Pricol Limited Q1 FY27 Call Transcript: Demerger, Financials & Growth Outlook
Pricol Limited reported Q1 FY27 consolidated revenue of ₹1083.58 crore, up 23.46% YoY, with PAT at ₹67.02 crore. The company is demerging its DIS and connected vehicles business for strategic flexibility. CAPEX is planned at ₹700 crore over 18-24 months. New capacities are being added, and key segments like Polymer and ACFMS are expected to drive future growth.
The demerger, significant CAPEX plans, and focus on new product development and capacity expansion indicate a medium-term strategic impact. However, near-term margin pressures and the lengthy demerger timeline temper the immediate impact.
The company reported revenue growth but highlighted headwinds affecting EBITDA margins due to rising costs and geopolitical factors. While strategic initiatives like demerger and capacity expansion are positive, the immediate impact on margins suggests a neutral sentiment.
Pricol Limited held its Q1 FY27 earnings conference call on July 31, 2026, where management discussed the company's financial performance, strategic initiatives, and future outlook.
On a consolidated basis, the company reported revenue from operations of ₹1083.58 crore, with an EBITDA of ₹123.69 crore (11.41% margin) and a profit after tax of ₹67.02 crore (6.19% PAT margin), resulting in an EPS of ₹5.50 per share. Revenue grew by 23.46% year-on-year, driven by industry growth and new product introductions. However, EBITDA growth was moderated to 21.42% due to headwinds from the West Asia crisis, leading to increased polymer prices, LPG, and freight costs, as well as minimum wage hikes. Management expects to recover these delayed earnings through indexation in the subsequent quarters.
The company is proceeding with a demerger of its driver information system (DIS) and connected vehicles business to enhance agility, attract investments, and secure technological partnerships. This move is intended to allow the business more flexibility in raising capital and collaborating with partners to maintain its competitive edge against multinational corporations, particularly as technological changes in the automotive sector accelerate.
Discussions also covered growth prospects across business verticals. The DICVS and ACFMS businesses both saw around 25% growth. In the two-wheeler segment of DIS, Pricol outperformed the industry with 28% growth compared to the industry's 23%. The Polymer business is expected to see muted growth in the short term due to capacity constraints but anticipates significant growth once new capacities come online within 9-12 months. Management aims for a deltas of 5% over market growth for DICVS and 10% over market growth for ACFMS.
Capital expenditure plans include a ₹700 crore CAPEX cycle over 18-24 months, with ₹400 crore allocated to the Polymer vertical for new capacity and ₹300 crore for DICVS (₹150-180 crore) and ACFMS (₹120 crore).
Regarding new product development, Pricol is focusing on self-healing plastics and fiber-reinforced plastics for its Polymer division. The company is also working on entering the passenger vehicle segment, engaging with Mahindra and exploring opportunities in exports. The disc brake and switches business is expected to contribute meaningfully from FY28 onwards.
The demerger process is estimated to take at least 4 quarters, potentially longer, but the divisions will operate as demerged entities internally from October 2026.
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