Any current/future new fundraising through debt or equity?

Rico Auto Industries is currently focusing on utilizing existing capacities and reducing debt before pursuing new expansions. The company has taken long-term loans for the greenfield project in Hosur, leading to a rise in long-term borrowings from INR 274 crores to INR 330 crores. Total consolidated debt remains stable around INR 670 crores, with simultaneous repayment of around INR 100 crores annually. There is no indication of immediate plans for new equity fundraises. The Board is cautious about new investments, approving capital expenditure only when necessary and where customer demand is

Any current/future capex/capital investment/strategic investment?

Current focus is on better utilization of existing capacities before new capex. New plant in Hosur is coming up, with equipment potentially being shifted from existing plants. Considering setting up a plant in Gujarat close to customers like Maruti and Hero but only after optimizing current capacities. Board is cautious and approves all investments, emphasizing debt reduction before further expansion. Major capex primarily involves casting (foundries) and machining lines, which are mostly fungible and funded significantly by customers. Expansion tied to customer demand, especially for high-tec

Future growth expectations in sales/revenue/volumes?

Rico Auto Industries expects significant revenue growth, targeting around INR 3,000+ crores for FY 2026 and close to INR 4,000 crores by 2028-2029. Sales to the U.S. market are projected to increase by 40-50% in the current year and another 50% next year. Domestic market growth driven by increased business from Maruti Suzuki, Hero, Toyota, Tata Motors, and Mahindra. New orders and increased share of business with existing customers will improve capacity utilization, especially in casting and machining units. Margins are expected to improve quarter-on-quarter, with new products offering better

Future growth expectations in earnings/operating earnings/profits/EPS?

Revenues are expected to grow significantly from around INR 2,400 crores to INR 4,000 crores by 2028-29, driven by ramp-up in multiple OEMs including Maruti Suzuki, Toyota (including Aisin and Musashi), Tata Motors, Mahindra, Honda, and exports to BMW and GKN. EBITDA margins aim to improve steadily quarter-on-quarter, targeting 12-13% by Q4 FY '26 and aspirations up to 20% medium to long term. Margins improvement driven by better utilization of existing capacity and higher-margin new products, especially machining and machining-led components. Capacity utilization expected to rise to ~85

Current/ Expected Orderbook/ Pending Orders?

The company expects to scale up revenues from around INR 2,400 crores to INR 4,000 crores by 2028-2029, based on current order visibility and discussions. The orderbook includes expansions with major OEMs such as Maruti Suzuki, Toyota (including Aisin and Musashi), Tata Motors, Mahindra, Honda, and new customers like Knorr-Bremse. There is a significant ramp-up in orders for exports, including BMW and GKN. New orders are linked both to increased shares from existing customers and new product launches, with reasonable predictability due to long-standing OEM relationships. Current capaci

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Rico Auto Industries LtdQ3 FY25Auto Components

Rico Auto Industries Ltd Q3 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹141P/E: 29.7Market Cap: ₹1.7K CrSector: Auto Components

Management growth scorecard

Revenue

Category 1

Margin

Category 1

Fundraise

Yes

Order

Yes

Capex

Yes

5 of 5 growth signals are positive — a strong management growth story.

Full analysis

Revenue guidance

Category 1

→Rico Auto Industries expects significant revenue growth, targeting around INR 3,000+ crores for FY 2026 and close to INR 4,000 crores by 2028-2029.
→Sales to the U.S. market are projected to increase by 40-50% in the current year and another 50% next year.
→Domestic market growth driven by increased business from Maruti Suzuki, Hero, Toyota, Tata Motors, and Mahindra.
→New orders and increased share of business with existing customers will improve capacity utilization, especially in casting and machining units.
→Margins are expected to improve quarter-on-quarter, with new products offering better profitability above 14-15%.
→Long-term capacity expansion will focus more on specialized machining and strategic customers like BMW, GKN, and Toyota.
→Strong customer investments in tooling and capacity underpin the growth visibility and predictability.

Margin guidance

Category 1

→Revenues are expected to grow significantly from around INR 2,400 crores to INR 4,000 crores by 2028-29, driven by ramp-up in multiple OEMs including Maruti Suzuki, Toyota (including Aisin and Musashi), Tata Motors, Mahindra, Honda, and exports to BMW and GKN.
→EBITDA margins aim to improve steadily quarter-on-quarter, targeting 12-13% by Q4 FY '26 and aspirations up to 20% medium to long term.
→Margins improvement driven by better utilization of existing capacity and higher-margin new products, especially machining and machining-led components.
→Capacity utilization expected to rise to ~85-90% in foundry and die casting units by next year, enabling better margin profile.
→Focus on zero or low capex expansion and leveraging capacity shifts to optimize investments.
→Steady reduction in debt, with INR 100 crores repayment annually, enhancing financial health.
→Railway and defense segments expected to contribute INR 70-90 crores revenue with better margins in coming years.
→Overall profitability and EPS growth aligned with volume growth, margin expansion, and operational efficiencies.

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Fundraise plans

Yes

→Rico Auto Industries is currently focusing on utilizing existing capacities and reducing debt before pursuing new expansions.
→The company has taken long-term loans for the greenfield project in Hosur, leading to a rise in long-term borrowings from INR 274 crores to INR 330 crores.
→Total consolidated debt remains stable around INR 670 crores, with simultaneous repayment of around INR 100 crores annually.
→There is no indication of immediate plans for new equity fundraises.
→The Board is cautious about new investments, approving capital expenditure only when necessary and where customer demand is assured.
→Land monetization is being explored to potentially generate funds, but current offers are deemed insufficient.
→Future capex will be judicious, with a preference for asset utilization and customer co-investment over outright new plant creation unless strongly warranted.

Order book

Yes

→The company expects to scale up revenues from around INR 2,400 crores to INR 4,000 crores by 2028-2029, based on current order visibility and discussions.
→The orderbook includes expansions with major OEMs such as Maruti Suzuki, Toyota (including Aisin and Musashi), Tata Motors, Mahindra, Honda, and new customers like Knorr-Bremse.
→There is a significant ramp-up in orders for exports, including BMW and GKN.
→New orders are linked both to increased shares from existing customers and new product launches, with reasonable predictability due to long-standing OEM relationships.
→Current capacity utilization is expected to rise to 85%+ by next year with new product introductions contributing to better margins.
→The company is proceeding cautiously with capex, focusing first on better utilization of existing capacities before new plant setups.

Capex plans

Yes

→Current focus is on better utilization of existing capacities before new capex.
→New plant in Hosur is coming up, with equipment potentially being shifted from existing plants.
→Considering setting up a plant in Gujarat close to customers like Maruti and Hero but only after optimizing current capacities.
→Board is cautious and approves all investments, emphasizing debt reduction before further expansion.
→Major capex primarily involves casting (foundries) and machining lines, which are mostly fungible and funded significantly by customers.
→Expansion tied to customer demand, especially for high-technology components for OEMs like BMW, GKN, Toyota, Maruti, Hero.
→Target to manage debt reduction alongside investments; approximately INR 2,500 crores invested in new foundry machines earlier.
→No major greenfield investments planned without confirmed customer orders.
→Investments prioritized in machining to improve margins alongside casting capacity.

How does Rico Auto Industries Ltd rank vs peers in Auto Components?

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1Rico Auto Industries Ltd

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