💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 5.97% to INR 552.06 Cr in FY25 from INR 520.94 Cr in FY24. However, H1 FY26 revenue declined 5.2% YoY to INR 253.6 Cr due to subdued offtake from automotive OEMs. The standalone revenue for FY25 was INR 537.64 Cr, showing the core business remains the primary driver.

Geographic Revenue Split

Not disclosed in available documents, though the company operates primarily in India with a focus on scaling exports to diversify its revenue base.

Profitability Margins

Operating margins recovered to 10.4% in FY25 from 7.6% in FY24. Standalone PAT for FY25 was INR 14.09 Cr compared to a loss of INR 4.67 Cr in FY24. The recovery is driven by better price pass-through to customers and improved standalone performance.

EBITDA Margin

Consolidated EBITDA for H1 FY26 was INR 22 Cr, a 21.9% YoY decline from H1 FY25. This drop was caused by lower asset utilization (65% in parts business) leading to under-absorption of fixed costs.

Capital Expenditure

The company is undertaking initiatives in EV batteries and aftermarket products. While specific total capex is not totaled, credit ratings warn that debt-funded capex leading to gearing above 1.0x would trigger a downgrade.

Credit Rating & Borrowing

CRISIL maintains a 'Stable' outlook as of mid-2025. Interest coverage ratio moderated to 2.8-2.9x in FY24 from 3.7x in FY23. Bank limit utilization averaged 62.4% for the 12 months ended June 2025.

⚙️ Operational Drivers

Raw Materials

Polyvinyl Chloride (PVC) and Thermo Plastic Olefins (TPO) are the primary raw materials, which are highly sensitive to global crude oil prices and forex fluctuations.

Import Sources

A significant portion of raw materials is imported, exposing the company to international price volatility and currency risks.

Capacity Expansion

Current capacity utilization for the parts business is 65% and 85% for the tool business. The lithium-ion battery pack facility is severely underutilized at only 5% capacity as of H1 FY26.

Raw Material Costs

Raw material price increases previously compressed margins from 15-20% historically to 7.6% in FY24. The company is targeting a material yield efficiency of 88-90% to mitigate these costs.

Manufacturing Efficiency

The company delivered over 120 moulds worth INR 25 Cr with 80% capacity utilization in the tooling division. Manpower productivity is a key focus for margin expansion.

📈 Strategic Growth

Expected Growth Rate

5-7%

Growth Strategy

Growth will be driven by a healthy order book of INR 3,439 Cr providing multi-year visibility. The strategy involves scaling the EV battery business (PPAP Technology Ltd), expanding into industrial products, and increasing aftermarket sales. Management targets FY26 revenue of INR 600–660 Cr.

Products & Services

Auto sealing systems, interior and exterior injection moulded products, lithium-ion battery packs for electric vehicles, and high-precision plastic injection toolings.

Brand Portfolio

PPAP, Avinya Batteries (acquired subsidiary).

New Products/Services

Lithium-ion batteries for EVs and industrial products. The company is also expanding its 'aftermarket' segment to diversify away from direct OEM sales.

Market Expansion

Focusing on the EV segment through PPAP Technology Limited and expanding the customer base to include white goods and appliance sectors.

Market Share & Ranking

PPAP is one of the largest players in the PVC/TPO-based profiles segment for the Indian automotive industry.

Strategic Alliances

PPAP Tokai India Rubber Pvt. Ltd. (Joint Venture) and subsidiaries like PPAP Technology Limited and ELPIS Automotives Private Limited.

🌍 External Factors

Industry Trends

The industry is shifting toward Electric Vehicles (EVs). PPAP is positioning itself by manufacturing lithium-ion battery packs, although this segment currently faces low demand and high losses.

Competitive Landscape

Competes with other auto-component manufacturers, but maintains a leadership position in specialized sealing systems.

Competitive Moat

Moat is built on long-standing relationships with marquee OEMs and leadership in the niche PVC/TPO profile segment. Sustainability depends on successfully diversifying into EV components.

Macro Economic Sensitivity

Highly sensitive to the Indian automotive industry's growth. A 5.2% revenue decline in H1 FY26 was directly attributed to a 'muted backdrop' in the auto sector.

Consumer Behavior

Shift toward EVs is the primary consumer trend affecting long-term demand for traditional engine-related components vs. new battery-related products.

Geopolitical Risks

Geopolitical developments affecting crude oil prices directly impact the cost of PVC and TPO resins.

⚖️ Regulatory & Governance

Industry Regulations

Operations must comply with automotive safety and manufacturing standards. The company maintains internal financial controls as per Section 143(3)(i) of the Companies Act, 2013.

Taxation Policy Impact

The effective tax rate is approximately 25%, with FY25 standalone tax at INR 4.68 Cr on PBT of INR 18.78 Cr.

Legal Contingencies

Management performs annual impairment testing on investments in subsidiaries. No specific high-value pending court cases were detailed in the provided reports.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the turnaround of the EV battery subsidiary, which is currently operating at only 5% capacity and dragging down group profitability.

Geographic Concentration Risk

Manufacturing facilities are concentrated in India (Noida, New Delhi), making it dependent on the domestic auto hub's performance.

Third Party Dependencies

High dependency on a few large OEMs for the majority of revenue (70%+).

Technology Obsolescence Risk

Risk of traditional plastic components being replaced or redesigned in newer EV models, necessitating the current pivot to battery technology.

Credit & Counterparty Risk

Trade receivables stood at INR 72.40 Cr as of September 2025. Provision for bad and doubtful debts was INR 14.04 lakhs for H1 FY26, suggesting generally stable receivable quality.