RICOAUTO - Rico Auto Inds

📊 NSE: RICOAUTO 🏢 Auto Ancillaries 📅 Last Updated: 12/14/2025 11:53

💰 Financial Performance

Revenue Growth by Segment

The company operates 100% in the automotive components segment. Consolidated revenue grew by 5% in H1 FY26, with a full-year execution target of INR 2,600 Cr.

Geographic Revenue Split

Domestic sales account for 84.41% of turnover. Exports contribute 15.59%, with 50% of exports (7.8% of total) going to the US and 25% (3.9% of total) to Europe. US exports grew 22% YoY in Q2 FY26.

Profitability Margins

EBITDA margins were 10.1% in Q1 FY26 and 9.9% in Q2 FY26. Management targets 12-13% EBITDA margins by Q4 FY26, driven by new high-margin product introductions.

EBITDA Margin

Consolidated EBITDA margin improved to 9.9% in Q2 FY26 from 9.3% in Q2 FY25, representing a 60 bps YoY increase.

Capital Expenditure

The company is undertaking sizeable debt-funded capex, including a greenfield project in Hosur. Annual cash accruals of INR 150-200 Cr are expected to support these investments.

Credit Rating & Borrowing

CRISIL Ratings assigned a 'Stable' outlook. Bank limit utilization averaged 61.3% for the 12 months ended July 2025. Term debt obligations are estimated at INR 110-130 Cr over the medium term.

⚙️ Operational Drivers

Raw Materials

Aluminum and Ferrous (iron/steel) are the primary raw materials used for high-precision components.

Capacity Expansion

Current capacity utilization is improving; a new greenfield project in Hosur is being developed to expand production for domestic and export markets.

Raw Material Costs

Margins are susceptible to fluctuations in raw material prices (Aluminum and Ferrous), which are monitorable risks for operating efficiency.

Manufacturing Efficiency

Management expects better equipment utilization in Q3 and Q4 FY26 as new product lines ramp up.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth will be achieved through the introduction of new high-margin products in Q3/Q4 FY26, the operationalization of the Hosur greenfield plant, and expansion into the Railway sector where margins have improved from 5% to 18-20%.

Products & Services

High-precision fully machined aluminium and ferrous components and assemblies, including engine parts, transmission parts, and braking systems.

Brand Portfolio

RICO

New Products/Services

New automotive components for global OEMs and high-margin components for the Railway sector (RDSO approval in process).

Market Expansion

Expansion into the US and European markets for exports and the Hosur region for domestic OEM support.

🌍 External Factors

Industry Trends

The industry is shifting toward high-precision engineering grade components. Rico is positioning itself by diversifying into non-automotive segments like Railways to capture higher margins.

Competitive Landscape

Competes with other global and domestic auto-component manufacturers in the aluminium and ferrous casting segments.

Competitive Moat

Moat is built on established long-term relationships with global OEMs and integrated capabilities from design to assembly, which are sustainable due to high switching costs for critical engine parts.