Ppap Automotive Limited (NSE: PPAP) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Abhishek Jain — Managing Director & Chief Executive Officer
Sachin Jain — Chief Financial Officer
Analysts:
Unidentified Participant
Jigar Shah — Analyst
Rajeev Saraf — Analyst
Raju ESha — Analyst
Pooja Mehta — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the PPAP Automotive Limited earnings call for Q1FY26. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing 0 on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Jain, Managing Director and CEO of PPAP Automotive Limited. Thank you. And over to you sir.
Abhishek Jain — Managing Director & Chief Executive Officer
Yeah. Thank you very much. A very good morning to everyone. I extend a very warm welcome to. All the participants joining us on this call. I am also joined today by Mr. Sachin Jain, the CFO of the company along with our investor Relations advisors, Strategic Growth Advisors. I hope all of you have had a chance to look at our results and investor presentation which are available on. The stock exchanges as well as on our website. I would like to start today with the industry highlights. India’s automobile industry registered an overall sales. Decline of 5.1% in quarter one of. Financial year 26 passenger vehicle volume fell by 1.4% year on year and two.
Wheeler sales contracted by 6.2% while three wheelers edged up by 0.1%. Commercial vehicle sales were marginally down 5.6%. Looking ahead, SIAM maintains a cautiously optimistic. Outlook for Q2 supported by expectations of a normal monsoon festive season demand and accommodative monetary policy. However, supply constraints on rare earth magnets. From China remain a key risk factor. To monitor for the sector. Now let me take you through the operational highlights for our company during quarter one. We began the financial year on a. Strong strategic footing by securing lifetime orders worth rupees 86 crores including 11 crores from EV programs. These wins underscore the continued trust of our OEM partners and our growing traction in the EV space.
With these additions, our lifetime order book now stands at 3439 crores, providing healthy revenue visibility. The newly secured orders will be executed. Over the next three to five years. That said, quarter one is typically a seasonally soft quarter for us. Consolidated revenue from operations declined by 4.9%. Year on year to 116.6 crores, primarily. On account of subdued demand and deferment. Of project launches by key OEMs. Capacity utilization in the parts business stood. At 62% reflecting lower volumes and irregular. Order inflows from major customers. Despite these near term challenges, we expect. A gradual recovery from Q2 supported by improved execution and ramp up of recently. Secured orders as well as new models. We are optimistic that we are on. Track to deliver our stated guidance for financial year 26.
Automotive parts business remains our primary growth engine with a strategic focus on enhancing. Content per vehicle, introducing higher value added. Products and expanding our customer base. We continue to engage for new business. Opportunities with all the OEM manufacturers underscoring our deep rooted relationships and robust presence. Across both ICE and EV segments in our aftermarket business under Elpis, we maintained. A healthy momentum with 1,275 SKUs supported. By both offline and online sales channels.
The revenues from this business increased by. 27% year on year in quarter one. Our focus remains on expanding the domestic. Network and growing exports, targeting 10% revenue share overall by financial year 27. Our commercial tool room business under Meraki Precision Tool Engineering is on track with a strong order pipeline across automotive and non automotive customers supported by capacity enhancing. Plans to 150moles per year. The order book showed a healthy increase. Of 30% year on year in quarter one. Our industrial product division business is being. Rebranded as Avenia Industrial Products.
The focus continues in leveraging our plastic and rubber extrusion capabilities as well as plastic injection molding capabilities for diversified industrial applications. The sales were almost similar to the same quarter last year. However this year this division should be. Twice should do twice as much as. Business done last year. Our battery business under Avenia Batteries continues. To advance its repositioning towards storage solutions. Following the strategic shift from mobility applications last year. While market adoption remains gradual, the division. Is making steady operational progress, engaging with. Marquee customers and laying the groundwork for. Scaling in the upcoming quarters. We remain confident that our new business initiatives will gain strong traction this year. Helping to de risk our portfolio from sector specific fluctuations. We are energized about the opportunities ahead and look forward to delivering a successful year. Thank you very much for your time and engagement. We can now open the session for questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a Question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Jigar Shah from Elephant. Please go ahead.
Jigar Shah
Good morning sir. So sir, a couple of questions from my side. So were there any supply chain challenges faced during the quarter? And also the subdued margins was were mainly due to lower capacity utilization or higher material costs. And additionally, how do you view the stability of raw material prices in coming quarters?
Abhishek Jain
Yeah, thank you very much for your question. There were no supply chain challenges during this quarter. From our side things have been quite smooth. Raw material prices have been stable and. They are getting on the lower side as well. We are improving our rejections and all. So material utilization percentage is also getting better. The margins that you see here are primarily because of lower capacity utilization and lower sales. If you look at the profile margin. The profile is getting better operationally but. Only because of drop in sales. The bottom line is subdued.
Jigar Shah
Okay. Understood sir. So secondly with Q1 starting on a lighter note. So what gives us confidence of achieving 600 crores revenue guidance for FY26?
Abhishek Jain
Like I said Q1 general typically is. The. Slowest quarter for us. And we already are sitting on 11th of August today. And whatever sales we have seen in July and August and not only from the automotive side but from the all the business side I think we are. On track to achieve that guidance. One more important factor is that for the there were a couple of new models that production was supposed to start in this quarter. One which has gotten delayed, which is. Delayed by the customer, not by us. We are ready for it. So as soon as these models start picking up their committed volume and the time when it’s supposed to start we will be. We will again come on track for the guidance.
Jigar Shah
Understood sir. Understood. Thank you. Thank you. That’s all from my side.
operator
Thank you. A reminder to the participants, please press star and one to ask a question. The next question is from the line of Rajiv Saraf from Saraf Broking. Please go ahead.
Rajeev Saraf
Hello. Am I audible?
operator
Yes sir.
Rajeev Saraf
Yes sir. Given the current demand environment how do you see the domestic auto sector performing over the next two quarters in terms of volumes, new model launches and customer offtake? And how does this outlook support your confidence in achieving the FY26 revenue and margin guidance?
Abhishek Jain
Yeah, thank you very much Rajiv ji for that question. As I said in my opening address, I think there are a little bit. Of challenges for the entire automotive industry for overall growth. For this year. I think it’s quite a challenging environment. And we have to wait for how. Things will pan out from the demand perspective. Your second part was about the new launches and all that. So like I’ve been saying in all the previous conferences as well, we are closely mon. Closely monitoring the trends which are following the industry. And as you know, SUVs are getting very popular. Tata and Mahindra are gaining market share. And EVs also are going to play. An important role in the coming future. So our strategy of getting new business. Is completely aligned with all these market trends. Unfortunately some projects have gotten delayed. They were either the customer was not able to make that many cars when it comes to EVs because of all. These rare earth problems and approvals which. Are, which are happening now. And some projects which were supposed to start SUV for the ice part they. Have gotten delayed by 3 months which. Are supposed to start somewhere around end of quarter two. So all these things put together, I think we are on the right footing. Whatever best we can do, we are. Doing getting all the business based on. The latest market trends.
Rajeev Saraf
Okay, one more follow up question. So margins came under pressure this quarter alongside weaker top line performance. How should we look at margins trending in the coming quarters?
Sachin Jain
Well, I, as I said.
Abhishek Jain
Yeah. Sachinji, you want to take that?
Sachin Jain
Yeah, yeah. So on the margin side if you see our margin is primarily dropped due to the subdued sales as we are quite positive for the rest of nine months that we will able to achieve the sales which we have planned for the rest of the quarter. So definitely we are again back into the double digit margin side on the standalone basis. Also on the consolidated basis.
Rajeev Saraf
Okay. Yeah, that’s it. From my side. Thank you sir.
operator
Thank you. A reminder to the participants, please press star and one to ask a question. The next question is from the line of Rajvi Shah from Bright Securities. Please go ahead.
Raju ESha
Hi sir. Thank you for the opportunity. I just had few questions. The first one is could you share the segment wise breakup of the order book along with the anticipated revenue conversion around the next four to five years. Hello.
Sachin Jain
Yeah. Yes. Yes. So you are asking about the segment wise order book breaker.
Raju ESha
Yes, sir.
Sachin Jain
Hello. Yeah.
Raju ESha
Yes sir.
Sachin Jain
Yeah. In the con call itself we have informed that from the automotive side we have the order book of 3439 crore. So it is to be executed across three to five years based on the model life and beyond that the tooling side we have the order book of as of now around 30 crores. So that is to be executed over one and a half years. And we will also keep adding more orders in the rest of the ninth month. If you talk about aftermarket. So after market side it is based you see it is more a we sell to the dealer in that segment.
So you have the recurring order in that segment. So we have also grown by around 47% in the the quarter one itself.
Raju ESha
Okay. And okay. And additionally sir, who are the three top customers and what proportion of the order book would they represent?
Sachin Jain
So again currently our top three customer is Maruti along with smg. And now Tata is our again the second biggest customer and the third is currently is Honda. And if you talk about the order book, so order book side also it is in the same way because currently Maruti hold up 50 more than 50% share in the car industry and we are in the all the models which are coming going to be come up in next three to four years for which RFQ has been floated or LOA has been issued. So his order book is also like that only.
Raju ESha
Okay, sir. And sir, my next question was like in Q1 consolidated revenue declined by 5% y o y and the capacity utilization in the automotive part business to that roughly 62%. So could you elaborate on the key factors driving this softness?
Sachin Jain
So majorly because of the subdued demand from the customer side and shifting of the certain SOP which were due in the Q1 itself.
Raju ESha
Okay.
Sachin Jain
That resulted to the lower capacity of flychain portal.
Raju ESha
Okay. And also what is your near term visibility on order schedules and production volumes and how do you expect capacity utilization to trend in the coming quarters.
Sachin Jain
For the automotive side?
Raju ESha
Yes, sir.
Sachin Jain
Yeah. So as already suggested by Mr. In the previous call also so we are There are certain SOPs also due in the Q2 and which were shifted in the Q2 which were due initially in the Q1 and the based on the current order book in our hands. So there would be definitely uptick in our capacity utilization also in Q2 and Q3 and Q4 based on that.
Raju ESha
Okay. Okay, understood. That was helpful. Thank you.
operator
Thank you. The next question is from the line of Naveen Saraugi, an individual investor. Please go ahead.
Unidentified Participant
Yeah, thank you very much for this opportunity. Sir. We I have two questions for two different segments. One is about your, you know, battery segment. So going by your presentation I understand you know there is a. We are expecting some turnaround in this year and you know, and there is an improvement of margin as well in battery segment. So how in, I mean to say is this turnaround is very much intact in this year or this can be deferred considering you know, the kind of concerns you have just said that you know this year will be very challenging and all that.
Abhishek Jain
Challenge automotive industry battery business. We are basically doing energy storage solution. That has nothing to do with mobility segment. That said turnaround that is very much. Happening now what we’ve done is earlier. We were engaging with lot of different. Customers, getting small, small trial orders from. Them and keeping ourselves very busy in. Developing products and then very low volume of business happening. When we pivoted this whole thing from mobility to storage solution. Now we’ve also pivoted key. We’re not going to get to do. Business with lot of customers. We are keeping a very tight focus on our customer base. 5, 6 customers are there promising customers. Which are big players in the industry. And we are continuously engaging with them and we’ve had positive feedback from them. This month I think will be very crucial for this battery business. This month we should be able to. Sign a few contracts which will put this battery business on path to recovery and hopefully this year we should come out of the concerns for this business.
Unidentified Participant
Great to hear this and I understand you know this BS segment is very budget vertical currently in automotive business. Just one thing, do we have any ambitious target? Nice. You know, if we are, you know, expecting that there is a turnaround in this year. So you know how we position ourselves down the line. Let’s say you know, two, three, two year, five year, you know, if someone is taking a very long term bet on, you know, your company and you know, particular to this segment, the battery energy storage sector segment. So what is our, you know, at least our vision for this vertical for the next four, five years?
Abhishek Jain
Because this, this vertical has been in pain for last two, three years. So we are not setting ourselves a. Target till the time we have recovery in this business and we become at. Least zero loss making division. So right now we’re not setting a target for ourselves. What to do? First we have to make sure that. This business becomes stable and is not detrimental to the financial interests of the company. After that, once we have confidence in this business, then we’ll take a call about what has to be done on. The long term basis. Right now we’re not planning to do any investment in this, in this company, whatever investments are already done. We want to make sure that they are utilized to the maximum first and then look at the business and then start thinking about investments as of now, there is no target for us on. Long term basis, whatever capacity we have.
operator
Sorry to interrupt you already. Mr. Naveen, can you please mute yourself. But there is a background voice from your side. Yes sir. Now you can speak.
Abhishek Jain
So we’re not planning to do any. Capital investment or something in this business right now. Whatever investments have been done, we want. To utilize those investments first and then. Stabilize and then think about expanding.
Unidentified Participant
Yeah, fair enough. And one more thing about you know our aftermarket segment np. So see there are two channels you know, PPAP is using. One is through you know, OEM rule, right where you know we are sending after send products to directly, you know the original equipment manufacturer. The another approach is, you know, online approach where we have our own platform NP along with Amazon, Flipkart etc. Right. So do we have any. I think this, this segment is also kind of stagnant. If I see, you know, last three, four quarters number, you know, going by your presentation. So do, do we have any panel of you know making some expenditure on promotion and activity or you know, some kind of sales expenditure to expand or you know to increase our access into this online segment.
Abhishek Jain
See the segments which you are talking about. First of all this aftermarket division of. Ours, they focus on three different kind of products. One is body parts, one is body. Parts and spare parts. Second is consumables and third is accessories. So all three of them have different product range which are different from the OEM customers. We make our tools and everything by ourselves and we supply to the aftermarket online sales channel is basically used for the accessories part and we do lot. Of digital marketing and Google Ads. Everything we are doing to promote sales over there. The first two segments, the body parts and the consumables, this is basically an. Offline channel in which we have a system of distributors across the country today. Also we have around 150 active distributors and we continuously engage with them. Just last month we did our distributor. Meet wherein we called the top 35 distributors to Delhi and we showed them the facilities of all the manufacturing facilities here in north and then we engage. With them about what is the vision for this company, what is their concern. And how we should work together as. Partners in the business instead of having. A short term relationship. So a lot of things are happening there as well. And this in the quarter one compared. To the previous year we’ve already grown. This business by 27%. So every year there is growth happening and we are quite, quite positive about it. Now we already have a team of around 40 people. Including the people, the sales people on the ground and on the office to organize and in the warehouse to manage the operations and all. And we are planning to increase those numbers by around 60 people by the. End of this year. So gradually we are increasing our power for this business.
Unidentified Participant
Okay, thank you so much for all the response. Thank you.
Abhishek Jain
Thank you.
operator
Thank you. A reminder to the participants, please press star and one to ask a question. The next question is from the line of Pooja Mehta from JK Securities. Please go ahead.
Pooja Mehta
Hi sir. Good morning. Just one question from my end as of now. So just wanted to view our outlook on the current. Given the current global and geopolitical uncertainty how do you view the export business for the industrial product? Just wanted like your view on the same.
Abhishek Jain
Well, Pooja, I think your concerns are very profound. We are engaging with all the customers especially for the US market. One customer of ours, they have kind. Of delayed their decision by another 3. 4 months. Due to this tariff war. They are also waiting to see what. Is the final tariff that is going to happen. It is obviously going to affect the export plan for the industrial product business. Certain customers are continuing as of now. But we don’t know what is going to be the situation. It is I think very difficult for anyone to make any prediction of how export is going to pan out this year.
Pooja Mehta
Understood, sir. In case of any further questions, I’ll come back. I’ll just get in the queue now. Thanks.
operator
Thank you. As there are no. Ladies and gentlemen, as there are no further questions I now hand the conference over to Mr. Abhishek Jain for his closing remarks.
Abhishek Jain
Yeah. Thank you very much. Financial year 26 has begun with strong. Strategic wins and a healthy order book. Even as quarter one reflected near term. Revenue moderation amid a subdued industry environment. We expect the coming quarters to gain momentum supported by new program launches, enhanced. Execution and a gradual recovery for the automotive sector. Thank you all for joining us today. We hope we were able to address your questions effectively. In case you have any further queries or clarifications please feel free to reach. Out to us or to our investor. Relations advisor, Strategic Growth Advisors. Thank you very much everyone.
operator
Thank you on behalf of ppap. Thank you, sir. Thank you. On behalf of PPAP Automotive Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.