RACL Geartech Q1 FY27 Earnings Call Transcript Released

RACL Geartech Limited has released the transcript of its conference call held on August 25, 2026, to discuss the financial performance for the first quarter of FY 2026-27. The company, established in 1983, reported a consolidated turnover of ₹512 crore in FY 2025-26 and employs over 1200 people.

For Q1 FY 2026-27, RACL Geartech achieved a consolidated turnover of ₹132.60 crore, with exports contributing 64% (₹85.06 crore) and domestic business 31% (₹40.54 crore). On a standalone basis, the turnover was ₹127.82 crore.

Quarter-on-quarter, consolidated turnover grew by approximately 22%, with operating revenue increasing by 31.5%. EBITDA saw an 18% rise in absolute terms, and Profit Before Tax (PBT) grew by nearly 50%. Standalone PBT increased by approximately 48%.

The company was recognized as the 'Best Organization to Work 2026' by ET Edge, highlighting its people-centric culture and focus on leadership development. RACL Geartech also hosted its annual award ceremony at Jim Corbett.

Regarding capital expenditure, the company is replacing its entire heat treatment plant, with foundation work completed in January 2026. Building and construction are expected by October 2026, equipment installation and commissioning from October to December 2026, and trial production is planned for January 2027. This new plant will run on electric furnaces, moving away from LPG.

The company is also focusing on ESG initiatives, monitoring its carbon footprint. In Q1 FY 2026-27, Scope 1 emissions were around 750 tons, primarily from LPG for heat treatment, and Scope 2 emissions were about 321 tons, mainly from the Noida unit and corporate office. The Gajraula plant operates on 100% green energy.

In CSR activities, RACL Geartech continues to sponsor the education of over 400 children and has expanded its support to higher education for 14 students in FY 2026-27, focusing on fields like cloud computing, AI, and radiology.

During the Q&A, management confirmed that KTM has bounced back to pre-COVID levels and is expected to contribute positively to RACL's performance. New business opportunities are expected from KTM Austria. The company is also supplying to Royal Enfield for a 350 CC model, with commercial supplies starting from January of the current financial year, targeting around 7,500-8,000 sets per month. BMW supplies are slated to commence from October 2026, with final sign-off expected on October 24th.

Discussions also touched upon the ZF project, which is seeing renewed traction with a new SUV model, and the electric power steering segment for an American OEM, with commercial supplies expected from mid-2027 or end-2027. The company plans a total capex of ₹77.4 crore for the current year, with approximately ₹40 crore allocated to the heat treatment plant replacement and the remainder for additional capacity.

On diversification, RACL Geartech is exploring opportunities in aerospace for civil aviation and in actuators and micromotors, with a focus on the European market. The company is also seeing a trend of OEMs outsourcing component manufacturing, which presents growth opportunities.