Rico Auto Industries
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Rico Auto Industries is navigating a transformative phase, with management projecting revenue exceeding INR 3,250 crores for FY27, driven by the ramp-up of 54 new programs with global OEMs and a strategic pivot towards hybrid and electric vehicle components. Despite facing margin pressures due to elevated logistics and raw material costs, management anticipates a recovery in margins from Q3 as operational efficiencies improve and customer price adjustments take effect. The company's recent acquisition of orders valued at INR 2,500 million and the commissioning of the new Hosur facility further bolster its growth trajectory. Vista's financial outlook reflects an expectation of accelerating revenue growth, although margins are likely to remain under pressure in the near term. The auto ancillaries sector is experiencing a sunrise phase, with improving pricing power and strong demand for EV components, which aligns with Rico's strategic focus. However, headwinds such as global semiconductor supply chain complexities and geopolitical risks warrant caution. Over the next 12-24 months, key opportunities include expanding into defense and railway sectors, while watchpoints include commodity price volatility and the execution of high-margin programs
Why We Like This Stock
- Management's confident revenue projection exceeding INR 3,250 crores for FY27, supported by a robust order book
- Strategic pivot towards hybrid and electric vehicle components, aligning with industry trends and government support
- Operational efficiencies and the commissioning of the new Hosur facility expected to enhance capacity and profitability
Things To Watch Out For
- Ongoing margin pressures due to elevated logistics and raw material costs, impacting short-term profitability
- Exposure to global semiconductor supply chain complexities, which could hinder production and delivery timelines
- Geopolitical risks and commodity price volatility that may affect overall operational stability and margins
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 2,160 | 2,212 | 2,478 | 2,893 | 3,192 |
| Profit Before Tax (Cr.) | 60 | 51 | 77 | 59 | 74 |
| PBT Margin | 2.8% | 2.3% | 3.1% | 2.0% | 2.3% |
| Net Profit (Cr.) | 46 | 38 | 61 | 47 | 57 |
| Earnings Per Share | 3.3 | 2.8 | 4.4 | 3.3 | 4.2 |
Analyst Recommendations
No analyst recommendations available.
Company Overview
Show Company Profile
Rico Auto Industries Limited, an engineering company, manufactures and supplies high precision fully machined aluminum, and ferrous components and assemblies to original equipment manufacturers for automotive, powertrain technologies including hybrid vehicles, electric vehicles (EVs), and internal combustion engines (ICEs) internationally. Its integrated services include design, development, tooling, casting, machining, and assembly of aluminum and ferrous products. The company offers oil pump assemblies, fuel system parts, lube oil filter heads, exhaust manifolds, turbine housings, center housings, backplates, crankcases and covers, cylinder head covers, oil pans, intake manifold covers, front covers, valve covers, side covers, balance shaft assemblies, gear housings, and main bearing caps, as well as water, air connections, and pressure plates. In addition, it provides flywheels, timing cases, oil filter adaptors, engine brackets, cylinder blocks, cylinder heads, clutch assemblies, automatic transmission bracket assemblies, differential case housings, gear shift forks, wheel hub assemblies, brake panel assemblies, brake discs, and drums. Further, the company offers tank track shoe, fuze body, and fuze assembly products, and aluminum alloy wheels, as well as engineering and assembly logistics management, warehousing, just-in-time delivery, and customer support and services. Rico Auto Industries Limited was incorporated in 1983 and is based in Gurugram, India.