Pricol Limited (PRICOLLTD) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q4FI26 conference call of Precol Ltd. As a reminder, all participant clients will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this call, please signal for an operator by pressing star and then zero on your touchstone telephones. Please note that this conference call is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorum Advisors. Thank you, and over to you, ma'am.

Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorum Advisors. We represent the Investor Relations of Precall Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's con-call may be forward-looking in nature. Said forward-looking statements are subject to risk and uncertainties, which would cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for the opening remarks. We have with us Mr. Vikram Mohan, Chairman and Managing Director, Mr. PM Ganesh, Chief Executive Officer and Executive Director, Mr. Sithat Manoharan, Group Executive Director, Ms. Madhura Mohan, Executive Director, and Mr. Priya Darsi Bastia, Chief Financial Officer. Without any delay, I request Mr. Vikram to start with his opening remarks. Thank you.

This call today. Namaskar, ladies and gentlemen. I welcome you to the call to discuss the key financial highlights for the year-ending 31st March 2026 and for the fourth quarter of the financial year 2526. The presentation has already been uploaded, and I hope all of you have had a chance to see the presentation. Nevertheless, I would like to give you some highlights of our performance. On a consolidated basis, our revenue from operations for the quarter that has just gone by has crossed the 1,000 crore mark to hit 1,077.9 crores, with an EBITDA of 1,43.28 crores and an EBITDA margin of 13.29 percent. Profit after tax of 73.23 crores. With a fat margin of 6.79%, with a basic EPS of 6 rupees per share. For the entire financial year, for the year ending 31st March, 2026, our revenue from operations was just shy of 4,000 crores, with an EBITDA of 492.91 crores, with an EBITDA margin of 12.44%, with a PAT of 250.80 crores, PAT margin of 6.33%, with an EPS of 20. I am happy to report that we have been able to achieve these numbers with the dedicated work of our entire team in spite of the multiple headwinds that we faced this financial year. This financial year started off with a semiconductor crisis followed by a rare earth magnet crisis Followed by the West Asia crisis. In spite of all of these headwinds, we have been able to deliver a decent set of numbers to you this quarter and for the entire financial year. Our revenue from operations on a consolidated basis, because of our inorganic actions and organic growth, has resulted in a 43.34% growth quarter-on-quarter on a comparable basis. EBITDA, 62.27% increase on a quarter-on-quarter on a comparable basis. And for the entire year, We have been able to show an increase in revenue from operations of 51.24% and the EBITDA for the entire year has seen an increase on the corresponding private period of 47.53%. I'd like to move to the question and answers. As a matter of protocol, we'd like all participants to restrict themselves to one question so that others have a chance to join the question queue. And if you have more than one question, we request you to rejoin the question queue and you'll be given a chance subsequently. Before we start the questions, I'd also like to probably take a few minutes to talk about the outlook, where I have given quite a cautionary statement as part of the Chairman and Managing Director's statement after the board meeting yesterday. Today, the West Asia crisis, I think, is reaching a peak, and the disruptions... Of the West Asia crisis or due to the West Asia crisis is also starting to hit not just the industry but also the economy quite hard. April was reasonably okay because we had a lot of pipeline inventory, pipeline stocks and raw material that were bought at earlier rates. The rupee is on a free fall. Polymer prices have gone up by about 55%. Aluminium has gone up by about 62%. The semiconductors have gone up by about 35%. Memory control devices by about 28%. Freight costs are also spiraling out of control, both inbound and outbound freight. These are multiple headwinds, not just affecting your company, but the industry as a whole and the economy as a whole. All of you would have also seen Prime Minister's address to the nation on cutting back on consumption to save forex and stop purchasing gold, etc. So the situation is quite... We are confident of crossing this storm also with the collective efforts of our entire team, the support of our customers, our suppliers, and ended by a strong balance sheet. We continue to stay focused on mid- to long-term growth and are not scaling back on any investments whatsoever of capital nature, which will hamper the long-term and medium-term prospects of the company. We continue to invest as usual heavily on R&D and on technology to keep developing new products and new technologies to keep us ahead of the curve compared to competition. So while we are not scaling back on any of our critical activities that is going to hamper the growth of the company, we do believe that there will be softening of earnings and... Slowing of the whole automotive sector on account of these geopolitical headwinds that are actually sending ripples across the world. Without further ado, we can move to the questions.

Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may enter star followed by one on your touchtone telephone. If you wish to remove yourself from the question queue, you may enter star and two. Participants are requested to please use only handsets while asking a question. We will wait for a moment while the queue assembles. The first question is from the line of Jatin Chawla from RTL Investments. Please go ahead.

Yeah. Hi. Good evening, and congratulations on a great set of results, and thanks for the opportunity to ask the question. My question is, how do you see your market share on instrument clusters evolve over the next two to three years? And the context is, you know, when we were doing channel checks, we figured out that in the largest OEM in the country, there is a group company which is entering the instrument cluster business. In one other OEM, there is some new competition that is emerging. So in that context, I wanted to understand how do you see your market share evolving over the next two to three years.

Good evening. In fact, we just did a complete analysis of our share of business. We got an external market analyst agency to come and do a complete analysis of the market. And in fact, just last week, we had a workshop on that. We have maintained our market share by volume and increased our market share by value. Competition has always been there. Competition will continue to be there. And what differentiates Precon from our competition is our heavy investment on R&D and product development, which is keeping us ahead of the curve. Will we be able to maintain the market share for the foreseeable future for the next three years? I do not see any different market share because we have got confirmed LOIs for most of the programs. So for the next three years, Bar in peak growth or slowing down of the market, loss of market share is not something that we need to fear about.

Got it. That is very reassuring, sir. I have a couple of other questions, but I'll come back in the queue.

Thank you. The next question is from the line of Sahil Sangvi from Monarch Network Capital. Please go ahead.

Yeah, hi, good evening. Thank you for the opportunity and congratulations for very good numbers. My question is on the financials. So, there is some restatement in the FI25 financials if you look at the borrowing lines and see what their line items. I can point it out specifically if required, but if one can explain, what's the reason for that?

Mr. Sanghvi, we'll get our CFO, Mr. Basia, to answer that question. There have been some changes in the corporate guidelines on how debt has to be treated, and I would request Priyan, our CFO, to clarify on that.

Mr. Sanghvi, good evening.

Good evening. Regrouping is on account of the change in index, there is a circular which came up saying that debt-like items to be shown as borrowing, which the customer bill discounting and vendor bill discounting, which used to be classified under trade payable, have been regrouped to borrow. That is the borrowing which you can see.

Okay, thank you. I'll come back in the queue. Thank you.

So, just to give you a perspective, barring the supplier discounting and the customer bill discounting, which earlier was hitherto treated as trade payable, now actual borrowing asset stands as of 31st March 2026, net debt is 63.11 crores.

Thank you.

Thank you. The next question is from the line of Hitesh Goyal from Origin Capital. Please go ahead.

Yes, sir. Thanks for taking my question. Sir, what...

Goyal, you're not audible. Can you be a little louder, please?

Thanks for taking my question, sir. First question is actually based on, can you give us a revenue for FI 26 of the three segments, like DIS, AC, FMS, and P3L revenue?

I will give you on the total consolidated number, an approximate number. On the DACVS, our revenue is about 60% of our total revenue is coming from DACVS. And the ACFMS is about 20% and PGL will be about 20%.

Okay. And, sir, basically, my question is also on the TFT, LCD, and analog mix, basically, for the industry.

Mr. Goyal, I request you to rejoin the question queue, please, if you don't mind.

Okay. No problem. No problem.

Thank you. The next question is from the line of Aman Agrawal from Carnelian. Please go ahead.

Thank you for the opportunity. My question was basically on the new products and new businesses which we have focused on, can we please share an update on like the PV digital cluster which we were focusing on with Mahindra and Data Motors and also like in terms of creating new business on disk breaks and other verticals, like how is the update there basically?

PB Digital Clusters, we have grown significantly with Tata Motors. We are yet to make an entry into Mahindra. Today, about 75 to 80% of Tata cars are coming out with pre-cause clusters. And we are increasing our market share with Tata. In fact, the new Safari, which we launched, the new Sierra, I stand corrected, which we launched has even won us an award from Tata Motors for the development. Which I was happy to receive from the Managing Director of Tata Motors. With regard to disc brakes, we continue to make steady progress with our key customers. I'm sure that we will meet the forecast that I gave for 2030 in terms of discussion.

Thank you.

Thank you. The next question is from the line of Divyansh Gupta from Latent PMS. Please go ahead.

Hi, sir. One question regarding ABS. Are we manufacturing only the sensors for the ABS or the whole ABS as a package? And is there a plan to put...

We are not into the EBS. Even in the future, when disc brakes become a mature product for us to get into ABS, at this point in time, we have not even commenced development or intend to commence development in the immediate

So, my question was for that less than 125cc bike

that

you are trying to target because of the change in the regulations, what is the exact product?

We were never in the ABS product. We never intended to be in the ABS product in the foreseeable future also. We never, even earlier this question was asked in earlier meetings and that's what we have maintained.

Got it. I'll join back to you.

Thank you. The next question is from the line of Kush Nahar from Electrum PMS. Please go ahead.

Thank you for the opportunity, sir. So, I had a question more on the growth side. So, like you said, that some softness is something that we see going ahead in the industry in general and for the company. So, I think previously we had a guidance of 13 to 15% growth for pre-call and if I'm not wrong, we were targeting to double the revenues of 3PL on the base of 25. So, are there any changes in this guidance?

I think we should ask this question to Mr. Donald Trump on a lighter note because we really don't know how long this war is going to continue and what the impact is going to be, what crude oil prices are going to be like and what the rupee is going to be. And if fertilizer imports are going to be curtailed, then agriculture output is going to reduce, which rural consumption is going to have an impact. So I wish I knew, but even I am not aware, we are all closely connected in the industry and following. But I can assure you that we will be continuing to grow at higher than the market growth rate. And with regard to P3L, I have given a guidance that we aim to double the turnover in three years after taking over the company. I think we are well on track to achieve that. We have won a lot of new businesses and we are now creating capacities to cater to the new businesses from customers that didn't exist before. So we are well on track to double P3L's business or probably even exceed in the three-year time frame that I had promised.

All right, thanks.

Thank you. The next question is from the line of Chirag Jain from MK Global. Please go ahead.

Thank you so much for the opportunity. Sir, you did mention about multiple cost pressures in your opening comments. be navigating from a margin sign point over the next couple of quarters, would that be Welcome to our OEM customer. Thank you very much.

Q3 of the last financial year. But having said that, we are not going with the normal route. In this case, we have expedited it, and we have requested for supplementary invoicing and price correction to be done immediately. Thank you. I think, personally, it's an evolving process. We have put out an active team that's engaging with our top 10-12 customers to recover costs. I think it's going to be tripartite. There is going to be a price increase in the vehicle. OEMs will absorb some of that shock, and I think, considering a long-term partnership with OEMs, we also have to absorb some of that shock. How much is that number going to be? And how long is this going to take? It's probably time will tell. But I think next quarter we'll have a better idea of how much each of the stakeholders in this pie will take.

Thank you. Thank you so much for the detail. Can we recover the entire amount from the OEM? I do not think so.

Thank you. Next question is from the line of Ranganvi, an individual investor. Please go ahead.

Please go ahead. But I find the margin on the employees, this one.

Take it one question at a time, Mr. Rangan. I'd like to thank you. Yes, 2022, I had given a guidance that for FY26, we will hit the 4,000 crore mark with about a debt equity ratio of less than one is to one. I'm happy to note we have hit that mark, but with next to no debt. So, I'm happy that our team has been able to deliver on the promise made to you four years ago, right after COVID, once we recovered. Mrs. Vanita Mohan has stepped down as an active role from Precall, and I've taken over as the chairman of the company. She goes on to become the chairperson of Precall Holdings, our holding company.

Okay, thank you. I don't have anything because I think that I'm also satisfied with the work here. Thanks.

I will forward answer, Mr. Rangan, because this is your favorite topic. So I take the liberty of my old friend and I have known you for 14-15 years. So I am going to take the liberty of giving you a third answer also. As for our dividend policy, we were eligible for paying out a higher dividend this year after the interim dividend. But as a matter of caution, our entire board met and deliberated on this subject yesterday. And we believed that having already declared an interim Golden Jubilee dividend of 200%, we felt it was good to conserve cash knowing fully well that with all the amount of capital investments and the headwinds ahead of us, it was important to conserve cash. So this is something that we took a conscious call yesterday. We had the subject of the dividend and the entire board, including myself, recommended that we retain it at a 200% dividend for the FI26, see the performance for the next six months, and then take a call on that subject. I know you probably were intending to ask that question because that's your favorite subject, so I thought I will preempt and answer that for the benefit of other investors also.

Yeah, very nice. Actually, what you have done is a very extraordinary thing. I know that you have done always nothing to be accomplished now. I am very happy about that. Thank you.

Thank you. Thank you. The next question is from the line of Hitesh Goal from Origin Capital. Please go ahead.

Can you tell us what was the exports in F526? And you have talked about exports being 20% of revenue, right? So when can we achieve that?

My desire was exports to be 20% of revenue, and I've always maintained in my earlier calls, so that is one area where we fail to deliver, and our goal is to take it to 10% of revenue in the coming years. And as we speak, it stands at around 7% of revenue.

Thank you, sir.

Thank you. Next question is from the line of Sahil Sangvi from Monarch Network Capital. Please go ahead.

Thank you for the opportunity again. My question is, can you please give us details on the progress of your MOU with BO of Electronics and also with Domino and the timelines, please, of commencement of... How much do you think?

We are working internally on doing the backlight module. Work is under progress on the equipment and the missionaries and the buildings and we will be commencing in about 10 to 12 months production. With Dominoor, more like 18 months to 24 months is where we will be ready and the early stages of revenue will start trickling in. Right? With regard to PYW, it's a technological partnership where we are using their select technologies to develop products for our existing customers.

Follow-up, if I may, on the Veritronics sign.

That's BOE.

BOE, yeah, yeah. If I may, so what kind of contracts or what kind of revenue estimates, I mean, if you can give some direction, not the number, but maybe some order book that you have or some visibility that you have.

It's not going to be adding any incremental revenue. It's only a backward integration that's going to strengthen our product offering.

Understood. Thank you.

The next question is from the line of Ashwin Patil from LKP Securities. Please go ahead.

Yeah, thanks for taking my question, sir. My question is regarding the ACFMS business which we had guided for a 30-35% kind of growth in the last call. So are we still maintaining that particular outlook, and what would be the outlook for this particular business going forward, sir?

We are working towards 30% growth, and particularly with a focus on exports, but the headwinds since the last two, three months, I'm not sure we will be able to meet those numbers, because the rupee is on a free fall, the crude oil prices have gone for a toss. So, like I said, I wish I were nostradomists, but I think we need to wait until September to see when the world economy is going to come back to some degree of normalcy. Before we hit that strike. Under normal conditions, we should have hit a 30% growth rate year on year.

So, what is our growth rate for this year then till now? If less than 30%, then how much is the number, sir?

For FI 26?

Yeah.

Yeah. I'd request Ganesh or CEO Needy to answer that, please.

FI 26, we have achieved the 30% growth rate.

Okay.

As our chairman and managing director said, it is a little difficult for us to predict. Maybe after September, we can have a better answer in this.

Okay. So for FI 26, it's 30% close to 30%.

That's right.

That's right.

Thank you. Next question is from the line of Preet Pilani from Incred AMC. Please go ahead.

Thank you for the opportunity. I just wanted to ask one book grouping question. What was our revenue from P3L for this quarter, along with the margin? And also, if you could mention the revenue of non-bricks in ACPMA segment for the entire year.

P3L, Priyam, can you just comment for the year, how much turnover we closed at?

For the year, P3L generated a revenue of 924 crores, with EBITDA of 9.24%.

Part of this involved a business that had to be transferred back to TBS, which we have also completed the transfer as of February. So that segment of business of about 65 crores doesn't, will not continue. That was not a polymer business, that was a forming business which was operating, which we operated on contract.

And on non-brick side, in ACPMA segment, non-bricks.

96-97% of the revenue comes from non-brake. Overall, this year, it's about 750 crores.

Thank you, sir. And one last thing on raw material side. You mentioned that raw material.

Please request you to join the queue, please. That's the protocol we've been following.

Sure, sure. Thank you.

Thank you, sir.

Thank you, sir.

The next question is from the line of Bansh Modi from Swan Investments. Please go ahead.

Hi. Thank you for the opportunity and congrats on our great set of numbers. I would just like to request if you could share the segmental numbers in the information cluster segment between the vehicle segments.

Please get in touch with our CFO, and whatever non-competible data we'll be happy to provide. Okay, thank you. I'll call back to the queue.

Thank you. Next question is from the line of Shibam Batra from Ambit AMC. Please go ahead.

Hi, sir. Thanks for taking my question. Congratulations on a strong set of numbers. Sir, just a bookkeeping question. In your standalone books, your other expenses have shot up by 32% on a quarter-on-quarter basis. Any particular runoff that you want to call off?

I request our CEO to answer that, please. To whom the expense, if you compare quarter and quarter, yes, it has gone up. Two items which are contributing to that, one is

Forex, which is, you know, it has gone up to 95 rupees, and the other one is the freight, because the freight cost is in line with the revenue increase,

but these two are contributing to the increase.

Thank you. The next question is from the line of Aman Agrawal from Carliniel. Please go ahead.

Sir, thank you for the follow-up. My question was on P3L, basically. So, if I see last quarter, this is the number which our CFOs gave. We made 11% kind of EBITDA margins in P3L. So, can you guide, like, is this something sustainable, or do we expect margin to reward back to 10, 10.5% kind of margins in this business, basically?

That's an interesting question, and that's a strategic call that I've taken also as chairman of that board, that we will start forward investing in P3L in line with Brickall's strategy of investing in technology. So we are setting up a center of excellence in polymer technology. So we will be forward investing in that. And also for the new plants that are coming up, we will be forward recruiting of personnel and to commission those plants. So there will be a softening of margins over two years before the benefits of all of this start kicking in. So we will go back to normalized margins of 10% or so and then kick back up going back.

Got it. Thank you, sir. And if I can raise in one more question, sir, are we looking to get any more M&As, basically? Like, we had talking about more deals, maybe, in plastic division. So, is there anything we are evaluating and, like, anything we want to close?

Thank you. Assets that we are considering, and we have taken some calls, and actually active negotiations and due diligence is in progress. That's all I can say at this time.

And sir, this is on mainly plastic side or some other business segment.

We are evaluating multiple opportunities.

Okay. Thank you, sir. Thank you for answering my question. All of us.

Thank you. The next question is from the line of Kush Nahar from Electrum PMS. Please go ahead.

Please go ahead. Put it on the content for vehicles, so what is it today, and considering the new products in the pipeline that we have across the segments, how do we see it panning out over the next three to five years?

Thank you very much for answering that question, Mr. Nahar, because you have a 4,000 rupee cluster and a Tata car, and then you have a 30,000 rupee cluster and a TVS BMW or a BMW motorbike, or you have a 1,000 rupee cluster and then you have 3,000 rupees of plastics and 1,000 odd rupees of SPM. So I think a broad-based question like that, based on the CC of the vehicle or the OEM, is very difficult to answer.

Directionally, considering the profile, do we think, and considering the TFT mix that is changing, maybe we can double or 1.5 to 2x our realization in terms of content for vehicle?

We have opened our account with Honda on Cluster. So, our content per vehicle from literally very low and Honda is going to go up very high. TVS, we are already very high, and we are now de-risking by working on other customers. So, yes, our intent is with about 10 strategic customers to keep increasing our wallet share so that, you know, we are at least 50% higher than what we are today in the next three years.

Right, sir. So, just if I can add one more question, what will be the CAPEX figure for the next three years?

We are, I'm happy to, that's a good question, and in fact, I was wanting to use that as my closing note. I'm happy to inform that we have a very, very healthy pipeline of new business, both domestic and international, across all our divisions, be it for ACFMS or Polymer or for... We are starting our next major cycle of capex this year as our previous cycle of capex has come to an end and our capacity utilization has reached a peak. In fact, so much so that in plastics we are unable to grow this year because of lack of capacity. Which is why you see the ROCE at a very high figure compared to, you know, what I had given guidance for because of sweating the capital assets. So we are starting a major cycle of capex. In fact, this year in itself, we have planned for about between 680 to 700 crores of capex to cater to. All of our new businesses that we have won, new plants, new machines, so on and so forth, which will keep propelling us forward to maintain this growth momentum. So, there will be some amount of debt, as I mentioned, but a very healthy amount of debt. I'm always very conservative when it comes to debt. A lot of our investors keep telling us that I'm a little risk-eward, but I prefer to remain that way. So, we will have a debt-equity ratio of probably about 0.5 or 0.6, not even hitting 1, and that's how we plan to operate.

All right, sir. Thank you.

All right, sir. Thank you.

Thank you. Ladies and gentlemen, that was the last question. I now hand the floor back to the management for closing comments.

Everyone for participating and for some great questions. I'm sorry I could not give a clear answer, especially with regard to the growth, because it's affected macroeconomic factors, geopolitical factors over which we have no control. But the management will leave no stone unturned to recover all costs possible and control all costs possible. To maintain earnings, but having said that, there will be some softening of earnings. This is the voice of not just Pricor, but the voice of the industry. And this is going to be a short-term pain, and we just hope and pray that this entire geopolitical mess comes to an end sooner rather than later, and all of us can focus on strategically growing the business for the mid to long term. We stay committed to our mid to long term projections, our investments, and our recommitment to technology. And in the polymer business, we are going to be investing in technology and converting it from a component maker to a value-added polymer player. And we do hope that those will also pay dividends like in our other divisions in the years to come. Thank you very much for your confidence in the company. And I look forward to connecting with you on the H1 call six months from now. Thank you. Good evening. Namaskar.

Thank you very much, sir. On behalf of Precol Limited, that concludes this conference call. Thank you all for joining us, and you may now disconnect your line. Thank you.