Precision Camshafts Limited (PRECAM) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Q3 FI 2025-26 earnings conference call hosted by Precision Campshaft Ltd. As a reminder, all participant lines will be in the listen-only mode, and there will be no opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. And I'll hand the conference over to Mr. Karan Shah, Whole-Time Director, Business Development. Thank you, and over to you, Mr. Shah.

Thank you. Good afternoon, ladies and gentlemen. I'd like to thank you all for being a part of this Precision Capture Q3 FY26 Earnings Conference call. In case of any detailed questions related to finance, please email us your questions at cs at pclindia.in, and we'll provide you answers in a reasonable time. We've submitted our investors' presentation for Q3 FY26 to the stock exchanges on 5th of March, and the same is available on our website. Investors are requested to refer to the same. I'm happy to share that Precision Campus Limited has reported in-end profit of 9.58 crores for this quarter in comparison to a deficit of 42 crores in the previous quarter, and a profit of 5 crores in the corresponding quarter ended December 31st, 2024. The financial performance for the quarter was primarily driven by an increase in revenue of 2.44 crores and a rise of The Indian market continues to grow and be resilient to global slowdown. In these difficult global times, PCL posted a standalone revenue of 153 crores with EBITDA margin of 14%, and the stability comes from the increased demand from the existing customers in India. As mentioned in the previous quarter, our management has focused on this growing market, and we are happy to share that PCL has been awarded several new businesses in the last year, which will extend our order book until 2032. PCL has been awarded new business from key customers. All of the below that I will explain are over and above the running business that we have at TCL at this point. We have received new order from Maruti Suzuki for three-cylinder engine camshafts with an approximate volume of 12,40,000 camshafts per year in fast condition starting in 2027. We have received business from Tier 1 of Hyundai India for supplies to their new Pune plant with approximate volume of 280,000 camshafts in fast condition starting in 2026. We have received business from Mahindra for their existing running engines as a resourcing of approximately 600,000 camshafts per year in fully machined condition starting in FY2627, and the peak volume would be in FY2728. We have received business from Uzbekistan Auto for their running engines with an approximate volume of 120,000 camshafts per year in fully machined condition, starting in FY2627. And with Tata Motors, we have benefited from the increase in volumes and increase in share of business by getting approximately 280,000 camshafts per year in fully machined condition, starting in FY2627 itself. In addition, we have got new business from Renault-Nissan, India, with volume increase of 120,000 machine camshafts per year, again, starting in FY2627. Besides this, we see extension of business beyond what was originally planned for Toyota India as well as for General Motors in Brazil, which the volumes would go to 2030 and beyond. Of course, I am sharing all of this information subject to market conditions in the future, but we are happy to share that these new orders represent a cumulative business potential of nearly 1,500 crores over the lifetime of these programs, over and above the strong and stable business that PCL currently enjoys. This significant addition to our order book provides Greater revenue visibility and reflects the continued confidence that our customers place in PCS capabilities, quality, and long-term partnership approach. With these programs now moving firmly in the execution phase, they represent a milestone in PCS growth journey. Our teams are fully engaged to ensure a smooth and timely ramp-up. And at the same time, our management continues to actively pursue new opportunities in Europe and North America. Where we see encouraging traction from existing and new customers. This ongoing engagement gives us confidence that our global business pipeline will continue to strengthen in the coming years. To support these new programs, PCR is investing approximately 120 crores towards capacity enhancement and advanced manufacturing capabilities. A key part of this investment is development of a state-of-the-art manufacturing facility at our new location in Solapur. Designed to meet global standards in efficiency, quality, and scalability. The plant infrastructure is already completed, and installation of machinery is progressing well and will be completed in this calendar year. Once fully operational, the SolarCode facility will significantly enhance our production capabilities and position PCL to efficiently serve both current commitments and future growth opportunities, strengthening our position as a reliable global manufacturing partner. We recognize that the industry's transition towards electrification is critical long-term consideration, and our strategy to address this is to continuously assess the ICE demand, which continues to grow in India and globally, diversification into adjacent precision-engineered components, and evaluation of opportunities aligned with these evolving technologies. Further, I would like to inform investors that the second branch of our solar power plant, located in Mangalveda, Solapur, with a capacity of 14 megawatts, was commissioned in the month of December 2025, and with this addition, the total solar plant now has a total capacity of 29 megawatts. The enhanced capacity is expected to assist the company in reducing its dependency on non-renewable energy sources, resulting in lower power costs and a reduction in the company's carbon footprint. Now, coming to our subsidiary, Memco, it reported a net loss of 45 lakhs in the quarter ended compared to a net profit of 1.5 lakhs in the previous quarter. This was mainly due to a loss of sale of approximately 2.8 crores in Q3. Our e-mobility subsidiary, EMOS, in the Netherlands reported a loss of 0.4 crores during the quarter as compared to a net loss of 0.4 crores also in the previous quarter, and the total revenue earned was 24 crores as compared to 22 crores in the quarter before. Despite the prevailing market conditions in Europe, the company has maintained a stable operational position and continues to secure sufficient orders to meet its operational expenditure. However, market conditions are evolving, and we will keep investors updated of the same. Turning to our e-mobility business in India, I would like to inform shareholders that BCL has slowed down its Tata-Ace conversion business due to changes in regulations and not enough visibility as previously mentioned. However, the development of the electric heavy commercial vehicle continues, and we hope to deliver the vehicle to customers very, very soon. Coming to the financial performance of the companies, the standalone business grew by 2.17% quarter-on-quarter to 153 crores, and EBITDA margin was at 14%, whereas FAT margin was at 6.2. The consolidated business decreased by 9% quarter-on-quarter to 188 crores, and the EBITDA margin was 12.5%, and FAT was 4.89. Memco posted a revenue of 11.82 crores, and EMOS posted a revenue of 23.95 crores in the last quarter. With this, I would like to end my address and like to open the floor for questions and answers. Thank you very much.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the test on telephone. If you wish to remove yourself from the question, you may press R and B. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Participants, you may press star and one to ask the question. The first question is from the line of Gautam Rajesh from Everflow Partners.

Please go ahead.

Hi, sir. Thank you for the opportunity. My question was on the update or the status of the EV business, the Indian EV business, with regard to our strategy and how are we going forward and currently where we are. If you can give us more details on the current position and where we plan or strategy as to go in the future for the Indian EV business, that'd be great.

Sure, thank you. The EV business globally has slowed down quite a bit in the last two to three years, and we see this very clearly from all our OEM customers, whether in India or globally, where there has been a… Nearly reversal of strategy from going all-electric to now looking at ICE and hybrid powertrains for the long-term future. This, in one way, is very good for the parent business and continues the growth of the camshaft business, but it has had a slowdown on the EV business, whether it is in Europe or in India. I think the European business is stable at this point of time, but with changing market conditions, it's hard to say at this point how much growth is expected in the coming quarters or years, but that we will update shortly as we know. In terms of India, we expected quite a lot of opportunity in the Tata ACE conversion business, but that has not fructified due to recent changes in regulations, number one, and also all the complications in the ecosystem like re-registration, insurance, financing, service, infrastructure, etc. So, right now, our focus is on the HCV market, where we are electrifying a heavy commercial vehicle for a customer, and will be delivered to the customer in the coming month, and from there, we look at… Strong order book, but this is, again, subject to the successful testing of the vehicle to start with and a certain regulatory environment that we need to overcome in the coming months to ensure that we have a good product. That's kind of where we are.

Just to follow up, being a Tata Ease business, has he completely stopped it because of the regulatory issues, electrification, and the infrastructure along with that? And regarding the HCV, are we delivering it to a client, or is the testing going to happen in a few months? And would that be in Q4 or Q1 or Q27? And post-mangly, will we have an order book, or do we already have an order book? And can you tell me about the regulatory listing that they're having?

Now, so the Pat IS has nearly stopped because of all the challenges that I mentioned before. Again, also, it's a razor-thin margin kind of product, so it was very difficult to scale up in the fashion that we wanted to. Number two on the HCD. We are working directly with a customer for this vehicle. It is not something that we are developing and testing and hoping to get an order. It is for a customer, and we have a LOI in place for certain volumes that we expect from one customer. Of course, we will expand it beyond this one customer going forward. But, yeah, the vehicle will be delivered to the customer in the next month and not our internal testing.

If it's being delivered, what are the regulatory, you had mentioned some regulatory requirements.

Yeah, we have to go through certification and homologation, which is... That's before the delivery, right? No, we will do this in parallel because we are testing the vehicle as well as certifying it parallelly.

Is that for commercial use or not just for that customer? Like, how can you sell it to the customer without certifying or testing it then?

It will, of course, be for testing purposes only, right, to start with, to the customers, but in their use case, yeah. All right, all right. Thank you so much. Thank you.

Thank you. Varas Abhinj, you may press star and one to ask a question. Next question is from the line of Prithika from Neomai Lacer Management. Please go ahead.

Hi, could you let us know the sustainability of demand over the next two to three years? And does the company see any slowdown signals from the OEMs?

Thank you for the question. I think, as I mentioned during the opening remarks, we have received several new orders from customers, be it in India or probably, and we actually see an increase in business in the next two to three years compared to where we are today, for which we have done the capex in the plant as well as the machining lines. So we actually see an increase in business in the medium term and in the long term. We don't see any decline or any slowdown at this point of time, at least from our current customers. Beyond our current customers, we are also engaged with new customers to look at new products and new CampShare business as well.

Okay, okay. All right. And my other question is, could you provide us a closer look on the business performance of Memco and EMOS?

Yeah, Memco, the company is small. It's about 5% or 6% of the total group revenue. It is stable, self-sufficient, self-funded. And it's about 50-55 crores in turnover and has a profitability of around 13-14% EBITDA margins and continues to be stable. We have a target and a roadmap to reach about 100 crores in the next two years, and we are actively working with customers to achieve that target. So that's on Nemco. On EMOS, like I mentioned in the previous comments, the European side of business is... Stable, but again, subject to a lot of market conditions, geopolitical changes happening in the area, pushback on EV that is happening very clearly and so on. And on the India side of things, we are developing this electric HCV, which will be in the market in the next year.

Okay, okay, thank you.

Thank you.

Thank you. Participants, you must start at 1 to ask a question. Next question is from Lenaf Kalpesh Shah, an individual investor. Please go ahead.

Hi, sir. Can you please share whether the company is actively evaluating any acquisitions or maybe strategic partnerships or diversification opportunities in order to strengthen its product portfolio geographic presence?

Yeah, absolutely. Thank you for the question. We are very actively looking at opportunities, but these will be necessarily in India. We are not looking at the European or American market for these type of opportunities, and we are actively looking in the Indian market where there is growth in the automotive as well as non-automotive sector, including… And we are looking at all opportunities, which will basically be adjacent to our expertise, which is casting, machining, forging, and assembly. So, that's the area we are looking at.

Okay, understood. And any specific reasons as to why not the international markets?

I think that... The examples have been very clear in the last few years where the international markets are actually not growing at all. In fact, there is degrowth in these markets. Companies that are available for sale are under tremendous financial distress, and that's not something that we would like to take on board. We would rather look at a market which is growing, which is, and, more importantly, in our control and has a cultural fit to what we do as well. So that's the reason why we look at India very foolishly right now.

Understood, sir. Thank you so much. Thank you.

Thank you.

Ladies and gentlemen, you may press star at once to ask a question. Next question is from the line of support from Investor Plus.

Please, go ahead.

Hi, sir. Sir, as you had mentioned in the previous conference call and also mentioned in this one about the expansion plans to Europe and North America. So, sir, can you please throw some colors on how would that affect on our domestic versus export revenue? And also, what would be our camshaft versus EV composition in those areas?

Okay, thank you. Look, the comment related to expansion in Europe and North America is purely related to our camshaft business and machine components business. It is not related to the EV business. EV business, I think I have been quite clear in what we are doing in India and what we are doing in Europe. We are engaged with... Several customers in North America, South America, in Europe, and other geographies where we're looking for new business opportunities for camshafts and other niche machine products or niche cast products for which we are in touch with several customers. We also have representation in these areas from PCL side, which are actively working on these areas as well. And we see good opportunities there because... These geographies are becoming increasingly difficult to operate businesses, increasingly more costly in terms of energy costs, power costs, labor costs, and so on, which makes India a very good alternative in terms of sourcing of such critical components. And that's where we see that we can use our experience, our... Connect with the industry and so on to grow the business more. At this point of time, India and export is about 50-50. We see it remaining like that, actually, not because we don't want to grow the export market, but because the Indian market is one which is growing in double digits nearly. And we are, of course, participating in that growth.

Yeah.

Good day, sir. Thank you.

Thank you. Thank you. Participants, you may press star and 1 to ask a question. Ladies and gentlemen, you may press start and once to ask the question. As there are no further questions, I'll now hand the conference over to Mr. Karim Shah for closing comments.

Thank you so much all for participating in our earnings conference call for Q3, FY26. I hope I've been able to answer most of your queries, and we look forward to your participation in the next quarter. Thank you very much.

Thank you very much. On behalf of Precision Camshaft Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the line. Thank you.