Any current/future new fundraising through debt or equity?

No specific mention of any new fundraising through debt or equity in the transcript. The company is focusing on repaying existing debt: around INR 90 crores repayment in FY25 and INR 80 crores in FY26. Interest costs are expected to remain stable or reduce due to repayments and no further debt increase implied. There is discussion about potential land sale, but only if savings exceed INR 500-600 crores after costs, indicating focus on asset monetization rather than new fundraising. Investments planned mainly for the Hosur plant expansion involve transferring equipment from Toyota and new build

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

Rico Auto has acquired land in Hosur, Tamil Nadu, close to the Karnataka border, primarily to be closer to Toyota and facilitate transfer of component manufacturing to their plants. Capex for the Hosur plant will involve construction of buildings and utilities; machinery will largely be transferred from Toyota's existing equipment at depreciated prices. Discussions are ongoing with customers like CSA and TVS for new components, which may lead to further investments based on their requirements. The company is evaluating the potential sale of land banks; only if net savings exceed INR 500-600 cr

Future growth expectations in sales/revenue/volumes?

Projected conservative revenue growth of 15% for FY25, mainly driven by increased business with Maruti Suzuki, Hero, and new customers like Suzuki two-wheelers. Significant ramp-up expected from June onwards due to delayed programs starting, including new electric vehicle components for BMW and restarted orders from GKN. New business additions include Knorr-Bremse, Case New Holland, Piaggio (clutch orders), and diversion of business from other suppliers. Defence sector revenue cautiously guided at INR 60 crores for FY25, expected to grow much beyond INR 200-300 crores by FY26. Long-term growth

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

The company is confident in achieving and likely exceeding the current year's targets, with a projected 15% revenue growth driven primarily by Maruti Suzuki and new business wins. EBITDA margin target is around 11.5% for the year, with improvements expected over quarters, potentially exceeding 12% by year-end due to cost savings in manpower, power, and other areas. Defence business revenue is conservatively guided at INR 60 crores for FY25 with expectations to surpass INR 200-300 crores by FY26, indicating strong growth potential. Profitability is expected to improve due to permanent savings f

Current/ Expected Orderbook/ Pending Orders?

Defence sector orderbook is showing traction with training ammunition orders; some orders delayed due to approval cycles but products are ready to ship. A large fuse tender (~INR 10,000 crores over 10 years) was withdrawn but Rico expects to supply fuse components via DPSUs regardless. Defence revenue guidance for FY25 is conservative at INR 60 crores; expected to cross INR 100 crores later; FY26 forecast is above INR 200-300 crores. Automotive sector new orders from Maruti Suzuki, Hero, Aisin (delayed but important), Knorr-Bremse, Case New Holland, Piaggio, BMW (electric vehicle components),

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Rico Auto Industries LtdQ1 FY24Auto Components

Rico Auto Industries Ltd Q1 FY24 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 3

Margin

Category 2

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Projected conservative revenue growth of 15% for FY25, mainly driven by increased business with Maruti Suzuki, Hero, and new customers like Suzuki two-wheelers.
→Significant ramp-up expected from June onwards due to delayed programs starting, including new electric vehicle components for BMW and restarted orders from GKN.
→New business additions include Knorr-Bremse, Case New Holland, Piaggio (clutch orders), and diversion of business from other suppliers.
→Defence sector revenue cautiously guided at INR 60 crores for FY25, expected to grow much beyond INR 200-300 crores by FY26.
→Long-term growth supported by strategic expansion into electric and hybrid vehicle components.
→Capacity expansion underway at Hosur plant to serve Toyota and Maruti Suzuki.
→Overall, management confident of exceeding set targets with better profitability and sustainable savings.

Margin guidance

Category 2

→The company is confident in achieving and likely exceeding the current year's targets, with a projected 15% revenue growth driven primarily by Maruti Suzuki and new business wins.
→EBITDA margin target is around 11.5% for the year, with improvements expected over quarters, potentially exceeding 12% by year-end due to cost savings in manpower, power, and other areas.
→Defence business revenue is conservatively guided at INR 60 crores for FY25 with expectations to surpass INR 200-300 crores by FY26, indicating strong growth potential.
→Profitability is expected to improve due to permanent savings from cost rationalization and better utilization of equipment from discontinued or downsized programs.
→New business from electric vehicle components (BMW, GKN, Knorr-Bremse, Piaggio, Suzuki Two-Wheeler) will contribute to future earnings growth.
→Overall, management emphasizes cautious optimism but with confidence in sustainable earnings and margin expansion.

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Fundraise plans

→No specific mention of any new fundraising through debt or equity in the transcript.
→The company is focusing on repaying existing debt: around INR 90 crores repayment in FY25 and INR 80 crores in FY26.
→Interest costs are expected to remain stable or reduce due to repayments and no further debt increase implied.
→There is discussion about potential land sale, but only if savings exceed INR 500-600 crores after costs, indicating focus on asset monetization rather than new fundraising.
→Investments planned mainly for the Hosur plant expansion involve transferring equipment from Toyota and new building construction, but no indication of external capital raising.

Order book

Yes

→Defence sector orderbook is showing traction with training ammunition orders; some orders delayed due to approval cycles but products are ready to ship.
→A large fuse tender (~INR 10,000 crores over 10 years) was withdrawn but Rico expects to supply fuse components via DPSUs regardless.
→Defence revenue guidance for FY25 is conservative at INR 60 crores; expected to cross INR 100 crores later; FY26 forecast is above INR 200-300 crores.
→Automotive sector new orders from Maruti Suzuki, Hero, Aisin (delayed but important), Knorr-Bremse, Case New Holland, Piaggio, BMW (electric vehicle components), and Suzuki two-wheelers are driving growth.
→GKN exports will restart mid-year after early program end last year.
→Internal order backlog expected to generate strong turnover from June onwards.
→Total revenue guidance excluding defence around INR 2,450-2,480 crores for FY25.

Capex plans

Yes

→Rico Auto has acquired land in Hosur, Tamil Nadu, close to the Karnataka border, primarily to be closer to Toyota and facilitate transfer of component manufacturing to their plants.
→Capex for the Hosur plant will involve construction of buildings and utilities; machinery will largely be transferred from Toyota's existing equipment at depreciated prices.
→Discussions are ongoing with customers like CSA and TVS for new components, which may lead to further investments based on their requirements.
→The company is evaluating the potential sale of land banks; only if net savings exceed INR 500-600 crores after transfers and expenses will the Board consider shifting plants.
→Investments are aligned to support growth with Toyota, Maruti Suzuki, and new business wins in electric vehicle components supplying to companies like BMW, Knorr-Bremse, Piaggio, and Suzuki two-wheelers.

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

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1Rico Auto Industries Ltd

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