💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for FY25 was INR 308.24 Cr, a 2.73% decrease from INR 316.87 Cr in FY24. However, the non-casting segment grew 18.18% to INR 260 Cr (from INR 220 Cr), and the Proprietary business grew by over 20% YoY. This reflects a strategic shift away from the lower-margin Casting segment to higher-margin proprietary products.

Geographic Revenue Split

Not disclosed in available documents, though the company operates strategically located plants in Aligarh (Uttar Pradesh) and Pantnagar (Uttarakhand) to serve domestic OEMs.

Profitability Margins

PAT Margin for FY25 stood at 2.61%, a decrease of 118 bps from 3.79% in FY24. The decline was driven by the strategic transition toward the proprietary segment and a planned reduction in the casting business, alongside higher depreciation of INR 13.05 Cr compared to INR 10.70 Cr in the previous year.

EBITDA Margin

EBITDA Margin for FY25 was 10.72%, a slight decrease of 16 bps from 10.88% in FY24. EBITDA in absolute terms was INR 33.05 Cr, down 4.17% YoY from INR 34.49 Cr.

Capital Expenditure

The company acquired 4,335 sq. mtr. of land in Pantnagar, Uttarakhand, in June 2024 to support long-term capacity creation. Additionally, INR 78.92 Cr from a preferential issue has been allocated for strategic acquisitions to drive future growth.

Credit Rating & Borrowing

CRISIL reaffirmed its 'CRISIL BBB-/Stable' rating on long-term bank facilities. Borrowing costs are managed through a mix of loans and internal accruals, with interest coverage expected to improve to 7-7.5 times in fiscal 2026 from 3.1 times in fiscal 2025 due to debt reduction.

⚙️ Operational Drivers

Raw Materials

Total Raw Materials consumed in FY25 amounted to INR 200.91 Cr, representing 65.18% of total revenue. Specific material names like steel or aluminum are not explicitly listed but are standard for automotive component manufacturing.

Key Suppliers

Not disclosed in available documents; however, the company maintains healthy relationships with principal suppliers to support its long-standing OEM partnerships.

Capacity Expansion

Current capacity is being expanded through the acquisition of 4,335 sq. mtr. of land in Pantnagar. The company is building a future-ready manufacturing ecosystem to support scalable infrastructure and technology integration.

Raw Material Costs

Raw material costs were INR 200.91 Cr in FY25, down 0.77% from INR 202.47 Cr in FY24. The company utilizes a pass-through mechanism to transfer input price increases to customers, maintaining operational efficiency.

Manufacturing Efficiency

Fund-based bank limit utilization averaged 68% for the 12 months through June 2025, a significant improvement from previous levels exceeding 90%, indicating better working capital management and liquidity.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth will be achieved through a strategic pivot to the high-margin Proprietary segment (which grew >20% in FY25), capacity expansion in Pantnagar, and the utilization of INR 78.92 Cr for strategic acquisitions. The company is also adding new customers to its portfolio to drive volumetric growth in non-casting revenues.

Products & Services

Manufacturing of automotive parts including locks, switches, casting components, and proprietary automotive solutions for 2W, 3W, PV, CV, and off-road vehicles.

Brand Portfolio

Pavna

New Products/Services

The Proprietary business segment is the primary driver of new growth, contributing to a robust 20% growth rate within that vertical in FY25.

Market Expansion

Expansion is focused on contiguous growth in Pantnagar, Uttarakhand, to strengthen the manufacturing platform for long-term capacity creation.

Strategic Alliances

Maintains long-standing relationships with major OEMs, most notably Bajaj Auto Ltd (since 1971) and Honda Motorcycles and Scooters India.

🌍 External Factors

Industry Trends

The Indian auto-component industry is set to cross USD 80 billion in revenue in FY2025. Pavna is positioning itself for this growth by shifting from low-margin casting to high-tech proprietary parts.

Competitive Landscape

Faces competition from both domestic and multinational companies in all operating categories, countered by differentiators in project execution and technology investment.

Competitive Moat

The moat is built on 50+ years of experience and deeply entrenched relationships with major OEMs like Bajaj (54-year relationship). These long-term ties create high switching costs for OEMs and provide a stable revenue base.

Macro Economic Sensitivity

Highly sensitive to the Indian automobile industry cycles; a decline in consumer demand for vehicles directly impacts OEM orders.

Consumer Behavior

Increasing demand for high-quality, reliable automotive parts in the South Asian market supports Pavna's shift toward proprietary, high-margin products.

Geopolitical Risks

Global economic developments and changes in international trade laws are cited as factors that could influence operations.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to changes in government regulations, pollution norms, and tax laws within India.

Taxation Policy Impact

The effective tax rate for FY25 was approximately 27.8%, with a tax expense of INR 3.11 Cr on a Profit Before Tax of INR 11.16 Cr.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the high customer concentration risk (>50% from top 3). A secondary risk is the near-term margin pressure during the transition from casting to proprietary segments.

Geographic Concentration Risk

Manufacturing is concentrated in Aligarh and Pantnagar, making the company sensitive to regional economic and regulatory changes in Uttar Pradesh and Uttarakhand.

Third Party Dependencies

High dependency on the production schedules and market success of Bajaj Auto and Honda Motorcycles.

Technology Obsolescence Risk

The company mitigates technology risk by continuously investing in R&D and people to stay ahead of industry shifts toward more advanced automotive components.

Credit & Counterparty Risk

Credit risk is managed through a rigorous credit policy and an aggressive receivables management system to ensure timely collections from mid-sized and large corporations.