PRECISION - Precision Metal.

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

💰 Financial Performance

Revenue Growth by Segment

The Company operates in a single segment: Manufacturing of Alloy Wheels. While specific revenue figures were not disclosed, the Average Net Profit for the preceding three years was reported at INR 6.297 Cr. The significant drop in Net Profit Margin from 3.45% in FY24 to 0.60% in FY25 (an 82.6% decline) suggests a substantial contraction in bottom-line performance despite the single-segment focus.

Geographic Revenue Split

Not disclosed in available documents, though the company identifies 'export opportunity' as a key growth driver and notes that global economic activity impacts its key markets.

Profitability Margins

Operating Profit Margin declined from 4.27% in FY24 to 3.08% in FY25, a reduction of 119 basis points. Net Profit Margin saw a sharper decline from 3.45% to 0.60% (down 285 basis points). These declines are attributed to rising input costs, specifically aluminum, and global economic headwinds.

EBITDA Margin

Operating Profit Margin stood at 3.08% for FY25, down from 4.27% in FY24. This 27.8% relative decrease in operating efficiency reflects the pressure from volatile raw material prices and increased operating costs in the auto-component sector.

Capital Expenditure

The company reported Nil (INR 0) for the creation or acquisition of capital assets during the reporting period, indicating a pause in physical infrastructure expansion for FY25.

Credit Rating & Borrowing

The company reported no defaults on repayments of loans or borrowings to banks. While specific interest rates were not disclosed, the management highlighted that rising global interest rates pose a significant risk to consumption growth and operating costs.

⚙️ Operational Drivers

Raw Materials

Aluminum is the primary raw material, representing a 'very significant' but unspecified percentage of the final product cost for Alloy Wheels.

Capacity Expansion

Current and planned capacity figures were not disclosed; however, the company reported zero capital asset acquisition for the current year.

Raw Material Costs

Aluminum prices are described as a 'reality of rising prices' that poses a challenge to financial management. The impact is direct as aluminum is the core component of the final product, meaning any price spike immediately compresses the 3.08% operating margin.

Manufacturing Efficiency

Capacity utilization metrics were not provided, but the company noted that an economic downturn could lead to a decrease in volumes and utilization levels.

📈 Strategic Growth

Growth Strategy

The strategy focuses on the development of technologically superior auto-components and tapping into export opportunities. The company intends to remain agile to evolve dynamically with market demand while focusing on receivables and working capital management to maintain liquidity.

Products & Services

Manufacturing and sale of Alloy Wheels and Aluminum Wheels for the auto-component sector.

Brand Portfolio

Precision Metaliks.

New Products/Services

The company is striving to develop new components that are technologically superior to competitors, though specific revenue contribution percentages for these new products were not disclosed.

Market Expansion

The company is targeting export markets to drive growth, leveraging the inherent demand in the global auto-component sector.

🌍 External Factors

Industry Trends

The auto-component industry is facing a trend of rising raw material costs (Aluminum) and increased competition. The industry is evolving toward technologically superior components, and Precision is positioning itself to follow this shift.

Competitive Landscape

The sector is characterized by intense price competition and volatility in raw material pricing, requiring high operational agility.

Competitive Moat

The company's intended moat is based on 'technologically superior' product development. However, the sustainability is challenged by high price competition and low current margins (0.60% Net Profit).

Macro Economic Sensitivity

Highly sensitive to global interest rates and inflation, which impact consumption growth and the cost of key inputs.

Consumer Behavior

A shift toward lower consumption due to higher interest rates is identified as a primary risk to demand.

Geopolitical Risks

Global macro-issues are cited as causes for extreme currency volatility and supply chain disruptions, acting as a headwind for performance.

⚖️ Regulatory & Governance

Industry Regulations

The company complies with Accounting Standards under Section 133 of the Companies Act, 2013, and SEBI (LODR) Regulations. It also follows AS-17 for segment reporting.

Legal Contingencies

The company reported Nil (INR 0) pending litigations that would impact its financial position as of March 31, 2025.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainties include the volatility of aluminum prices and the impact of global interest rates on consumption, which could significantly impact the 3.08% operating margin.