Rico Auto Industries Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Rico Auto Industries Ltd filed with BSE on 04 Jun 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Rico Auto Industries reported its highest ever annual revenue for FY26 at INR2,477 crores, up 12% year-on-year, with consolidated EBITDA margins of 9% impacted by non-recurring Labour Code and raw material lag settlement costs. Management said adjusted EBITDA margin, excluding these one-time impacts, was 10.25% for the year, and guided to revenue crossing INR3,000 crores in FY27. The company also discussed progress in railway and defense businesses, capacity utilization, the Hosur facility, and ongoing negotiations with customers on raw material settlement cycles.
Numbers mentioned
Revenue: INR677 crores (Q4 FY26)
p. 4
“Our revenue stood at INR677 crores in Q4 FY '25 including an export of INR102 crores.”
Naveen Sorot, page 4 of the filed PDF · View the filing
EBITDA margin: 7.1% (Q4 FY26)
p. 4
“EBITDA stood at INR47.8 crores with EBITDA margins of 7.1%.”
Naveen Sorot, page 4 of the filed PDF · View the filing
PAT: INR6.9 crores (Q4 FY26)
p. 4
“PAT stood at INR6.9 crores.”
Naveen Sorot, page 4 of the filed PDF · View the filing
Revenue: INR2,477 crores (FY26)
p. 4
“On a consolidated FY '26 highlight, revenue stood at INR2,477 crores, up 12% year-on-year and the highest ever annual revenue for the company, which includes an export of INR395 crores.”
Naveen Sorot, page 4 of the filed PDF · View the filing
EBITDA margin: 9% (FY26)
p. 4
“EBITDA stood at INR223 crores with EBITDA margins of 9%.”
Naveen Sorot, page 4 of the filed PDF · View the filing
PAT: INR52.4 crores (FY26)
p. 4
“PAT stood at INR52.4 crores as compared to INR19.2 crores last year.”
Naveen Sorot, page 4 of the filed PDF · View the filing
Labour Code impact: INR11 crores (FY26)
p. 4
“One, the Labour Code impact, which is almost INR3.6 crores in Q4 and INR11 crores for the entire year.”
Naveen Sorot, page 4 of the filed PDF · View the filing
Lag settlement impact: INR19 crores (FY26)
p. 4
“Further, there was a lag settlement impact, which was INR11 crores for Q4 and INR19 crores for the entire financial year.”
Naveen Sorot, page 4 of the filed PDF · View the filing
Aluminum business revenue: INR2,155 crores (FY26)
p. 5
“On the segment-wise performance, aluminum business revenue stood at INR2,155 crores during FY '26, contributing around 88% to total revenue.”
Naveen Sorot, page 5 of the filed PDF · View the filing
Ferrous business revenue: INR322 crores (FY26)
p. 5
“Ferrous business revenue stood at INR322 crores during FY '26, contributing around 12% to total revenue.”
Naveen Sorot, page 5 of the filed PDF · View the filing
Exports as % of revenue: 16% (FY26)
p. 5
“Exports for FY '26 stood at 16% as compared to 15% last year.”
Naveen Sorot, page 5 of the filed PDF · View the filing
Working capital days: 7 days (FY26)
p. 5
“Working capital days improved to 7 days from 33 days last year, while the cash flow from operations stood at INR331 crores during FY '26.”
Naveen Sorot, page 5 of the filed PDF · View the filing
Net debt: INR686 crores (As of March 2026)
p. 5
“Net debt as on March '26 stood at INR686 crores as compared to INR653.1 crores last year.”
Naveen Sorot, page 5 of the filed PDF · View the filing
New orders secured: INR2,500 crores (Over 5-year program life)
p. 5
“The company has also secured new orders worth approximately INR2,500 crores over a program life of 5 years, providing strong visibility for future growth.”
Naveen Sorot, page 5 of the filed PDF · View the filing
Tamil Nadu subsidy: INR39 crores (Next 10 years)
p. 5
“Along with that, the company has also received an approval from Tamil Nadu government for a subsidy of around INR39 crores, which will start accruing from current financial year and will be available for the next 10 years.”
Naveen Sorot, page 5 of the filed PDF · View the filing
Adjusted EBITDA margin: 10.25% (FY26)
p. 6
“So if you exclude this onetime impact, the margin increases from 9-odd percent to 10.25%.”
Naveen Sorot, page 6 of the filed PDF · View the filing
Adjusted Q4 EBITDA margin: 9.8% (Q4 FY26)
p. 6
“So if you include these nonrecurring impact, which is there in Q4, I guess the EBITDA, which is currently appearing at 7.6%, will rise to 9.8%.”
Naveen Sorot, page 6 of the filed PDF · View the filing
Net debt leverage: 3.75x (Current)
p. 9
“So if you look at overall, I guess, we are hovering at around 3.75x the leverage.”
Naveen Sorot, page 9 of the filed PDF · View the filing
Railway revenue last year: INR3 crores to INR4 crores (FY26)
p. 10
“See, railways, we had just started and the revenue was just about INR3 crores to INR4 crores last year, but all the approvals have come.”
Arvind Kapur, page 10 of the filed PDF · View the filing
Defense revenue: INR20 crores to INR30 crores (FY26)
p. 10
“And in the defense, we are still struggling around INR20 crores to INR30 crores, and we want to cross INR50 crores this year.”
Arvind Kapur, page 10 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Export growth (U.S. and Germany) — 2x · Next 2 years
stated firmly by Kaushalendra Verma
p. 3
“Our export to the U.S. and Germany will grow to 2x in the next 2 years.”
Kaushalendra Verma, page 3 of the filed PDF · View the filing
Export growth — 32% · This year
stated firmly by Arvind Kapur
p. 5
“Sorry, the exports will grow by 32% this year, and primarily to Germany and to U.S.A.”
Arvind Kapur, page 5 of the filed PDF · View the filing
Domestic market growth — This year
stated conditionally by Arvind Kapur
p. 5
“Unless, of course, the global -- the geopolitics which is happening and that brings about some disaster, I think we are ready to reach the levels that we are talking of now.”
Arvind Kapur, page 5 of the filed PDF · View the filing
Hosur facility operational date — September 2026
stated firmly by Naveen Sorot
p. 5
“The facility is expected to become operational from September 2026 onwards and will primarily cater to hybrid and EV-related programs for key OEM customers.”
Naveen Sorot, page 5 of the filed PDF · View the filing
EBITDA margin — beyond 10.25% · FY27
stated conditionally by Naveen Sorot
p. 6
“So we expect that we should see an improvement in the overall margin levels as well going beyond 10.25% that we have achieved last year, if we exclude the onetime impact.”
Naveen Sorot, page 6 of the filed PDF · View the filing
Revenue — cross INR3,000 crores · FY27
stated conditionally by Naveen Sorot
p. 7
“So revenue, I guess, we're just concluding our budget. But if you look at, I guess, on an overall basis, we are expecting to cross INR3,000 crores.”
Naveen Sorot, page 7 of the filed PDF · View the filing
Railway revenue — cross INR100 crores · This year
stated conditionally by Arvind Kapur
p. 8
“And we are hoping that this year, in the railways, we should be crossing INR100 crores as far as the railways are concerned.”
Arvind Kapur, page 8 of the filed PDF · View the filing
Defense revenue — cross INR50 crores · This year
stated as an aspiration by Arvind Kapur
p. 8
“Defense is a little slow, and we are targeting -- we are trying to see how do we cross INR50 crores this year.”
Arvind Kapur, page 8 of the filed PDF · View the filing
Defense revenue — double · Next 2 years
stated as an aspiration by Arvind Kapur
p. 8
“And in the next 2 years, how do we double it further.”
Arvind Kapur, page 8 of the filed PDF · View the filing
Net debt repayment — INR120 crores annually · Next 3 years
stated firmly by Naveen Sorot
p. 9
“So INR120 crores in any case will get knocked off every year over the next 3 years.”
Naveen Sorot, page 9 of the filed PDF · View the filing
EBITDA margin — 10% plus · Starting Q1 FY27
stated conditionally by Naveen Sorot
p. 11
“So we should see the kind of margin going forward starting from Q1 itself.”
Naveen Sorot, page 11 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management attributed the decline to two non-recurring impacts—Labour Code and raw material lag settlement—and said adjusted margins were meaningfully higher; they expect further improvement in FY27.
Answered by Naveen Sorot
Asked by Deepak Poddar: What caused the sharp decline in EBITDA and gross margin in Q4, and how should margins and growth look for FY27?
p. 6
“So if you include these nonrecurring impact, which is there in Q4, I guess the EBITDA, which is currently appearing at 7.6%, will rise to 9.8%.”
Naveen Sorot, page 6 of the filed PDF · View the filing
Management said yes, if conditions remain as expected.
Answered by Naveen Sorot
Asked by Deepak Poddar: Would FY27 margins be higher than the 10.25% adjusted FY26 figure?
p. 7
“Yes. If everything else remains as it is.”
Naveen Sorot, page 7 of the filed PDF · View the filing
Management said they expect revenue to cross INR3,000 crores.
Answered by Naveen Sorot
Asked by Deepak Poddar: What is the revenue growth guidance for FY27?
p. 7
“So revenue, I guess, we're just concluding our budget. But if you look at, I guess, on an overall basis, we are expecting to cross INR3,000 crores.”
Naveen Sorot, page 7 of the filed PDF · View the filing
Management explained monthly settlements are agreed going forward, while recovery of past losses is a separate ongoing negotiation.
Answered by Naveen Sorot
Asked by Parag Thakkar: Will the INR11 crores/INR19 crores lag impact automatically be recovered in FY27?
p. 8
“So the monthly settlement is already agreed, whereas the recovery of the loss which was incurred last year is parallelly going on.”
Naveen Sorot, page 8 of the filed PDF · View the filing
Management said railway is moving faster than defense due to easier clearances, targeting INR100 crores in railways this year.
Answered by Arvind Kapur
Asked by Parag Thakkar: What is the revenue opportunity for railway and defense over the next 2-3 years?
p. 8
“Railways, I think, is moving much faster than the defense because the clearances come much easier and faster than the defense.”
Arvind Kapur, page 8 of the filed PDF · View the filing
Management attributed this to new programs from investments made in prior years fructifying now, plus gaining greater market share and new component categories.
Answered by Arvind Kapur
Asked by Parag Thakkar: How is the company achieving above 20% revenue growth when OEM sales are growing below 10%?
p. 9
“What we are saying is we are getting the largest share of the market and also we are picking up newer components like for hybrids and electric vehicles, etcetera.”
Arvind Kapur, page 9 of the filed PDF · View the filing
Management said discussions are ongoing and they previously rejected an offer of INR700 crores, seeking a better price.
Answered by Arvind Kapur
Asked by Parag Thakkar: What is the status of the land/property sale discussions?
p. 9
“Well, discussions are carrying on. And like I mentioned last time that we were offered INR700 crores, and we had said no to that, because we were looking for a much better value, so that we could actually reward our shareholders.”
Arvind Kapur, page 9 of the filed PDF · View the filing
Management said railway revenue was only INR3-4 crores last year due to delayed approvals, and detailed the components supplied.
Answered by Kaushalendra Verma
Asked by Hiten Boricha: What was the actual railway and defense revenue in FY26, and what components are being supplied to railways?
p. 10
“Basically, these are bearing adapters, LC cast iron inserts, which goes into the track.”
Kaushalendra Verma, page 10 of the filed PDF · View the filing
Management said iron utilization is around 65-75% and aluminum is in a similar range, with variation by machine size.
Answered by Arvind Kapur
Asked by Hiten Boricha: What is the current capacity utilization for aluminum die casting and ferrous casting?
p. 10
“In the iron side, our capacity utilization is in the region of about, I think, 65%, 70%.”
Arvind Kapur, page 10 of the filed PDF · View the filing
Risks flagged
Volatility in aluminum and other raw material prices due to global commodity market fluctuations
p. 4
“During the year, aluminum and other raw material prices remained volatile due to fluctuation in the global commodity market.”
Kaushalendra Verma, page 4 of the filed PDF · View the filing
Lag in raw material settlement cycle with customers impacting margins
p. 4
“We are under discussion with our customers to renegotiate our RM settlement cycle and also discussing renegotiating on the components, which is impacting our margin.”
Kaushalendra Verma, page 4 of the filed PDF · View the filing
Non-recurring Labour Code cost impact on profitability
p. 4
“One, the Labour Code impact, which is almost INR3.6 crores in Q4 and INR11 crores for the entire year.”
Naveen Sorot, page 4 of the filed PDF · View the filing
Geopolitical disruption potentially affecting growth targets
p. 5
“Unless, of course, the global -- the geopolitics which is happening and that brings about some disaster, I think we are ready to reach the levels that we are talking of now.”
Arvind Kapur, page 5 of the filed PDF · View the filing
Delayed regulatory approvals slowing railway and defense business ramp-up
p. 10
“No, it didn't happen. Because in the railways, even though we were ready with the production, the approvals took a little longer time.”
Arvind Kapur, page 10 of the filed PDF · View the filing
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