Rico Auto Industries LimitedAutomobilesRICOAUTO
Q1 FY27 concall · earnings callRico Auto Industries Limited
Record revenue was overshadowed by severe temporary cost pressures from air freight and raw material price lags, denting profitability despite a strong order book and growth outlook.
Numbers
| Metric | This quarter | Change | Five-quarter trend |
|---|---|---|---|
| Consolidated Revenue | ₹755 Cr | 39% | |
| EBITDA Margin | 4.6% | — | |
| PAT | −₹3.4 Cr | — |
Financials
From filed quarterly results. YoY and QoQ compare each metric on the same accounting basis.
| Quarter | Revenue | Net profit (PAT) | Basic EPS |
|---|---|---|---|
| Q3 FY25 | ₹551.69 Cr+5.4% YoY-4.2% QoQ | ₹1.84 Cr-82.5% YoY-72% QoQ | ₹0.14-81.1% YoY-70.2% QoQ |
| Q2 FY25 | ₹575.78 Cr+4% YoY+6.7% QoQ | ₹6.57 Cr+2% YoY+16.5% QoQ | ₹0.47-6% YoY+11.9% QoQ |
| Q1 FY25 | ₹539.67 Cr+1.1% YoY-1.6% QoQ | ₹5.64 Cr-1.2% YoY-65.4% QoQ | ₹0.420% YoY-65% QoQ |
| Q4 FY24 | ₹548.41 Cr-9.1% YoY+4.8% QoQ | ₹16.29 Cr-37.1% YoY+55.1% QoQ | ₹1.20-37.2% YoY+62.2% QoQ |
| Q3 FY24 | ₹523.52 Cr-4.5% YoY-5.5% QoQ | ₹10.50 Cr+5.7% YoY+63% QoQ | ₹0.74+4.2% YoY+48% QoQ |
TL;DR
- Highest ever quarterly revenue of INR 755 crores, up 39% YoY.
- EBITDA margin fell to 4.6% due to INR 13 crores in air freight and sorting costs and an estimated INR 10 crores lag in raw material price settlements.
- Air freight surged due to shipping disruptions and initial quality issues; costs expected to peak in Q2 and normalize from Q3.
- 55 new programs in launch phase (28 already launched) for Toyota, Ford, BMW with 7-8 year life and high profitability.
- Revenue guidance raised to over INR 3,200 crores for FY27; targeting exit margins near full-year target via price revisions and efficiency.
- New Hosur plant for hybrid/EV programs to start commercial production in September 2026.
Said on the call
“This air freight is an exceptional thing... this is a temporary phase that we had to go through for the new components that we are shipping overseas.”
From the Q&A
| Topic | What management said |
|---|---|
| Air Freight Cost Justification | Analyst questioned why high air freight costs were incurred for a relatively small export base (~12% of revenue), suggesting it would make export orders loss-making. Management explained it was a temporary necessity due to shipping delays (5 to 9 weeks) and quality correlation issues to maintain supply continuity as a single-source supplier for BMW and Toyota; one customer has agreed to pay 50% of the freight cost. |
| Margin Guidance Discrepancy | Analyst challenged why the company guided for 10%+ EBITDA margins in the prior call when the cost pressures were known. Management stated the air freight situation escalated after the call (later part of June) and the shipping time unexpectedly increased to 9+ weeks, which was not factored in earlier. |
| Raw Material Cost Impact | Analyst queried the 13% increase in purchase cost as percentage of sales. Management clarified that INR 10 crores was the air freight/sorting impact (in other expenses), while raw material costs surged due to aluminum price increase from INR 222/kg to INR 349/kg YoY, a 57% rise, with a lag in customer price pass-through. |
| Quarterly Revenue and Margin Trajectory | Management provided specific quarterly revenue projections: Q2 ~INR 840 crores, Q3 >INR 850 crores, Q4 ~INR 900 crores, totaling >INR 3,250 crores for FY27. Margins are expected to improve sequentially, with Q2 better than Q1, and a return to normal profitability from Q3 once air freight ceases and customer price revisions take effect. |
| Growth Strategy and Capex | Analyst asked about the strategic change after a period of high capex (INR 1,000 crores over 5 years) but modest growth. Management highlighted a shift to focus on high-tonnage die-casting machines for long-term programs, improving machine productivity, and redeploying capacity. They stated the current setup can achieve ~INR 4,000 crores revenue without a major new project. |
| New Business Segments (Railways, Defense, CNC) | Railway RDSO approvals are in progress; defense business involves supplying 200 computerized shooting range containers this year. The new initiative to sell internally built CNC machines targets 100 units (INR 35-40 crores revenue) this year, with better margins; this revenue is additive to the INR 3,250 crores guidance. |
Guidance
- Revenue for FY27 is expected to be more than INR 3,200 crores, with a specific target of around INR 3,250 crores.
- Air freight costs are expected to peak in Q2 and cease from Q3 onwards as shipments return to normal sea freight.
- Profitability is expected to improve progressively from Q3 onwards with the cessation of temporary air freight, realization of customer price revisions, and cost optimization.
- Target is to exit the current year near the targeted full year margins (previously stated as ~12%).
- The new Hosur plant is expected to commence commercial production in September 2026.
- Aim to sell 100 CNC machines externally in FY27, generating INR 35-40 crores in additive revenue.
- Expect to supply 200 shooting range containers for the defense business this year.
Source
Summary written from the transcript filed by Rico Auto Industries Limited for the call held on 14 Aug 2026; published 19 Aug 2026, 13:20 IST.
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