PRECAM - Precision Camshf

📊 NSE: PRECAM 🏢 Auto Ancillaries 📅 Last Updated: 12/14/2025 11:13

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue declined 15.55% YoY to INR 894.93 Cr in FY25 from INR 1,059.76 Cr in FY24. In Q2 FY26, standalone revenue was INR 149.48 Cr, MEMCO contributed INR 14.37 Cr, MFT contributed INR 28.32 Cr (pre-insolvency), and EMOSS contributed INR 22.13 Cr.

Geographic Revenue Split

The company derives a significant portion of its revenues from international markets, ranging between 52% and 60% of total turnover, exposing it to global demand cycles and currency volatility.

Profitability Margins

Consolidated PAT margin improved to 6.21% in FY25 from 3.89% in FY24, primarily due to a one-time compensation of INR 38.92 Cr from customers; excluding this, the PAT margin was 2.20%. Q2 FY26 consolidated PAT margin stood at 6.33%.

EBITDA Margin

Consolidated EBITDA margin was 10.7% in Q2 FY26. On an annual basis, the PBILDT margin moderated to 10.12% in FY25 from 10.43% in FY24 due to lower export sales and sub-optimal capacity utilization.

Capital Expenditure

The company has planned a fresh investment of INR 100 Cr specifically for new programs with Maruti Suzuki and Mahindra & Mahindra, with SOP expected in calendar year 2026.

Credit Rating & Borrowing

CARE Ratings monitors the company with a focus on debt protection metrics; interest coverage ratio (ICR) was 13.76x in FY24. Total debt to gross cash accruals (TD/GCA) stood at 0.91x in FY24.

⚙️ Operational Drivers

Raw Materials

Input materials for camshaft manufacturing (castings and machined components) where price fluctuations are managed through pass-through mechanisms.

Import Sources

Not specifically disclosed in available documents, though the company operates manufacturing units in India and had subsidiaries in Germany (MFT) and Netherlands (EMOSS).

Capacity Expansion

Current volume split is 70% Camshaft Castings and 30% Machined Camshafts. Expansion is focused on new OEM programs for Maruti and Mahindra starting in 2026.

Raw Material Costs

Raw material price volatility is mitigated by a price pass-through mechanism with a lag of 3 to 6 months depending on the customer contract.

Manufacturing Efficiency

Efficiency was impacted in FY25 by sub-optimal utilization of capacities and lower fixed-cost absorption due to declining export sales.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Growth is targeted through new 5-6 year contracts with Maruti Suzuki and Mahindra & Mahindra starting in CY26, and the development of electric heavy commercial vehicles (HCV) with first deliveries expected in FY26.

Products & Services

Cast Camshafts, Machined Camshafts, and Electric Vehicle conversion kits/electric HCVs.

Brand Portfolio

Precision Camshafts (PCL), MEMCO, EMOSS.

New Products/Services

Electric Heavy Commercial Vehicles (HCV) development is ongoing; the company has slowed its Tata Ace conversion business due to regulatory changes.

Market Expansion

Focusing on the Indian domestic market through new OEM programs while stabilizing the Netherlands-based EMOSS subsidiary.

Strategic Alliances

Partnerships with major OEMs like Maruti Suzuki and Mahindra & Mahindra for long-term engine-life contracts (5-6 years).

🌍 External Factors

Industry Trends

The industry is shifting toward EVs; while PCL is diversifying into e-mobility, the majority of its revenue still comes from ICE parts, creating a transition risk.

Competitive Landscape

Competes in the global auto-component space, specifically in the camshaft segment for passenger vehicles.

Competitive Moat

Moat is based on its established market position in camshaft manufacturing and long-standing relationships with global OEMs, though this is challenged by the EV transition.

Macro Economic Sensitivity

Highly sensitive to the global automotive cycle and the pace of EV adoption which threatens traditional ICE component demand.

Consumer Behavior

Shift toward electric mobility is reducing long-term demand for traditional engine components like camshafts.

Geopolitical Risks

Exposure to European markets through subsidiaries and export sales makes the company vulnerable to regional economic slowdowns and regulatory shifts in the EU.

⚖️ Regulatory & Governance

Industry Regulations

Subject to changing automotive emission norms and EV subsidies. The Tata Ace conversion business was specifically slowed due to changes in Indian regulations.

Environmental Compliance

The company is replacing fossil fuels with renewable solar energy and installed a solar plant in FY24.

Taxation Policy Impact

Total tax expense for FY25 was INR 2,915.72 Lakhs (Standalone) and INR 2,902.85 Lakhs (Consolidated).

Legal Contingencies

The Ministry of Corporate Affairs (MoCA) has initiated an investigation under Section 210 of the Companies Act, 2013. The company is currently collating documents; no adverse orders have been passed yet.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the outcome of the MoCA Section 210 investigation and the successful ramp-up of the e-mobility business to offset ICE declines.