33.3% year-on-year to INR 12.4 crores.

    • Secured lifetime orders worth INR 131 crores, representing a growth of 51.8% year-on-year.

    • EV programs contributed INR 64 crores out of the new orders.

    • Aftermarket business revenue increased by 30% year-on-year.

    • Tooling business capacity utilization at 84% with orders for 30 molds.

    • Technology partnership with Hutchinson to enhance sealing system capabilities.

    Concerns

    4

    • Raw material price increases impacted operating margins, with only 2% passed on and 2% still under discussion.

    • Battery business continues to operate in a challenging environment and contributes to losses, remaining a cause of concern.

    • Industrial Products business witnessed moderation in sales due to seasonal demand in Q1 FY27.

    • Achieving pre-COVID margin levels is difficult due to market competitiveness and raw material prices.

    Key financials

    Single quarter

    03 metrics
    1. 01Revenue from Operations₹156.4 Cr+34.1%YoY
    2. 02EBITDA₹12.4 Cr+33.3%YoY
    3. 03EBITDA Margin7.9%

    Segment breakdown

    Aftermarket Business
    30% Revenue Growth6% Contribution to Total Revenue
    Industrial Products Business
    100% Contribution to Total Revenue
    Battery Business
    3% Revenue Growth
    Tooling Business
    84% Capacity Utilization
    List

    Order Book

    high confidence

    Total Value

    ₹ 131 crores

    as of 2026-06-30

    quantified
    51.8% YoY

    Inflow this qtr

    ₹ 131 crores

    Composition

    EV Programs(product)
    ₹ 64 crores48.9%

    "The company secured significant lifetime orders, with a substantial portion coming from EV programs, indicating strong growth momentum."

    Source:
    Prepared remarks

    Capital allocation

    6
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    25% of JV exit proceeds for working capital, rest for strategic capex

    Debt

    Debt disclosed

    M&A

    Joint Venture Company (PPAP Tokai)

    divestment · closed · Consideration ₹NaN (cash)

    M&A

    Tooling Business (Meraki Precision Tools Engineering Limited)

    divestment · pending regulatory

    M&A

    Avinya Batteries Limited

    merger · pending regulatory

    Guidance & targets

    7
    CategoryTargetPriority
    Restructuring
    Meraki Precision Tools Engineering Limited completion
    Completion by Q3 FY27
    		High
    Restructuring
    Avinya Batteries Limited merger completion
    Completion by Q4 FY27
    		High
    Revenue
    Aftermarket Business Contribution to Total Revenue
    10%
    		Medium
    Revenue
    Industrial Products Business Contribution to Total Revenue
    10%
    		Medium
    Volume
    Tooling Business Output Increase
    20%
    		High
    Debt
    Net Debt Status
    Debt free
    		Medium
    Profitability
    Sustainable Operating Margins (Auto Ancillaries)
    12-13%
    		High

    What to watch in Q2 FY27

    5

    Raw material cost pass-through

    By end of Q2 and start of Q3 FY27
    Current50% passed on, 50% under discussion
    TargetSettlement of remaining price increases with customers

    Why it matters

    Successful pass-through is crucial for margin recovery and achieving sustainable profitability targets.

    And we are hopeful that by end of Q2 and the start of Q3, we will be able to settle those price increases also with the customer.

    Risks & concerns

    4
    RiskSeverity

    Raw material inflation and pricing pressure

    Raw material inflation remains a near-term watch item; only 50% of recent cost increases have been passed on to customers, with the rest under discussion. — Management acknowledged

    medium

    Losses in Battery Business

    The battery business continues to operate in a challenging environment and contributes to losses, remaining a cause of concern despite revenue growth. — Management acknowledged

    high

    Geopolitical developments and supply chain dynamics

    The company remains watchful of geopolitical developments, commodity price movements, and global supply chain dynamics that could influence the operating environment. — Management acknowledged

    medium

    Difficulty in achieving pre-COVID margin levels

    Due to increased competitiveness and raw material price changes, achieving pre-COVID margin levels is considered very difficult. — Management acknowledged

    medium

    Q&A highlights

    7

    “With the Hutchinson, we have signed a technology partnership agreement wherein we're developing new solutions for all the customers, not only covering only European, but across all the segments. So currently, we are engaging with the customers to look for more opportunities for these new solutions, along with our engagement with the existing customers. But basically, business in the automotive sector is being conducted in two ways. The companies that are already doing business are continuing to do so. ... And so I think by end of this year, we should have some clarity on that.”

    Analyst sought specific revenue numbers and timeline for the new technology partnership, but management provided qualitative progress and a general timeline for clarity.

    asked by Hardik Chheda

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance Overview

    PPAP Automotive Limited commenced FY27 with strong momentum, building on previous quarters' progress. Consolidated revenues from operations grew 34.1% year-on-year to INR 156.4 crores, driven by higher production volumes, improved operating leverage, and better capacity utilization. EBITDA also saw a significant increase of 33.3% year-on-year, reaching INR 12.4 crores. This performance reflects the positive outcomes of sustained efforts and strategic initiatives.

    02

    Strategic Initiatives and Restructuring

    The company is undergoing significant strategic restructuring. The divestment of its stake in a joint venture company was completed, yielding INR 100 crores, with INR 8 crores used for taxes and 25% of the balance for working capital. The tooling business is being hived off into a wholly-owned subsidiary, Meraki Precision Tools Engineering Limited, expected to complete by Q3 FY27. Additionally, the merger of Avinya Batteries Limited with the parent entity is in progress, anticipated to conclude by Q4 FY27, aiming to streamline operations and improve efficiencies.

    03

    Business Segment Performance

    The automotive part business remained the largest revenue contributor, benefiting from strong industry performance and new vehicle program ramp-ups. The aftermarket business grew 30% year-on-year, now contributing around 6% to total revenues, with a target to reach 10%. The tooling business maintained an 84% capacity utilization and secured orders for 30 molds, aiming for a 20% increase in output this year. The industrial products business saw moderated sales but targets 10% of overall revenues in the medium term. The battery business, despite 4x revenue growth, continues to face challenges and contribute to losses.

    04

    Technology Partnership with Hutchinson

    A key strategic milestone in Q1 FY27 was the technology partnership with Hutchinson, a global leader in automotive sealing systems. This collaboration will enable PPAP to offer advanced body sealing solutions to Indian customers, enhancing technology capabilities, accelerating new product development, and expanding addressable opportunities. The company is currently engaging with customers to leverage this partnership, with clarity on revenue translation expected by year-end.

    05

    Margin Outlook and Raw Material Impact

    Operating margins in Q1 were impacted by raw material price increases, with approximately 4% cost increase. The company managed to pass on about 2% to customers, while the remaining 2% is under discussion. Management is hopeful of settling these price increases by the end of Q2 or early Q3 FY27, which should lead to improved EBITDA margins. For the longer term, the company targets sustainable margins of 12% to 13% for its automotive ancillary business, acknowledging that pre-COVID margin levels are difficult to achieve due to market dynamics.

    06

    Capital Allocation and Debt Reduction

    The company plans strategic capex investments in FY27, focusing on EPDM product capability development, toolroom expansion, and land acquisition near Sambhaji Nagar. This includes operationalizing one new EPDM line in Q2 and investing in two more. A portion of the JV exit proceeds will fund these initiatives. The company has a long-term target to become debt-free at the net level within the next three years, indicating a focus on strengthening its balance sheet.

    This is an AI-generated summary of a publicly available earnings call transcript.