Pricol Ltd — Q1 FY26 earnings call

Call held 1 Aug 2025

Management summary

Pricol Ltd reported a strong Q1 FY26, with significant revenue growth of 45.57% and healthy margins, outperforming a muted market. The company is actively integrating its acquisition, PRICOL Precision, and investing in new products like disc brakes, e-cockpits, and BMS, while also focusing on backward integration to mitigate supply chain risks, particularly for displays. Despite headwinds from rare earth magnet shortages, management expects steady growth, supported by new product launches and strategic customer engagements.

Highlights

  • Revenue from operations stood at INR 877.66 crores, up 45.57% YoY.

  • EBITDA was INR 101.8 crores, with an EBITDA margin of 11.61%.

  • Profit After Tax (PAT) reached INR 49.89 crores, resulting in a PAT margin of 5.68%.

  • Earnings Per Share (EPS) increased to INR 4.09.

  • Consolidated long-term borrowing as of Q1 FY26 was Rs. 109.7 crores.

  • PRICOL Precision Products Private Limited (PPPPL) clocked a turnover of INR 205 crores with an EBITDA of 7% in Q1 FY26.

  • The company plans a consolidated CAPEX of INR 500 crores over the next three years, with INR 250-300 crores allocated to PRICOL Precision.

  • Disc brake production for a major two-wheeler customer is set to begin in Q4 FY26, driven by ABS regulation becoming mandatory from January 2026.

Concerns

  • Shortage of Rare Earth Magnets

Key financials

  1. Revenue ₹877.66 Cr +45.6%YoY
  2. EBITDA ₹101.8 Cr +26.3%YoY
  3. EBITDA Margin 11.6%
  4. PAT ₹49.89 Cr +9.5%YoY
  5. PAT Margin 5.7%
  6. EPS ₹4.09
  7. Cash Profit Growth 0.239 decimal fraction
  8. Consolidated Long-term Borrowing ₹109.7 Cr

What they filed

Q1 FY27: revenue up 24.7%, net profit up 25.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue664 630 624 683 758 +14%800 +27%856 +37%852 +25%
EBITDA74 69 65 78 88 +19%90 +30%95 +46%93 +19%
Net profit42 36 28 39 46 +10%44 +22%78 +179%49 +26%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • PRICOL Precision Products Private Limited
    ₹205 Cr Revenue7% EBITDA
  • Revenue Mix
    65% Two-wheelers10% Personal Passenger Vehicle15% Commercial Vehicle10% Off-road Vehicle and Tractors

Guidance & targets

Capacity

  • PRICOL Precision Products Revenue Growth from existing capacity Capacity · null · High confidence 20-22%
    And capacity utilization is something like the Company can scale up for another 20-22% further revenue with existing capacities.

    — P.M Ganesh

Capex

  • Consolidated CAPEX Capex · next 3 years · High confidence INR 500 crores
    In the next three years, we will be spending somewhere around Rs. 500 crores of CAPEX on a consolidated level.

    — P.M Ganesh

  • PRICOL Precision CAPEX Capex · next 3 years · High confidence INR 250-300 crores
    Out of the INR 500 crores of CAPEX, like INR 250 to Rs. 300 crores will be for PRICOL Precision and balance will be for PRICOL Limited.

    — Management

Product Launch

  • Disc Brake Mass Production Start Product Launch · Q4 FY26 · High confidence Q4 FY26
    Also, one of our strategic two-wheeler customers, our mainframe customer, we are going to start the productionization from Q4 of this financial year.

    — P.M Ganesh

  • ABS Regulation Mandatory Product Launch · January 2026 · High confidence January 2026
    the ABS regulation is becoming mandatory from January 2026 even starting with the 100cc two-wheelers

    — P.M Ganesh

Profitability

  • PRICOL Precision EBITDA Profitability · FY26 · Medium confidence healthy single-digit
    we are quite confident this year we will be launching comfortably a healthy single-digit EBITDA and at a consolidated level to maintain the EBITDA rate for the organization overall.

    — Siddharth Manoharan

New Product Revenue

  • Domino Technology License Agreement Revenue Start New Product Revenue · 12-16 months from now · Medium confidence 12-16 months
    we are quite confident to start seeing some revenues twelve to sixteen months from here on.

    — Siddharth Manoharan

Backward Integration

  • Displays Backward Integration/Localization Start Backward Integration · next four quarters · Medium confidence some kind of backward integration or localization
    Our target is that in the next four quarters, we should be in a position to start some kind of backward integration or localization of the displays.

    — P.M Ganesh

Market Performance

  • Outperform Market Market Performance · medium term · Medium confidence continue trend
    In the past quarters, we have been outperforming the market on a steady state. We are hopeful that we will continue the same trend.

    — P.M Ganesh

Risks & concerns

  • Shortage of Rare Earth Magnets

    high

    Primarily due to restrictions from China, this issue caused headwinds in Q1 and is expected to continue in Q2, impacting OEM vehicle sales, especially two-wheelers. Management is working on alternate plans to mitigate the risk.

    Management acknowledged

  • Dependence on China for Displays

    medium

    China is the largest source for displays globally. While PRICOL has mitigated most China-sourced products since 2020, 100% de-risking for displays is not possible, though backward integration/localization efforts are underway for the next four quarters.

    Management acknowledged

  • Geopolitical Issues & US Tariffs

    low

    Analyst raised concerns about global auto market slowdown and potential impact on Indian OEMs due to US tariffs. Management stated no uncertainty seen as tariffs are not firmed up and no current impact on products or export strategy.

    Analyst downplayed

Areas of evasion (4)

  • specific growth targets amidst supply chain issues
  • timeline for margin convergence of acquired entity
  • specific customer names and revenue share
  • detailed content per vehicle for new products

Q&A highlights

0 direct, 2 evasive
PRICOL Precision Products (PPPPL) Margin Convergence and Growth Strategy Partial
PPPPL is not any turnaround. The Company itself is quite healthy in terms of the growth potential... after PRICOL's takeover, there are a lot more synergies opening up for us, considering our larger pool of customer portfolio... Confident this year we will be launching comfortably a healthy single-digit EBITDA and at a consolidated level to maintain the EBITDA rate for the organization overall.

Analysts were keen on understanding the profitability trajectory and growth drivers for the newly acquired entity, especially its path to matching parent company margins and expanding beyond its traditional customer base. Management provided a directional target for EBITDA but no specific timeline for margin convergence.

Asked by Vijay Pandey

Impact of Rare Earth Magnet Shortage on Growth Guidance Evasive
I would not be in a position to attribute any number to this. But what we can tell is we are working constantly on a number of alternate plans to mitigate this.

This question directly challenged management on previously stated growth guidance (11-13%) in light of a significant supply chain issue. Management acknowledged the risk but refrained from reaffirming or revising the specific growth target, indicating uncertainty.

Asked by Khush Nahar

Top 3 Customers and Revenue Share Evasive
That would be difficult because of the confidentiality that we have with each of the customers. It will be difficult for us to give the breakup.

Understanding customer concentration is crucial for assessing business risk. While management indicated the top customers are primarily from the two-wheeler segment, they declined to provide specific names or revenue shares due to confidentiality, limiting investor insight into customer dependence.

Asked by Manish

2 min read 6 chapters

Detailed narrative

Strong Q1 FY26 Performance Amidst Market Headwinds

Pricol Ltd delivered a robust Q1 FY26, with revenue from operations growing by a healthy 45.57% year-on-year to INR 877.66 crores. EBITDA stood at INR 101.8 crores, achieving a margin of 11.61%, while Profit After Tax (PAT) was INR 49.89 crores, with a PAT margin of 5.68%. Despite a muted overall OEM vehicle sales market, which grew less than 2% in Q1, Pricol outperformed across all segments, including two-wheelers, commercial vehicles, passenger cars, construction equipment, and tractors, demonstrating double-digit growth.

Strategic Integration and Growth of PRICOL Precision Products

The acquired entity, PRICOL Precision Products Private Limited (PPPPL), contributed significantly, clocking a turnover of INR 205 crores in Q1 FY26 with an EBITDA of 7%. Management highlighted successful integration efforts and a comprehensive profitability improvement plan expected to yield better results from Q2 onwards. PPPPL, traditionally reliant on TVS, is now leveraging Pricol's broader customer ecosystem to expand its client base and is confident of achieving a healthy single-digit EBITDA for FY26.

Investments in Future Growth and Capacity Expansion

Pricol plans a consolidated CAPEX of INR 500 crores over the next three years, with INR 250-300 crores specifically allocated to PRICOL Precision for its handlebar foray and other initiatives. The existing capacity of PPPPL can support an additional 20-22% revenue growth. The company is also making forward-looking recruitments, reflected in employee costs at around 12% of sales, to support new projects launching in the next couple of years.

New Product Launches and Regulatory Tailwinds

The company is strategically positioned for growth with new product launches and regulatory changes. Disc brakes, launched in Q2 FY26, are expected to see significant incremental growth as ABS regulation becomes mandatory for 100cc two-wheelers from January 2026. Mass production for a major two-wheeler customer is slated to begin in Q4 FY26. Additionally, new products like e-cockpits and Battery Management Systems (BMS) are currently undergoing testing at various customer sites.

Mitigating Supply Chain Risks and Export Focus

Pricol is actively addressing supply chain vulnerabilities, particularly the shortage of rare earth magnets, which caused headwinds in Q1 and is expected to continue in Q2. Management is implementing "plan B" and alternate strategies to mitigate this risk. For displays, where China is a dominant source, Pricol aims to initiate backward integration or localization within the next four quarters. Exports currently constitute 7-8% of revenue, with good opportunities identified in the US and European markets for ACFMS products.

Diversified Revenue Mix and Value-Driven Growth

The company's revenue mix is diversified, with approximately 65% from two-wheelers, 10% from personal passenger vehicles, 15% from commercial vehicles, and 10% from off-road vehicles and tractors. Pricol has consistently focused on value growth over mere volume growth in recent years, driven by premiumization in the driver information system space and the conversion from mechanical meters to high-end electronics. This trend is expected to continue, ensuring sustained growth momentum.

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