Skip to content

    Precision Camshafts Limited

    PRECAM
    Automobile and Auto Components·11 Jun 2025
    Management Summary

    Precision Camshafts Limited reported a mixed Q4 FY25, with standalone revenue growing 3% QoQ to INR147.5 crores, but a net loss of INR34 crores due to a significant impairment charge. Consolidated revenue also saw a modest 2.7% QoQ growth to INR200.7 crores. While the core camshaft business secured new long-term orders and is investing in new capacity, the EV segment faces demand slowdowns and challenges in converting Letters of Intent into firm orders.

    Highlights

    5

    • PCL standalone revenue increased by 3% QoQ to INR147.5 crores.

    • Consolidated business grew by 2.7% QoQ to INR200.7 crores.

    • MEMCO reported a net profit of INR0.21 crores on total income of INR11.2 crores.

    • New orders for camshafts secured up to 2030 and beyond.

    • Progress on new greenfield site for assembled camshafts, with production expected next year.

    Concerns

    4

    • PCL standalone reported a net loss of INR34 crores in Q4 FY25, compared to a profit of INR5.3 crores in the previous quarter, primarily due to exceptional items.

    • An impairment of investment in a foreign subsidiary amounting to INR73 crores was recorded.

    • EV business in Europe and India is experiencing slower-than-anticipated demand due to macroeconomic reasons and geopolitical instability.

    • Camshaft business revenue declined to INR137 crores in March '25 from INR170 crores in March '24.

    What Changed2

    vs Q1 FY26

    Risks discussed4 → 5 (+1)Q&A highlights6 → 8 (+2)

    Key financials

    Single quarter

    06 metrics
    1. 01PCL Standalone Revenue₹147.5 Cr+3%QoQ
    2. 02PCL Standalone Net Loss₹-34 Cr
    3. 03PCL Standalone EBITDA Margin18%
    4. 04Consolidated Revenue₹200.7 Cr+2.7%QoQ
    5. 05Consolidated EBITDA Margin18%

    Segment breakdown

    MEMCO
    ₹11.2 Cr Total Income₹0.21 Cr Net Profit
    EMOSS
    ₹16.9 Cr Total Revenue₹12.7 Cr Previous Quarter Revenue₹9.37 Cr EBITDA (non-operational)₹1 Cr Operational EBITDA
    MFT
    ₹25.26 Cr Total Income
    List

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Guidance & targets

    3
    CategoryTargetPriority
    Capacity
    Assembled Camshafts Start of Production (SOP)
    Q3 next financial year
    		High
    Revenue
    Revenue from Assembled Camshafts Project
    1.5x capex per year (INR 120 crores)
    		High
    Product Launch
    Heavy Commercial Vehicle Electrified Powertrain Launch
    On the road by end of calendar year
    		High

    Assembled Camshafts Start of Production (SOP)

    Q3 FY26
    CurrentProgressing as per plan, expected next year
    TargetCommercial production by Q3 FY26

    Why it matters

    Key milestone for new revenue stream and diversification into advanced products.

    And I'm happy to share that progress on our new greenfield site for assembled camshafts is progressing as per plan with start of production expected next year.

    How to verify

    guidance_and_targets[metric='Assembled Camshafts Start of Production (SOP)']

    Risks & concerns

    5
    RiskSeverity

    EV demand slowdown in Europe and India

    The EV business is experiencing slower-than-anticipated demand due to macroeconomic reasons, geopolitical instability, technology uncertainty, pricing, infrastructure, and total cost of ownership. — Management acknowledged

    high

    Supply chain instability for EV components

    Variability and instability in the supply chain, particularly for rare earth materials, directly impact EV components. — Management acknowledged

    medium

    Government intervention favoring hybrid vehicles

    Recent government intervention regarding more hybrid vehicles creates uncertainty for pure EV adoption. — Management acknowledged

    medium

    General auto sector slowdown impacting camshaft business

    The overall OEM demand is reduced, and markets are not in the healthiest position, though management views this as a transient issue. — Both acknowledged

    medium

    Difficulty in converting EV Letters of Intent (LOIs) to firm orders

    Despite having LOIs from several customers for large numbers, conversion to real orders is slow due to customer indecisiveness and delayed decision-making. — Management acknowledged

    medium

    Q&A highlights

    8

    “I mean in general, the EV business in Europe is slagging because of a slowdown in demand. There are various macroeconomic reasons for that. And it's the same experience that most other OEMs have as we have. We still continue to sustain the business.”

    Provides management's perspective on the challenges and slowdown affecting their EV segment in key markets.

    asked by Gautam Rajesh

    2 min read6 chapters

    Detailed Narrative

    01

    Q4 FY25 Performance Overview

    Precision Camshafts Limited reported a standalone revenue of INR147.5 crores for Q4 FY25, marking a 3% increase quarter-on-quarter. The consolidated business also saw a 2.7% QoQ growth, reaching INR200.7 crores. Standalone and consolidated EBITDA margins stood at 18%, with a consolidated PAT margin of 20%.

    02

    Exceptional Items and Profitability Impact

    The company recorded a standalone net loss of INR34 crores in Q4 FY25, a significant shift from a profit of INR5.3 crores in the previous quarter. This loss was primarily driven by exceptional items📎, including a positive compensation recovery of INR35.6 crores from a customer for underutilized capacity, offset by a substantial impairment of investment in foreign subsidiaries amounting to INR73 crores. The net effect of these items resulted in a loss of INR34.36 crores.

    03

    Subsidiary Performance (MEMCO, EMOSS, MFT)

    MEMCO reported a profit, with total income of INR11.2 crores and a net profit of INR0.21 crores, attributed to increased domestic business. EMOSS, the E-mobility subsidiary in the Netherlands, continued to face challenges due to geopolitical instability and lack of demand, though its revenue increased to INR16.9 crores from INR12.7 crores QoQ. Its reported EBITDA of INR9.37 crores was not purely operational, with management clarifying operational EBITDA was closer to INR1 crore (6-7%). MFT in Germany stabilized operations, recording INR25.26 crores in total income, and is diversifying into non-engine components.

    04

    EV Business Update (India & Europe)

    The EV business, particularly in Europe, is experiencing a slowdown in demand due to macroeconomic factors. In India, while successful deployment with 15+ customers across logistics and e-commerce in eight cities has occurred, the overall offtake has been slower than anticipated. The company is actively developing solutions for heavy commercial vehicles, including an electrified powertrain for a specialized application, expected to be on the road by the end of 2025.

    05

    Camshaft Business Outlook and New Capacity

    Despite a general auto sector slowdown🌐, PCL secured new orders for camshafts extending up to 2030 and beyond. The company is investing approximately INR80 crores in a new greenfield facility for assembled camshafts, with INR40 crores for specific projects and another INR40 crores for plant and building. This facility is expected to commence production by Q3 of the next financial year (FY26) and generate annual revenue equivalent to 1.5 times its capex, or INR120 crores.

    06

    Diversification Efforts

    PCL is actively diversifying its product portfolio, particularly in its subsidiaries. MFT is focusing on new non-engine components, including parts for heating and ventilation, chassis, and other non-engine applications. MEMCO has also reduced its automotive concentration from 95% to 65-70% by growing its non-automotive business, which has doubled in size. The new assembled camshafts also represent a diversification into new technology.

    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.