PPAP Automotive Limited

The automotive industry faced a challenging macro environment in FY25, marked by shifting demand and cost pressures. Passenger vehicle sales reached 43.02 lakh units, growing a modest 2% YoY, with utility vehicles up 11% but passenger cars declining 12.6%. Despite these headwinds, PPAP Automotive demonstrated resilience, with its performance reflecting the strength of its business model and operational agility.

PPAP secured new orders totaling INR601 crores in FY25, including INR208 crores from the EV segment, showcasing its growing presence across both ICE and EV platforms. In Q4 alone, new order inflows were INR188 crores, with INR59 crores from EV. A significant milestone was achieved by onboarding Mahindra & Mahindra as a direct customer, and the company has increased its per-car contribution with Kia, strengthening key OEM partnerships.

The Industrial Products division, specializing in application engineering solutions, grew significantly in FY25, now contributing approximately 2% to total sales, and has initiated exports. The aftermarket vertical, Elpis, maintained robust performance with 16% growth, now accounting for 4% of group revenues, and launched over 550 new SKUs. The commercial toolroom, Meraki Precision Molds, delivered an impressive 75% YoY growth in FY25 and has INR25 crores in mould orders for FY26.

The battery division, rebranded as Avinya Batteries, experienced a slower-than-anticipated adoption rate in FY25, contributing to a PAT loss of INR7.9 crores and operating at a mere 5% capacity utilization. However, management is optimistic for FY26, expecting significant expansion from marquee customers and aiming for at least 50% utilization to reach breakeven. The total capital employed in this division is INR380 crores.

PPAP is strategically focused on enhancing profitability in FY26 by improving operational efficiencies. This includes targeting a 1-2% EBITDA margin improvement through better asset utilization (72% for parts, 80% for toolroom, 50% for battery), increasing material yield ratios from 85% to 88-90%, and improving manpower efficiency from 85% to 88-90%. Management noted that raw material prices are stable or weakening, indicating that the worst of cost pressures is behind them.

For FY26, PPAP Automotive expects revenues in the range of INR600 crores to INR660 crores. The company's long-term objective over the next five years is to achieve unprecedented^🌐 growth and de-risk the group by diversifying across customers, segments, and democratic risks, ensuring all business verticals succeed and contribute to overall growth.