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    Rico Auto Inds

    RICOAUTO
    Automobile and Auto Components·1 Jun 2026
    Management Summary

    Rico Auto Industries reported its highest-ever annual revenue of INR 2,477 crores in FY26, a 12% YoY increase, driven by robust domestic and export demand. Despite non-recurring impacts totaling INR 30 crores for the full year, the adjusted EBITDA margin stood at 10.25%. The company secured new orders worth INR 2,500 crores and anticipates significant growth in railway and defense segments, alongside an improved margin outlook for FY27, with Q1 FY27 margins expected to be above 10%.

    Highlights

    5

    • Highest ever annual revenue of INR 2,477 crores, marking a 12% YoY growth in FY26.

    • Adjusted FY26 EBITDA margin improved to 10.25% after accounting for one-time impacts.

    • Secured new orders worth approximately INR 2,500 crores, providing strong future growth visibility.

    • Working capital days significantly improved to 7 days from 33 days in the previous year.

    • Exports to U.S. and Germany are expected to double in the next two years, with overall exports growing 32% in FY27.

    Concerns

    3

    • Non-recurring impacts of INR 3.6 crores (Labour Code) and INR 11.22 crores (lag settlement) affected Q4 FY26 profitability.

    • Raw material prices remained volatile during the year, impacting margins before renegotiations.

    • Geopolitical issues pose a risk to the global economic environment and business outlook.

    Key financials

    Metrics

    10

    Periods

    2

    Q4 FY26

    5
    • Revenue
      ₹677 Cr
    • EBITDA
      ₹47.8 Cr
    • EBITDA Margin
      7.1%
    • Adjusted EBITDA Margin
      9.8%
    • PAT
      ₹6.9 Cr

    FY26

    5
    • Revenue
      ₹2,477 Cr
      YoY+12%
    • EBITDA
      ₹223 Cr
    • EBITDA Margin
      9%
    • Adjusted EBITDA Margin
      10.3%
    • PAT
      ₹52.4 Cr
      YoY+1.7%

    Segment breakdown

    Share of Total RevenueRevenue
    Aluminum Business (FY26)88%₹2,155 Cr
    Ferrous Business (FY26)12%₹322 Cr
    Exports (FY26)16%—
    Heatmap· 2 shared metrics

    Order Book

    high confidence

    Total Value

    ₹ 2,500 crores

    as of 2026-03-31

    quantified

    Inflow this qtr

    ₹ 2,500 crores

    Execution

    over a program life of 5 years

    "New orders provide strong visibility for future growth, with INR 500 crores incremental revenue expected in FY27."

    Source:
    Prepared remarks

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Net ₹686 crores · 3.8x EBITDA

    Liquidity

    Liquidity disclosed

    Cash flow from operations stood at INR331 crores during FY '26.

    Guidance & targets

    14
    CategoryTargetPriority
    Exports
    Export growth to U.S. and Germany
    2x
    		High
    Exports
    Exports growth
    32%
    		High
    Automotive Volume
    Passenger Vehicle segment growth
    5-7%
    		High
    Automotive Volume
    2-wheeler segment growth
    6-8%
    		High
    Automotive Volume
    Commercial vehicles growth
    4-6%
    		High
    Automotive Volume
    3-wheelers growth
    9-10%
    		High
    EV Penetration
    2-wheeler EV penetration
    7-8%
    		High
    Revenue
    Railway business revenue
    INR 100 crores
    		High
    Revenue
    Defense business revenue
    INR 50 crores
    		High
    Revenue
    Total Revenue
    cross INR 3,000 crores
    		High
    Revenue
    Incremental revenue from new orders
    INR 500 crores
    		High
    Profitability
    EBITDA margin
    higher than 10.25%
    		High
    Profitability
    EBITDA margin
    10% plus
    		High
    Asset Monetization
    Property sale
    completion
    		Medium

    Q1 FY27 EBITDA margin

    next quarter
    CurrentAdjusted Q4 FY26 EBITDA margin 9.8%
    Target10% plus

    Why it matters

    To confirm the sustained improvement in profitability following renegotiations and one-time📎 adjustments.

    So from Q1 itself, we will see 10% plus kind of a margin. I mean, would that be a fair assumption? ... Yes. That's correct.

    How to verify

    key_financials.metrics[label='EBITDA Margin (Q1 FY27)']

    Risks & concerns

    4
    RiskSeverity

    Global uncertainties and geopolitical issues

    Ongoing geopolitical issues could impact business, potentially leading to a 'disaster'. — Management acknowledged

    medium

    Raw material price volatility

    Aluminum and other raw material prices remained volatile due to global commodity market fluctuations. — Management acknowledged

    medium

    Lag settlement impact on profitability

    A lag in raw material price settlements with customers impacted profitability by INR 19 crores in FY26. — Management acknowledged

    medium

    Labour Code impact on profitability

    The Labour Code impact reduced FY26 profitability by INR 11 crores. — Management acknowledged

    low

    Q&A highlights

    8

    “So if you include these nonrecurring impact, which is there in Q4, I guess the EBITDA, which is currently appearing at 7.6%, will rise to 9.8%. And similarly, if you look at the entire year, currently, the EBITDA is hovering at around 9%, wherein the impact of Labour Code is INR11 crores and the impact of lag settlement of raw material is around INR19 crores. So if you exclude this onetime impact, the margin increases from 9-odd percent to 10.25%.”

    Clarified the impact of one-time items on Q4 and FY26 margins and provided adjusted figures, setting a baseline for FY27 margin expectations.

    asked by Deepak Poddar

    2 min read5 chapters

    Detailed Narrative

    01

    Strong FY26 Performance Driven by Demand and New Programs

    Rico Auto Industries achieved its highest-ever annual revenue of INR 2,477 crores in FY26, representing a 12% year-on-year growth. This performance was underpinned by healthy domestic and export demand, operational improvements, and the ramp-up of new programs across various business segments. The company's export business, particularly to the U.S. and Germany, demonstrated strong growth, with expectations to double in the next two years.

    02

    Profitability Impacted by Non-Recurring Items, Strong Recovery Expected

    The company's profitability in Q4 FY26 and for the full FY26 was affected by non-recurring📎 impacts, including INR 3.6 crores in Q4 (INR 11 crores for FY26) due to Labour Code adjustments and INR 11.22 crores in Q4 (INR 19 crores for FY26) from raw material lag settlements. Excluding these one-time📎 impacts, the adjusted EBITDA margin for FY26 stood at 10.25%, up from 9%. Management expects FY27 EBITDA margins to improve further, exceeding 10.25%, with Q1 FY27 margins projected to be above 10%.

    03

    Strategic Focus on New Orders and Diversification into Railways and Defense

    Rico Auto Industries secured new orders worth approximately INR 2,500 crores over a five-year program life, providing robust visibility for future growth, with INR 500 crores incremental revenue expected in FY27. The company is also actively diversifying into the railway and defense sectors, targeting INR 100 crores in revenue from railways and INR 50 crores from defense in FY27. Approvals for railway components are progressing, and the first lot has already been dispatched.

    04

    Capital Allocation and Debt Management

    Net debt as of March 2026 stood at INR 686 crores, with a net debt to EBITDA ratio hovering around 3.75x. The company has a clear repayment schedule, with approximately INR 110-120 crores in debt expected to be paid off annually over the next 2-3 years, indicating a downward gliding path for debt. Investment in the Hosur facility, aimed at hybrid and EV-related programs, is progressing and is expected to be operational by September 2026, supported by a INR 39 crores subsidy from the Tamil Nadu government.

    05

    Raw Material Management and Product Portfolio Optimization

    To counter raw material price volatility, the company has successfully renegotiated its RM settlement cycle with 75% of its customers by value to a monthly basis. Additionally, Rico Auto is reviewing its entire product portfolio to identify and renegotiate low-margin products, aiming to improve overall product profitability. This proactive approach is expected to contribute to margin expansion beyond the adjusted 10.25% achieved in FY26.

    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.