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    Precision Camshafts Limited

    PRECAM
    Automobile and Auto Components·2 Dec 2025
    Management Summary

    Precision Camshafts Limited reported a significant net loss of INR42.65 crores in Q2 FY26, primarily driven by an exceptional impairment charge of INR49.7 crores related to the liquidation of its German subsidiary, MFT GmbH, due to the European economic slowdown. Despite this, the standalone Indian business remained stable with INR149 crores revenue and a 14% EBITDA margin, bolstered by new order wins totaling INR1,500 crores. The company is investing INR120 crores in new projects and continues to develop its electric heavy commercial vehicle business, while scaling back on small EV retrofits.

    Highlights

    5

    • Standalone revenue of INR149 crores with an EBITDA margin of 14%, demonstrating stability in Indian market.

    • Secured new businesses from key customers (Maruti Suzuki, Hyundai, Mahindra, UzAuto) amounting to a cumulative order book of nearly INR1,500 crores.

    • Investing INR120 crores in new projects, including state-of-the-art manufacturing plants in Solapur, to support future growth.

    • MEMCO subsidiary reported a 12.6% QoQ growth in total income to INR14.3 crores.

    • EMOSS subsidiary revenue grew 38.4% QoQ to INR22 crores and is stable and self-sufficient.

    Concerns

    4

    • Reported a net loss of INR42.65 crores for Q2 FY26, compared to a profit of INR25.6 crores in Q1 FY26.

    • Exceptional item of INR49.7 crores due to impairment of investments in MFT GmbH, which initiated liquidation.

    • MFT GmbH's liquidation is a direct result of the massive economic slowdown in European markets and acute liquidity constraints.

    • Slowdown in Tata Ace EV conversion business due to regulatory changes and lack of demand visibility.

    What Changed2

    vs Q3 FY26

    Guidance items2 → 5 (+3)Risks discussed2 → 3 (+1)

    Key financials

    Single quarter

    08 metrics
    1. 01PCL Limited Net Profit₹-42.65 Cr-3.3%YoY
    2. 02Exceptional Items₹49.7 Cr
    3. 03PCL Standalone Revenue₹149.5 Cr
    4. 04PCL Standalone EBITDA Margin13.7%
    5. 05PCL Standalone PAT Margin-28%

    Segment breakdown

    MEMCO
    ₹14.3 Cr Total Income
    EMOSS
    ₹22 Cr Total Revenue
    MFT GmbH
    ₹28 Cr Revenue
    List

    Order Book

    high confidence

    Total Value

    ₹ 1,500 crores

    as of 2025-09-30

    quantified

    Execution

    over the lifetime of these programs, which will extend its order book up to 2032

    "New orders from key customers like Maruti Suzuki, Hyundai India, Mahindra, and UzAuto for various engine types and assembled camshafts, contributing to a significant lifetime order book."

    Source:
    Prepared remarks

    Capital allocation

    2
    medium confidence
    CategoryHeadline
    Capex

    ₹120 crores

    M&A

    MFT GmbH

    divestment · integrated

    Guidance & targets

    5
    CategoryTargetPriority
    Order Book
    New business order book value
    INR1,500 crores
    		High
    Capex
    Investment for new projects
    INR120 crores
    		High
    New Projects
    Start of Production (SOP) for new programs
    Next year (calendar year '26)
    		High
    EV Business
    Delivery of first heavy commercial vehicles (HCV)
    First vehicles
    		High
    Camshaft Volumes
    Substantial jump in volumes for camshafts (machine and casting)
    Substantial jump
    		Medium

    MFT GmbH financial impact

    Next quarter onwards
    CurrentINR49.7 crores impairment, losses reported in Q2 FY26
    TargetNo further write-offs or losses from MFT GmbH reported

    Why it matters

    To confirm the one-time📎 nature of the MFT impairment and the cessation of its financial drag on consolidated results.

    So, from next quarter onwards, we will not report losses also from that subsidiary, right? Yes, correct.

    How to verify

    key_financials.metrics[label='PCL Limited Net Profit']

    Risks & concerns

    3
    RiskSeverity

    European economic slowdown impacting MFT GmbH

    Massive economic slowdown in European markets caused acute liquidity constraints for MFT GmbH, leading to its insolvency and a significant impairment charge of INR49.7 crores. — Management acknowledged

    high

    Regulatory changes and lack of demand visibility for EV retrofitting

    Change in regulations and insufficient demand visibility led to scaling back the Tata Ace EV conversion business and less aggressive pursuit of small EV retrofits. — Management acknowledged

    medium

    General market conditions impacting future volume growth

    Management's projections for future camshaft volume growth are subject to the disclaimer that 'all market situations remain the same'. — Management acknowledged

    low

    Q&A highlights

    8

    “No, sir. This is a complete write-off of our investments into MFT GmbH, and there will be no further write-offs.”

    Clarifies that the INR49.7 crores impairment is a one-time event and no further financial hits from MFT are expected.

    asked by Vipul Kumar Shah

    2 min read5 chapters

    Detailed Narrative

    01

    Q2 FY26 Financial Overview and MFT Impairment

    Precision Camshafts Limited reported a net loss of INR42.65 crores in Q2 FY26, a significant decline from profits of INR25.6 crores in Q1 FY26 and INR18.3 crores in Q2 FY25. This loss was primarily driven by an exceptional item📎 of INR49.7 crores, stemming from the impairment of investments in its German step-down subsidiary, MFT GmbH. MFT GmbH has initiated liquidation due to the severe economic slowdown in European markets and acute liquidity constraints, leading to its non-consolidation going forward⏳.

    02

    Standalone Business Resilience and New Order Wins

    Despite the consolidated loss, PCL's standalone Indian operations demonstrated stability, achieving a revenue of INR149.5 crores with a healthy EBITDA margin of 13.7%. This performance was attributed to increased demand from existing domestic customers. The company has secured new businesses from key clients like Maruti Suzuki, Hyundai India, Mahindra, and UzAuto, contributing to a cumulative order book of nearly INR1,500 crores over the lifetime of these programs, extending up to 2032.

    03

    Strategic Investments and Project Timelines

    To support the new order wins, PCL is investing approximately INR120 crores in new projects, including the establishment of state-of-the-art manufacturing plants in Solapur. These new programs are currently in execution mode and are expected to commence Start of Production (SOP) in various parts of calendar year 2026. Management anticipates a substantial jump in camshaft volumes, including machine and assembled camshafts, within the next 1 to 2 years as these projects ramp up.

    04

    E-Mobility Business Update and Strategic Shifts

    PCL provided an update on its e-mobility ventures, noting a slowdown in the Tata Ace conversion business due to regulatory changes and reduced demand visibility. However, the development of the electric heavy commercial vehicle (HCV) segment is progressing, with the company expecting to deliver the first vehicles to customers within the current financial year. The Netherlands-based EMOSS subsidiary reported a revenue of INR22 crores in Q2 FY26, up from INR15.9 crores in Q1 FY26, and is currently stable and self-sufficient.

    05

    Subsidiary Performance and Future Outlook

    Beyond the MFT GmbH liquidation, other subsidiaries showed positive trends. MEMCO reported a total income of INR14.3 crores in Q2 FY26, an increase from INR12.7 crores in the previous quarter, driven by new customer onboarding and existing demand. While EMOSS is stable, management acknowledged it is not performing to expectations but is not a financial drain. The company's primary focus remains on the core camshaft business in Solapur, India, where strong growth visibility is anticipated from new orders.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.