Precision Camshafts Ltd — Q3 FY26

Precision Camshafts Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=B0fvNWjNQNU Published: 2 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Q3 FI202526 earnings conference call hosted by 0:10 10 seconds Precision Camshot Limited. As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions 0:18 18 seconds after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on 0:27 27 seconds your touchstone phone. Please note that this conference is being recorded. 0:32 32 seconds And now the conference over Mr. Karan Sha, full-time director business development. Thank you and over to you Mr. Sha. 0:42 42 seconds Thank you. Good afternoon ladies and gentlemen. I'd like to thank you all for being a part of this precision cam shops Q3 FI26 earnings conference call. In 0:51 51 seconds case of any detailed questions related to finance, please email us your questions at cspclindia.in in and we'll provide you answers in a 0:59 59 seconds reasonable time. We've submitted our investors presentation for Q3 FI26 to the stock exchanges on 5th of March and the same is available on our website. 1:09 1 minute, 9 seconds Investors are requested to refer to the same. 1:13 1 minute, 13 seconds I'm happy to share that precision capture limited has reported in net profit of 5.9.58 crores for this quarter in comparison to 1:21 1 minute, 21 seconds a deficit of 42 crores in the previous quarter and a profit of 5 crores in the corresponding quarter ended December 1:29 1 minute, 29 seconds 31st 2025 2024 sorry the financial performance for the quarter was primarily driven by an increase in 1:36 1 minute, 36 seconds revenue of 2.44 44 crores and a rise of other income of 80 lakhs compared to the previous quarter. These gains were 1:44 1 minute, 44 seconds partially offset by higher payroll costs attributed to the revisions in the wage code that led to an increase in gratuitity and leave and cashment 1:52 1 minute, 52 seconds expenses. Additionally, other operating expenses were higher compared to the preceding quarter. Overall, the performance and operations of the 1:59 1 minute, 59 seconds company during the quarter have remained stable. 2:02 2 minutes, 2 seconds The Indian market continues to grow and be resilient to global slowdown. In these difficult global times, PCL posted 2:09 2 minutes, 9 seconds a standalone revenue of 153 crores with Eida margin of 14%. And the stability comes from the increased demand from the 2:16 2 minutes, 16 seconds 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 2:24 2 minutes, 24 seconds PCL has been awarded several new businesses in the last year which will extend our order book till 2032. 2:31 2 minutes, 31 seconds PCL has been awarded new business from key customers. All of the below that I will explain are over and above the 2:39 2 minutes, 39 seconds running business that we have at PCL. At this point, we have received new order from Marauti Suzuki for three-cylinder engine cam shafts with an approximate 2:47 2 minutes, 47 seconds volume of 12 lakh 40,000 cam shafts per year in fast condition starting in 2027. 2:54 2 minutes, 54 seconds We've received business from tier 1 of Hyundai India for supplies to their new Pune plant with approximate volume of 280,000 cam shafts in past condition starting in 2026. 3:06 3 minutes, 6 seconds We have received business from Mahindra for their existing running engines as a resourcing of approximately 600,000 cam 3:14 3 minutes, 14 seconds shafts per year in fully machined condition starting in FI2627 and the peak volume would be in FI2728. 3:23 3 minutes, 23 seconds We have received business from Usuzbekistan Auto for their running engines with an approximate volume of 120,000 cam shafts per year in fully machined condition starting in FI2627. 3:34 3 minutes, 34 seconds And with Tata Motors, we have benefited from the increase in volumes and increase in share of business by getting 3:42 3 minutes, 42 seconds approximately 280,000 cam shafts per month uh per year in fully machined condition starting in FI2627 itself. In 3:51 3 minutes, 51 seconds addition, we have got new business uh from Renault Nissan India with volume increase of 120,000 machine cam shafts per year again starting in FI2627. 4:02 4 minutes, 2 seconds Besides this, we see extension of business beyond what was originally planned for Toyota India as well as for 4:09 4 minutes, 9 seconds General Motors in Brazil uh which the volumes would go to 2030 and beyond. Of course, I'm sharing all of these in all 4:18 4 minutes, 18 seconds of this information uh subject to market conditions in the future, but we are happy to share that these new orders 4:25 4 minutes, 25 seconds 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. 4:36 4 minutes, 36 seconds This significant addition to our order book provides greater revenue visibility and reflects the continued confidence that our 4:44 4 minutes, 44 seconds customers place in PCL's capabilities, quality and long-term partnership approach. With these programs now moving 4:52 4 minutes, 52 seconds firmly in the execution phase, they represent a milestone in PCL's growth journey. Our teams are fully engaged to 5:00 5 minutes ensure a smooth and timely ramp up. And at the same time, our management continues to actively pursue new opportunities in Europe and North 5:08 5 minutes, 8 seconds America, where we see encouraging traction from existing and new customers. 5:14 5 minutes, 14 seconds This ongoing engagement gives us confidence that our global business pipeline will continue to strengthen in the coming years. 5:21 5 minutes, 21 seconds To support these new programs, PCR is investing approximately 120 crores towards capacity enhancement and 5:28 5 minutes, 28 seconds advanced manufacturing capabilities. A key part of this investment is development of a state-of-the-art manufacturing facility at our new 5:35 5 minutes, 35 seconds location in Solapur. Designed to meet global standards in efficiency, quality and scalability. The plant 5:42 5 minutes, 42 seconds infrastructure is already completed and installation of machinery is progressing well and will be completed in this calendar year. Once fully operational, 5:50 5 minutes, 50 seconds the Solar Grid facility will significantly enhance our production capabilities and position PCL to efficiently serve both current commitments and future growth 5:59 5 minutes, 59 seconds opportunities, strengthening our position as a reliable global manufacturing partner. 6:05 6 minutes, 5 seconds We recognize that the industry's transition towards electrification is critical long-term consideration and our strategy to address this is to 6:14 6 minutes, 14 seconds continuously assess the ICE demand which continues to grow in India and globally diversification into adjacent precision 6:22 6 minutes, 22 seconds engineered components and evaluation of opportunities aligned with these evolving technologies. 6:29 6 minutes, 29 seconds Further, I would like to inform investors that the second branch of our solar power plant located in Mangala, Solapur with a capacity of 14 megawatt 6:38 6 minutes, 38 seconds was commissioned in the month of December 2025. And with this addition, the total solar plant now has a total capacity of 29 megawatt. 6:47 6 minutes, 47 seconds The enhanced capacity is expected to assist the company in reducing its dependency on non-renewable energy sources, resulting in lower power cost 6:55 6 minutes, 55 seconds and a reduction in the company's carbon footprint. 6:58 6 minutes, 58 seconds Now coming to our subsidiary MECO uh it reported a net loss of 45 lakhs in the quarter ended uh compared to a net profit of 1.5 lakhs in the previous 7:07 7 minutes, 7 seconds quarter. This was mainly due to a loss of sale of approximately 2.8 crores in Q3. 7:15 7 minutes, 15 seconds Our e-mobility subsidiary EMOS in the Netherlands reported a loss of4 crores during the quarter as compared to a net 7:23 7 minutes, 23 seconds loss of4 crores also in the previous quarter and the total revenue earned was 24 crores as compared to 22 crores in the quarter before. 7:33 7 minutes, 33 seconds 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. 7:44 7 minutes, 44 seconds However, market conditions are evolving and we will keep investors updated of the same. 7:51 7 minutes, 51 seconds Turning to our e-mobility business in India, I would like to inform shareholders that BCL has slowed down its TATA conversion business due to changes in regulations and not enough visibility as previously mentioned. 8:02 8 minutes, 2 seconds However, the development of the electric heavy commercial vehicle continues and we hope to deliver the vehicles to customers in very very soon. 8:12 8 minutes, 12 seconds Coming to the financial performance of the companies, the standalone business grew by 2.17% quarteron quarter to 153 8:20 8 minutes, 20 seconds crores and EITA margin was at 14% whereas PAT margin was at 6.2. 8:26 8 minutes, 26 seconds The consolidated business decreased by 9% quarteron quarter to 188 crores and the EIDA margin was 12.5% and PAT was 4.89. 8:37 8 minutes, 37 seconds Menco posted a revenue of 11.82 82 crores and EMOS posted a revenue of 23.95 crores in the last quarter. 8:46 8 minutes, 46 seconds With this I would like to end my address and like to open the floor for question and answers. Thank you very much. 8:53 8 minutes, 53 seconds Thank you very much. We will now begin with the question and answer session. 8:58 8 minutes, 58 seconds Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question, you may press star. 9:08 9 minutes, 8 seconds Participants are requested to use handsets while asking the question. 9:14 9 minutes, 14 seconds Ladies and gentlemen, we will wait for a moment while the question QS. 9:22 9 minutes, 22 seconds Participants, you may press star and one to ask a question. 9:34 9 minutes, 34 seconds The first question is from the line of Gautam Rajes from Everflow Partners. Please go ahead. 9:41 9 minutes, 41 seconds Hi sir, thank you for the opportunity. 9:45 9 minutes, 45 seconds Uh my question was on the update or the status of the EV business uh in the Indian EV business. uh with regards to 9:54 9 minutes, 54 seconds our strategy and how are we going forward and currently where we are if you can give us more details on the 10:01 10 minutes, 1 second current position and where we plan or strategize to go in the future for the Indian EV business that' be great. 10:08 10 minutes, 8 seconds Sure thank you. Um the EV business globally has slowed down quite a bit in the last two to three years and uh we 10:15 10 minutes, 15 seconds see this very clearly from all our OEM customers uh whether in India or globally uh where there is been a nearly 10:23 10 minutes, 23 seconds reversal of strategy from going all electric to now looking at ice and hybrid powertrains for the long-term future. Uh this in one way is very good 10:32 10 minutes, 32 seconds for the parent business uh and continues the growth of the camshaft business. uh but it has had a slowdown on the EV business whether it is in Europe or in 10:41 10 minutes, 41 seconds India and I think the European business is uh stable at this point of time but with changing market conditions it's 10:48 10 minutes, 48 seconds hard to say at this point uh how much growth is expected in the coming quarters or years but that uh we will update shortly as we know uh in terms of 10:57 10 minutes, 57 seconds India uh we expected quite a lot of opportunity in the data ace conversion uh business but that has not rectified 11:04 11 minutes, 4 seconds uh due to uh recent changes and regulations uh number one and also all the complications in the uh ecosystem 11:12 11 minutes, 12 seconds like le registration, insurance, financing, service, infrastructure etc. 11:16 11 minutes, 16 seconds So right now our focus is on the HCV market where we are electrifying a heavy commercial vehicle for a customer and uh 11:23 11 minutes, 23 seconds we'll be going in will be uh delivered to the customer in the coming month and uh from there we look at a strong order 11:32 11 minutes, 32 seconds book uh but this is again subject to uh the successful testing of the vehicle to start with and a certain regulatory uh 11:40 11 minutes, 40 seconds environment that we need to overcome in the coming uh months to to ensure that we have a good product. That's that's kind of where we are. 11:50 11 minutes, 50 seconds Uh just to follow up being a kata based business have we completely stopped it because of regulatory issues 11:57 11 minutes, 57 seconds registration and the infrastructure along with that and regarding the HTV are we delivering it to a client or is the testing going to happen in a few 12:05 12 minutes, 5 seconds months and would that be in Q4 or uh Q1 or sorry 27 and post that only when we have an order book or do we already have 12:13 12 minutes, 13 seconds an order book and can you tell me about the regulatory this thing that we having? 12:18 12 minutes, 18 seconds No. So the data is nearly um stopped uh because of all the challenges that I mentioned before. Uh again also it's a 12:26 12 minutes, 26 seconds razor thin margin kind of product. So it it it was very difficult to scale up uh in the order that we in the fashion that 12:33 12 minutes, 33 seconds we wanted to. Uh number two on the HCV we are working directly with a customer for this vehicle. It is not something that we are developing and testing and 12:42 12 minutes, 42 seconds hoping to get a order. It is for a customer and we have a LOI in place for certain volumes uh that we expect from 12:49 12 minutes, 49 seconds one customer. Of course, we will expand it beyond this one customer uh going forward. Uh but yeah, the vehicle will be delivered to the customer in the next month and not our internal testing. 13:02 13 minutes, 2 seconds If it's being delivered, what are the regulatory uh you had mentioned some regulatory requirements? Yeah, we have to go through certification and homologation which is uh which is that'll be before the delivery right? 13:13 13 minutes, 13 seconds No, this is this is we will do this in parallel because uh we we are testing the vehicle as well as certifying it uh 13:20 13 minutes, 20 seconds parallelly. So uh is that for commercial use or not just for that customer like how can you sell it to the customer without 13:28 13 minutes, 28 seconds certifying or testing it then? It's it's it will of course be for testing purposes only, right? To start with to the to the customers but in their in their use case. Yeah. 13:38 13 minutes, 38 seconds All right. All right. Thank you so much. Thank you. 13:42 13 minutes, 42 seconds Thank you participants. You may press star and one to ask a question. 13:50 13 minutes, 50 seconds Next question is from the line of Pritika from Neo Asset Management. Please go ahead. 13:56 13 minutes, 56 seconds Hi, could you let us know the sustainability of demand over the next two to three years and uh does the 14:04 14 minutes, 4 seconds company see any slowdown signals from the OEMs? 14:10 14 minutes, 10 seconds Uh thank you for the question. I think as I mentioned during the opening remarks uh we have received several new orders from customers be it in India or 14:18 14 minutes, 18 seconds globally and we actually see an increase in business in the next uh two to three years compared to where we are today uh 14:25 14 minutes, 25 seconds for which we have done uh the capex in in the plant as well as the uh machining lines. So we actually see an increase in 14:33 14 minutes, 33 seconds business in the in the medium term and in the long term. Uh so that's we we don't see any decline or any slowdown uh 14:42 14 minutes, 42 seconds at this point of time at least from our current customers. Uh beyond our current customers, we are also engaged with new customers to look at new products and new uh camshaft business as well. 14:54 14 minutes, 54 seconds Okay. Okay. All right. And my other question is uh could you provide us a closer look on the business performance of uh MECO and EMOS? 15:05 15 minutes, 5 seconds Yeah, Meco uh the company is uh small. 15:08 15 minutes, 8 seconds It's about five or 6% of the total group revenue. It is stable, self-sufficient, self-funded. Uh 15:16 15 minutes, 16 seconds it's about 50 55 crores in turnover and has a a profitability of around 13 14% AIDA margins and continues to be stable. 15:24 15 minutes, 24 seconds We have a uh target and a road map to reach about 100 crores in the next two years and we are actively working with customers to uh achieve that target. So 15:32 15 minutes, 32 seconds that's on me. uh on EMOS like I mentioned in the previous uh comments the uh the European side of business is 15:41 15 minutes, 41 seconds stable but again subject to lot of market conditions geopolitical changes happening in the area uh push back on EV 15:48 15 minutes, 48 seconds that is happening very clearly and so on. Uh and on the India side of things we are developing this uh electric HCB which will be in the market uh in the next uh year. 16:01 16 minutes, 1 second Okay. Okay. Thank you. Thank you. 16:05 16 minutes, 5 seconds Thank you participants. You may press star and one to ask a question. 16:15 16 minutes, 15 seconds Next question is from line of Kalpesha, an individual investor. Please go ahead. 16:23 16 minutes, 23 seconds Uh hi sir. uh can you please share whether the company is actively evaluating any acquisitions or maybe strategic partnerships or 16:31 16 minutes, 31 seconds diversification opportunities in order to strengthen its product portfolio geographic presence. 16:38 16 minutes, 38 seconds Yeah, absolutely. Thank you for the question. We are very actively looking at uh opportunities. Um uh but these will be necessarily in India. We are not 16:46 16 minutes, 46 seconds looking at uh the European or American market for these type of opportunities. 16:50 16 minutes, 50 seconds And we are actively looking in the Indian market where there is uh growth uh in the automotive as well as non-automotive sector including 16:58 16 minutes, 58 seconds uh agriculture, non-auto, industrial and defense. Uh and we are looking at all opportunities which will basically be 17:06 17 minutes, 6 seconds adjacent to our expertise which is casting, machining, forging and assembly. So that's that's the area we are looking at. 17:14 17 minutes, 14 seconds Okay, understood. And any specific reasons as to why not the international markets? 17:19 17 minutes, 19 seconds I think that the examples have been very clear in the last few years where the international markets are actually not 17:27 17 minutes, 27 seconds growing at all. In fact, there is degrowth in these markets. Uh uh companies that are available uh for sale are under tremendous financial distress 17:36 17 minutes, 36 seconds and that's not something that we would like to take on board. We would rather uh look at a market which is growing which is and more importantly in our 17:44 17 minutes, 44 seconds control and has a cultural fit to what we do as well. So that's the reason why we look at India very bullishly right now. 17:52 17 minutes, 52 seconds Understood sir. Thank you so much. Thank you. 17:56 17 minutes, 56 seconds Thank you ladies and gentlemen. You may press star and one to answer question. 18:08 18 minutes, 8 seconds Next question is from board mode from investor plus. Please go ahead. 18:14 18 minutes, 14 seconds Hi sir. Uh sir as you had mentioned in the previous conference call and also mentioned in this one about the 18:21 18 minutes, 21 seconds expansion plans to Europe and North America. So uh sir can you please uh throw some colors on how would that 18:28 18 minutes, 28 seconds affect on our domestic versus export revenue and also what would be our cam shaft versus EV composition in those areas. 18:39 18 minutes, 39 seconds Okay, thank you. Uh look the the the comment related to expansion in Europe and North America is purely related to our cam shaft business and machine 18:47 18 minutes, 47 seconds components business. It is not related to the EV business. Uh EV business I think I have been uh quite clear in what we are doing in India and what we are 18:54 18 minutes, 54 seconds doing in Europe. Um we are engaged with several customers in North America, South America, in Europe and other 19:01 19 minutes, 1 second geographies where we're looking for uh new business opportunities for cam shafts and other niche machined products or niche cast products for which we are 19:10 19 minutes, 10 seconds in touch with several uh customers. We also have representation in these areas um from PCL side which are actively 19:18 19 minutes, 18 seconds working on these uh areas as well and we see good opportunities there because um these these uh geographies are becoming 19:27 19 minutes, 27 seconds increasingly uh difficult to operate businesses increasingly more um uh costly uh in terms of energy cost, power costs and uh and labor costs and so on. 19:38 19 minutes, 38 seconds uh which makes India a very good alternative uh in terms of uh sourcing of such critical components and that's where we we see that we can use our 19:46 19 minutes, 46 seconds experience our our uh connect with the industry and so on to grow the business more uh at this point of time India and 19:55 19 minutes, 55 seconds uh export is about 50/50 uh we see it remaining like that actually uh not because we don't want to grow the foreign uh over export market but 20:03 20 minutes, 3 seconds because the Indian market is one which is growing in double digits nearly And we are of course participating in that group. 20:12 20 minutes, 12 seconds Yeah. Got it sir. Thank you. Thank you. 20:19 20 minutes, 19 seconds Thank you participants. 20:22 20 minutes, 22 seconds You may press star one to ask a question. 20:33 20 minutes, 33 seconds Ladies and gentlemen, you may press star and one to ask the question. 20:46 20 minutes, 46 seconds As there are no further questions, I'll now hand the conference over to Mr. Karan Sha for closing comments. 20:52 20 minutes, 52 seconds Uh thank you so much uh all for participating in our um earnings conference call for Q3 FI26. I hope I've 20:59 20 minutes, 59 seconds been able to answer most of your queries and we look forward to your participation in the next quarter. Thank you very much. 21:08 21 minutes, 8 seconds Thank you very much. On behalf of Prussian Cam Shaft Limited, that concludes this conference. Thank you for joining us and you may now disconnect the line. Thank you.