IGARASHI - Igarashi Motors

📊 NSE: IGARASHI 🏢 Electric Equipment 📅 Last Updated: 12/14/2025 7:55

💰 Financial Performance

Revenue Growth by Segment

Total operating income grew 17.5% YoY to INR 656.25 Cr in FY23 from INR 558.61 Cr in FY22. 9MFY23 revenue grew 15% YoY to INR 488.01 Cr, driven by improved capacity utilization and price realizations. H1FY24 revenue was INR 346.69 Cr, a 9.59% increase over the same period in the previous year.

Geographic Revenue Split

Exports contributed 70% of total sales in FY22, down from 82% in FY21, as the company shifted focus toward the domestic market. The company serves major global regions including the United States, Europe, China, Korea, and India.

Profitability Margins

Net Profit Margin tripled from 1.00% in FY24 to 3.00% in FY25. Operating Profit Margin (PBILDT) improved from 10.22% in FY24 to 11.60% in FY25. Return on Net Worth increased from 2.00% to 5.00% over the same period, reflecting improved operational efficiency and price resets with customers.

EBITDA Margin

PBILDT margin stood at 11.60% in FY25, up from 10.22% in FY24. In 9MFY25, the margin further improved to 11.89% due to stable commodity prices and better capacity utilization. Historically, margins were higher at ~15% in FY21 but were impacted by pandemic-related disruptions and a shift in product mix.

Capital Expenditure

Planned growth and maintenance capital expenditure for FY25 is INR 47 Cr, of which INR 34 Cr was already incurred by September 30, 2024. This investment is focused on expanding manufacturing capabilities for automotive and non-automotive motor segments.

Credit Rating & Borrowing

CARE Ratings reaffirmed 'CARE A+; Stable' for long-term bank facilities and 'CARE A1+' for short-term facilities in March 2025. Long-term bank facilities were reduced to INR 22.55 Cr from INR 29.67 Cr. Interest coverage ratio improved significantly from 2.09 in FY24 to 3.21 in FY25.

⚙️ Operational Drivers

Raw Materials

Raw materials include components for permanent magnet DC motors and BLDC motors. Sourcing is heavily reliant on commodities like steel and copper, with a significant portion of raw materials for the non-automotive segment being imported.

Import Sources

A significant part of raw materials, particularly for the non-automotive Brushless DC (BLDC) motor segment, is imported from China. Disruptions in China during 9MFY23 led to supply chain constraints that temporarily reduced PBILDT margins to 8.85%.

Capacity Expansion

Current capacity is not explicitly stated in units, but the company is investing INR 47 Cr in FY25 to expand and maintain facilities in Chennai, Tamil Nadu, to support the target of scaling operations beyond INR 1,000 Cr.

Raw Material Costs

Raw material costs are managed through a commodity pass-through mechanism with customers, which helps protect margins against price fluctuations. However, disruptions in China and geopolitical conditions have historically caused volatility in procurement costs.

Manufacturing Efficiency

Capacity utilization improved in FY24 and 9MFY25, contributing to the recovery of PBILDT margins to 11.89%. Vertically integrated operations in Chennai allow for better control over the production of critical automotive applications.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

The company aims to reach a scale of INR 1,000 Cr by diversifying its product profile into non-automotive applications like BLDC motors for fans, expanding its customer base, and increasing its presence in the domestic Indian market while maintaining its 70% export share.

Products & Services

Permanent magnet DC motors, Brushless DC (BLDC) motors, actuator motors for Electronic Throttle Control (ETC), seat applications, and motor accessories for passenger cars and consumer appliances.

Brand Portfolio

Igarashi

New Products/Services

Brushless DC (BLDC) motors for consumer applications like fans were launched in FY20 to de-risk the business from 100% automotive dependency and are expected to contribute significantly to future growth.

Market Expansion

Targeting diversification of products, customers, and geographies in the medium term to reduce segment concentration risk and improve the overall financial risk profile.

Market Share & Ranking

Strong market position in the global automotive motors industry, particularly in the actuator motor segment for Electronic Throttle Control (ETC) applications.

Strategic Alliances

The company operates as a joint venture with the Igarashi Group of Japan. Major shareholders include Agile Electric Sub-Assembly Private Limited (AESPL), Igarashi Electric Works H.K. Ltd, and Igarashi Electric Works Limited (Japan), who together hold 75% of the stake.

🌍 External Factors

Industry Trends

The industry is shifting toward BLDC technology and increased electronic content in vehicles. IMIL is positioning itself by expanding its BLDC motor portfolio for both automotive and consumer fan segments.

Competitive Landscape

Operates in the global automotive DC motor market, competing as a full-service supplier with cost-effective manufacturing operations based in India.

Competitive Moat

Moat is built on a 30-year track record, vertical integration, and the critical nature of its products (ETC motors), which have high switching costs for OEMs due to safety and validation requirements.

Macro Economic Sensitivity

Highly sensitive to global automotive industry cycles and geopolitical stability, particularly in China, which affects both the supply chain and the demand for passenger car components.

Consumer Behavior

Increasing demand for energy-efficient consumer appliances is driving the shift toward BLDC motors in the fan industry, a segment IMIL is actively targeting.

Geopolitical Risks

Geopolitical market conditions post-pandemic and disruptions in China have historically impacted capacity utilization and supply chain reliability, leading to margin compression.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to automotive safety standards and environmental regulations. The company maintains a strong internal control system to ensure compliance with documented policies and procedures.

Environmental Compliance

The company has established a Risk Management & ESG Committee to manage environmental compliance and workplace safety in a rapidly evolving regulatory environment.

⚠️ Risk Analysis

Key Uncertainties

Commodity price movements and product liability are identified as key risks that could impact financial resilience and the 11.60% operating margin.

Geographic Concentration Risk

70% of revenue is derived from exports, making the company highly dependent on international trade policies and global automotive demand.

Third Party Dependencies

High dependency on the Igarashi Group for technology and a few large global clients for the majority of revenue.

Technology Obsolescence Risk

The transition from traditional brushed DC motors to BLDC technology represents a risk, which the company is mitigating through its own BLDC product development.