Precision Camshafts Limited (PRECAM) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q1 FY '26-'27 Earnings Conference Call hosted by Precision Camshafts Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Shah, Whole-Time Director, Business Development. Please go ahead.

Thank you. Good afternoon, ladies and gentlemen. I'd like to thank you all for being a part of this Precision Camshafts Limited Q1 FY '27 Earnings Con Call. In case of any detailed questions related to finance, please e-mail us queries at cs@pclindia.in, and we shall provide responses within a reasonable time. We have also submitted our investor presentation for Q1 to the stock exchanges and the same is available on our website. Investors are requested to refer to this presentation for detailed financial and operational information. . I'm pleased to share that Precision Camshafts Limited has delivered a strong performance during the first quarter of FY '26-'27. We are encouraged by the momentum in the Indian passenger vehicle industry and the growth opportunities that are emerging for PCL. The Indian EV market has continued to demonstrate strong growth, and we are seeing this momentum reflected directly in our customer programs. Several new programs with our key customers including Mahindra, Tata Motors, Maruti Suzuki have started production during this quarter. These programs are an important milestone for us as they move from development and validation into commercial production. We expect volumes for these programs to progressively ramp up as our customers increase production. In addition to these programs that have already commenced, we have several other new programs in the pipeline with a number of them expected to commence production in the coming quarters. We have also secured new orders and continue to see strong engagement from our customers for upcoming vehicle platforms. Our customers are significantly investing in additional capacity, new vehicle programs and localization and we are investing ahead of these requirements, capacity automation and technology upgrades. The combination of new start-ups strong customer demand, new order wins and a healthy pipeline of upcoming programs gives us considerable confidence in the medium and long-term growth prospects of our stand-alone business at PCL. We remain focused on executing these programs, ensuring capacity readiness and deepen our relationship with our key customers. The company's total income stood at INR 173 crores registering a growth of 6.6% compared to the last quarter. The improvement in our performance was primarily driven by an increase in revenue from operations and the company's net profit stood at INR 14.88 crores compared to INR 13.2 crores in the previous quarter, representing a growth of 12.5%. We are happy to share these positive results despite the disruptions due to the Middle East war. Our subsidiary MEMCO recorded a revenue of INR 14 crores during Q1 and continues to focus on strengthening relationships with key customers like Bosch, Delphi, Endress+Hauser and a few others. Coming to our e-mobility subsidiary, EMOSS in the Netherlands, the business reported a revenue of INR 13.8 crores during the quarter compared to INR 29 crores in the previous quarter. We have seen a slowdown in the EMOSS business, and we are currently taking a cautious view on its future outlook. While electrification of European passenger cars continues to progress, the situation in the electric commercial vehicle space remains considerably more challenging. In the first half of 2026, electrically chargeable trucks only accounted for 4.8% of all new EU truck registrations. The European Automobile Manufacturers Association also continues to highlight insufficient enabling conditions and pullback of subsidies as a constraint on adoption. The broader economic -- the broader European automotive industry is also going through a period of significant restructuring with OEMs under pressure to improve competitiveness, reduce cost and rationalize investments. Against this backdrop, customer decision-making in the EV segment has become slower and program visibility has reduced. As a result, we remain cautious about the near-term outlook for EMOSS Europe. Our focus at this point is protecting the business and carefully managing costs and investments, and we will continue to evaluate the business based on customer traction, cash requirements and potential returns. Our e-mobility business in India with our electric heavy commercial vehicle platform continues to progress. We have developed the HCV platform and delivered the vehicle to a customer and the customer is still undergoing evaluation and field trials at this point. Looking ahead, we remain extremely confident about the long-term outlook for Precision Camshafts Limited, and we see a clear difference between the outlook within our different businesses. Our stand-alone Indian business is entering a period of significant opportunity, supported by strong growth in the Indian passenger vehicle market, increasing investments by our customers, several new orders already secured and a healthy pipeline of new programs. We are, therefore, continuing to invest in capacity, automation and technology to take advantage of this growth. At the same time, we take a cautious approach towards EMOSS given the slowdown that we have experienced and the uncertain outlook for the electric commercial vehicle market. We will remain disciplined on costs and capital allocation and not pursue growth for the sake of growth. Overall, our strategy remains clear, strengthen and scale our core Indian business, invest selectively in high conviction opportunities, execute our new programs and maintain financial and operational discipline across the group. Coming to the financial performance. For the stand-alone business, the total income increased by 6.6% quarter-on-quarter to INR 173 crores. EBITDA margin stood at 13% and PAT margin stood at 9%. The consolidated business decreased by 2.4% and was at INR 200.8 crores. EBITDA margin was about 10%. And profit after tax was about 4.2%. The group company revenues for quarter 1, as mentioned before, MEMCO stood at INR 14.1 crores and EMOSS at INR 13.8 crores. With this, I would like to wrap up my opening remarks and open the floor for question and answers. Thank you.

[Operator Instructions] Our first question comes from the line of Nishith Sanghvi with Neomile.

Yes. So I wanted to ask that will you only focus in Camshafts business or in any other segments also?

No, there are several new opportunities we are looking at. As I mentioned during the call that our focus right now remains on our Indian stand-alone business as well as our subsidiary, MEMCO, through which we are doing several new products. We are also actively looking at acquisition opportunities within India and that will be a way for us to grow into new products, new markets, new customers and so on. So it's not necessarily only camshafts, but we will focus on our India operations. That is for sure.

[Operator Instructions] The next question comes from the line of Navneet Kamalia an Individual Investor.

I'm an individual investor, invested in your company for quite some time. I just wanted to understand, wouldn't it be prudent to disclose the order book size at the end of the quarter or if not quarter, maybe end of the year, what is the outstanding order book size as of now? You explained about the multiple business opportunities. But currently, what is the outstanding order book size that we have? That is my first question.

Yes, Mr. Navneet. Actually, during our previous con calls as well as our AGM, we have disclosed this. I think a cumulative order book of approximately INR 1,500 crores is what we have over and above the existing businesses from existing as well as new customers. And this is, of course, not an annualized order book. This will be spread over 4 to 5 years, and that is what we can share at this point of time. And beyond this, we are still working on newer opportunities.