Pricol Ltd (BOM:540293) Q1 2026 Earnings Call Highlights: Robust Revenue Growth Amid Market ...
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Pricol Ltd (BOM:540293) reported a healthy revenue growth of 45.57% from operations.
The company achieved a double-digit growth despite a muted market environment, outperforming the industry average.
The introduction of new products and strategic partnerships, such as the technology license agreement with Domino, are expected to drive future growth.
The upcoming ABS regulation is anticipated to open significant growth opportunities for Pricol Ltd (BOM:540293) in the brake systems market.
The company has successfully mitigated risks associated with Chinese imports by initiating backward integration and localization efforts.
Negative Points
Pricol Ltd (BOM:540293) faces uncertainties due to the shortage of rare earth magnets, impacting the two-wheeler segment.
Employee costs have increased to 12% of revenue, attributed to forward-looking recruitments for new projects.
The company is experiencing margin fluctuations due to currency exchange rate volatility and import dependencies.
There is uncertainty regarding the timeline for margin convergence between Pricol Ltd (BOM:540293) and its acquired entity, Pricol Precision Products.
The geopolitical issues and potential US tariffs pose risks to future export strategies and market stability.
Q & A Highlights
Warning! GuruFocus has detected 3 Warning Sign with BOM:507717.
Q: Can you provide a breakdown of sales and EBITDA margin for Pricol Precision Products, and an update on employee expenses? A: We recorded a turnover of approximately 205 crores with an EBITDA margin of around 7% for Pricol Precision Products. Employee costs were about 12%, and we are making forward-looking recruitments for upcoming projects. (Respondent: Unidentified_5 and Unidentified_3)
Q: What is your view on the ABS regulation and its impact on growth? A: The ABS regulation, mandatory from January 2026, presents a significant growth opportunity. We have launched a disc brake system and expect production to start for a strategic customer by Q4 of this financial year. (Respondent: Unidentified_3)
Q: How do you see revenue and margin growth evolving in the coming quarters? A: Q1 was muted due to OEM vehicle sales and rare magnet shortages. We expect headwinds in Q2 but anticipate a stable revival from Q3. We aim to maintain margins around Q1 levels, despite uncertainties. (Respondent: Unidentified_3)
Q: Can you elaborate on the technology license agreement with Domino and its market potential? A: We have an exclusive agreement with Domino for control systems in the Indian and Southeast Asian markets. We expect to see revenue from this in 12 to 16 months. (Respondent: Unidentified_5)
Q: What is the segment-wise revenue contribution, and how do you see export growth? A: Approximately 65% of revenue comes from two-wheelers, 10% from passenger vehicles, 15% from commercial vehicles, and 10% from off-road vehicles and tractors. Exports account for 7-8% of revenue, and we expect this to increase. (Respondent: Unidentified_3)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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