Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Ppap Automotive Limited (NSE: PPAP) Q4 2026 Earnings Call dated May. 12, 2026
Corporate Participants:
Abhishek Jain — Chief Executive Officer And Managing Director
Analysts:
Rohit Kumar — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to PPAP Automotive Limited earnings call for Q4 and FY26. 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 Star then zero on your touchstone pole. 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 — Chief Executive Officer And Managing Director
Yeah. Thank you Ikrav and a very good afternoon everyone. I extend a very warm welcome to all the participants joining us on this call today. I am joined today by Mr. Sachin Jain, CFO.
Rohit Kumar — Analyst
Good morning, good afternoon all
Abhishek Jain — Chief Executive Officer And Managing Director
And Strategic Growth Advisors, our Investor Relation advisors. We have uploaded our quarter four and financial year 26 financial results and presentations on the stock exchanges as well as on our website and I hope everyone has seen them. Quarter four, financial year 26 marks a significant turning point for the company. Reflecting the positive outcomes of the sustained efforts and strategic initiatives undertaken over the past several quarters. The quarter not only demonstrated improved business performance and operational recovery but also laid the foundation for the future through several long term strategic reforms and organizational initiatives aimed at driving sustainable growth and value creation.
I am pleased to share with you that going forward, the company along with all its subsidiaries will collectively operate under the unified identity of the Ajay Group. This represents a significant milestone in our journey towards building a stronger, more cohesive and future ready organization with a shared vision, unified culture and enhanced strategic alignment across all businesses in alignment with the Group’s long term strategy. Apart from the rebranding, three additional strategic initiatives have also been undertaken and set in motion.
These initiatives are again aimed at sharpening the business focus, driving the operational efficiencies and enabling more effective capital allocation, thus creating sustainable long term value for all the stakeholders. The first strategic reform was the successful completion of the divestment of our stake in the joint venture company PPAP Tokai India Rubber Private Ltd. This divestment has been done to Tokai Kogyo Co. Ltd. Japan over a period of nearly 10 years. The company had invested approximately 48.5 crore rupees in the venture which generated limited financial returns.
The stake has now been divested for a total consideration of 100 crores representing a significant value realization for the company. The proceeds from the transaction after payment of applicable taxes will strengthen the company’s reserves, support reduction in net debt and provide additional financial flexibility for long term strategic investments and future growth opportunities. The second strategic restructuring initiative relates to the tooling business operating under the Meraki brand. In line with our focus on creating sharper business verticals and enabling specialized growth, the tooling business is proposed to be hyped up into a wholly owned subsidiary of PPAP under the name of Meraki Precision Tools Engineering Ltd.
This restructuring is expected to provide greater operational focus, enhance scalability and strengthen the business’s ability to pursue growth opportunities independently. The transition is targeted to be completed by quarter two of financial year 27 subject to the receipt of the necessary regulatory and statutory approvals. The third strategic reform relates to the battery business operated through the wholly owned subsidiary Avinya Batteries Limited as part of the Group’s ongoing efforts to streamline operations and to improve efficiency, the Company has proposed the merger of Avinia Batteries Ltd.
With the parent entity EPAP Automotive Ltd. Again, this merger is expected to enhance the operational synergies, optimize resource utilization and simplify the corporate structure which will further enable stronger integration of the battery business with the overall strategy of the Group. The merger process is targeted to be completed by quarter four of financial year 27, subject again to the necessary regulatory and statutory approvals. We are confident that following the successful implementation of these reforms, the Group will emerge stronger and better positioned for long term growth.
Collectively, these restructuring initiatives represent a significant strategic milestone for the Ajay Group and are aimed at creating a more focused, financially stronger, operationally efficient and future ready organization capable of delivering sustainable value to all the stakeholders. Coming to the operational performance, we are pleased to report a strong sequential Recovery during quarter four of financial year 26 driven by improved execution across key business segments and gradual normalization in customer schedules.
The quarter reflects strengthening business momentum and the positive impact of focused operational initiatives undertaken across the organization. Consolidated Revenue for Quarter 4 grew by 18.6% year on year basis and 25.7% on quarter on quarter basis to Indian Rupees 175.5 crores EBITDA for the quarter increased by 12.9% year on year to INR 16.9 crores, supported by improved business momentum, better operational performance and enhanced execution. During the quarter, capacity utilization levels also improved meaningfully to approximately 78%, reflecting stronger throughput across facilities and gradual stabilization in customer schedules.
For financial year 26, the company reported a consolidated revenue of 567 crores. While the overall performance remained resilient amid a challenging operating environment, revenue growth during the year was primarily impacted by the deferment of SOPs as well as model specific performance trends across the market and customer segments in which we operate in. Despite these headwinds, the Company continued to maintain operational stability and remained focused on on strengthening its fundamentals and long term capabilities during the year.
The Company had revised its guidance in January 2026 to reflect the prevailing business environment and customer schedules at that particular point. However, during the later part of Q4, demand conditions and due to some ordering patterns remain softer than anticipating, resulting in a variance even against the revised guidance. The deviation in guidance was primarily driven by a slower than expected demand recovery from the automotive OE customers. Some orders of the tooling business got deferred to the quarter one, some battery related orders also got deferred to quarter one and moderation in the consumer demand durables demand cycle.
Lower sales volume during the quarter also impacted operating leverage, thereby affecting profitability at the PAT level. Profitability was further impacted by mark to market losses on investments and an additional one time employee benefit obligation of approximately 3.6 crores arising from the labor code implementation challenges which were not factored into the earlier guidance. Looking Ahead While our order pipeline and customer engagement remain encouraging across all the five businesses, the external operating environment continues to remain dynamic and volatile due to the ongoing geopolitical uncertainties, the disruptions and the logistics related challenges arising from the West Asia conflict.
Given the evolving demanding environment and continued uncertainty, the Company has decided that it will provide its financial year 27 guidance during the quarter 1 financial year 27 earnings announcement once we have a better clarity on how the market conditions are faring out, we remain committed to further strengthening our guidance and communication framework to ensure greater transparency and provide the market with a more accurate reflection of the Company’s business outlook and expected performance, let me now briefly discuss the performance across our key business segments, the first being the automotive parts business.
This business continues to remain the largest contributor to our revenues. During the year, we commenced supplies for several new vehicle models across all OEMs, further strengthening our presence across both EV and I segments. Going forward the business is expected to benefit from the gradual ramp up of all the new projects that we’ve started in the last year, while Sanitary is still preparing for the launch of multiple new models also in the coming periods. These developments are expected to support the growth, improve capacity utilization and further strengthen our long term business visibility.
During financial year 26, the company secured new businesses of approximately 840 crores across EV and ICE platforms. The order book continued to remain diversified across key customers including Maruti, Suzuki, Tata Motors, Mahindra and Mahindra, Honda and other OEMs. Now coming to the Aftermarket business the aftermarket business continued to deliver robust growth momentum during the financial year 26, recording an impressive growth of 36% over the previous year. The robust performance was driven by the company’s expanding distribution network which is now comprising of 147 distributors which are supported by a diversified product portfolio of 1264 SKUs which are spread across three key segments, spare parts, service parts and accessories.
Accessories including perfumes and car care products. The business continues to strengthen its market presence through wider reach, enhanced product availability and growing customer acceptance across channels. Going forward, the focus for this business will remain on further expanding the distribution network which will deepen the market penetration and strengthening of the product portfolio to drive higher customer engagement and higher long term growth. Now talking about the Tooling Business the tooling business has successfully improved its utilization levels to more than 90% during the financial year 26 and maintains a robust order pipeline across both automotive and non automotive sectors.
In financial year 26, the business grew by 12.1%. The division has successfully developed 148 molds during the entire year. Going forward, the business will remain focused on expanding its customer base and strengthening market reach to further enhance its growth trajectory. The Industrial Product division continues to make steady progress during financial year 26 by leveraging PPAP’s core strength in plastic and rubber extrusion as well as plastic injection molding into adjacent industrial applications.
The business again witnessed encouraging traction across non automotive applications as well as export markets resulting in a growth of 38% during this year. This performance reflects the Company’s continued efforts towards diversification and expansion into new customer segments and applications. Going forward, the division will remain focused on further strengthening its presence across industrial and export markets with the object of diversifying revenue streams, reducing dependence on the automotive sector while building a more resilient and balanced business portfolio.
Now talking about the Battery business the battery business witnessed an encouraging operational improvement during quarter four and is now gradually moving towards a turnaround phase Revenue from the business increased by 1.28 times in financial year 26 compared to the previous year, reflecting improved traction and strengthening business momentum. Over the last few quarters, the company has undertaken several strategic initiatives aimed at improving operational efficiency, strengthening the customer engagement and enhancing the long term scalability of the business.
These efforts are expected to support a stronger and more diversified customer profile going forward. We believe that the strategic actions already implemented, together with the organization reforms planned during the year will help improve the operating margins which will definitely improve the overall business efficiency and significantly reduce the losses being contributed by this division over the medium term. In line with our continued commitment to the shareholder value creation, the Board has recommended a final dividend of Rs.
1.5 per equity share for financial year 26, taking the total dividend for the year to 2.5 rupees per equity share, subject to the shareholders approval. Friends, the end of financial year 26 marks a significant turning point for the company wherein we have started witnessing the positive impact of higher utilization of the company’s assets and the strategic initiatives undertaken over the past several quarters. The improvement in operational efficiency and capacity utilization during the quarter four of financial year 26 provides confidence in the underlying strength of all the businesses being done by the company, subject to stability in the external operating environment.
We believe that sustaining the current momentum will enable the company to maintain and further strengthen the performance levels achieved during the quarter. Across this upcoming year, we remain focused on strengthening our core automotive business while scaling up our emerging verticals with the objective again of driving long term growth and de risking our business from sectoral and geographical risks and creating enduring value across all our business segments. With that, I conclude my opening remarks and I request Iqra to open the floor for questions.
Thank you very much for your kind listening.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, press N1 on the touchstone Telescope. If you wish to remove yourself from the question key, you may press star N2. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Unidentified Participant
The first question is from the line of Rohit Kumar from ADM Advisors. Please go ahead.
Rohit Kumar
Hello. Hi sir, I’m audible.
Unidentified Participant
Yes, we can hear you.
Rohit Kumar
Yeah. Sir, My first question was considering the ongoing West Asia conflict, the resultant supply chain disruption, so the raw material prices are expected to remain elevated. So how is PPAP managing these challenges and what could be the potential impact on margins going ahead?
Abhishek Jain
So, regarding the supply chain disruption, so There is a significant increase in the raw material prices. So that side currently we are the first priority is to supply the material to the customer without disturbing their lines. So as of now the price increase demanded by the supplier in consultation with the customer we are giving to the supplier so that there should not be any disruption to the customer end and out of that almost 50% is already covered with the customer. We have the pass on policy with the customer.
Customers rest we are discussing, we are in the discussion with the customer how to take care of that. Because currently the situation is quite fluid. So when the situation is stabilized post that we will have a detailed discussion how to take care about the balance impact of the 50%.
Rohit Kumar
Okay sir. Okay. And for my second question was how does the company plan to utilize the proceeds from the proposed sales of the baby stake? So do we have any immediate plan to reduce our debt?
Abhishek Jain
Yeah, on the net level our debt is reduced to 203 crores. For the gross level it is around 195 crores. So because we want to deploy it for the long term strategic requirement. So for this year we will keep it like this only and we will utilize the fund as in when there is a requirement for the strategy side rest capex would be done for the internal accuracy and we will keep the debt that level around this level only for this financial year.
Rohit Kumar
Okay sir. Okay. That was helpful. Thank you so much.
Operator
Thank you. Ladies and gentlemen, before we take the next question a reminder to all the participants if you wish to ask a question please press star and one. We will take our next question from the line of Manav chain from Jain Investments. Please go ahead.
Rohit Kumar
Thank you for the opportunity sir. So can you elaborate the reason behind the decline in the contribution of tooling business and overall sales?
Abhishek Jain
There are tooling sales Depends. We have the two kinds of tooling sales. One is the manufacturing manufacturing Meraki precision tools. So that side there is no decline and second tooling is linked with the customer sops. So last year in the Q4 there was some SOPs were planned. So that’s why there were high tooling sales in the last financial year. In Q4 there is a one big model there for Maruti. So that is why there is a change in the tooling tail. This year there is no such decrease in the. We can say the same because we have lots of model in pipeline so that tooling fail will be done in the FY27.
So this year again we would have the significant producer.
Rohit Kumar
Okay, so I got it. And additionally as you highlighted in the Commentary regarding the tooling business is being restructured under Meraki Precision Tools. So like what are management’s long term aspirations for this business for next three to five years? And what key milestones are we targeting to achieve through this restructuring?
Abhishek Jain
See, first of all, this restructuring is being done so that we have better clarity on the tooling business and the management side. Also, it is a clear cut management style because it is very different from the part business which is primarily a just in time business. That’s why it is required that this tooling business should be done in a separate entity. As I explained you in this in the opening remarks, this year we have made almost 148 molds in the whole financial year. And gradually in the next three years we will try to double this capacity.
So maybe in three years we are planning roughly around 300 odd molds per per year. More or less one one mould in every 1.5 days.
Rohit Kumar
Okay sir, got it. And sir, regarding the battery business, you had mentioned that the business is witnessing early green shoots on ground. And when do we expect this business to achieve break even? And how do we see the capacity utilization evolving in f.
Abhishek Jain
So this year based on what is what orders we executed in quarter four in financial year 27, we expect a full recovery of this business. And based on the contracts that we already have with the customers and whatever things are being discussed, we expect that the whole plant and machinery will be will be 100% utilized in this year financial year 27.
Rohit Kumar
Okay sir, got it. And have we secured any meaningful customer orders?
Abhishek Jain
Sorry?
Rohit Kumar
Have we secured any meaningful customer orders?
Abhishek Jain
Yes,
Rohit Kumar
Yes,
Abhishek Jain
We already have meaningful orders and we are engaging with good customers now. And if you wait till quarter one, I think quarter one, you can see the increase in sales of this division.
Rohit Kumar
Okay sir. Thank you. That was very helpful. Thank you. All the best.
Abhishek Jain
Thank you.
Operator
Thank you. A reminder to all the participants, you may press star and one to ask a question. Next question is from the line of Manju DH from Pinpoint X Capital. Please go ahead. Yes, you’re audible.
Rohit Kumar
Thank you sir for the opportunity. My first question that I have is from the new order book. How much is the execution timeline? Sir, which we have received this water and the financial.
Abhishek Jain
So generally the execution timeline depend almost to five years. Over the period of next five years we execute the lifetime order of any order which we receive.
Rohit Kumar
So you were saying that there was slowdown in the automotive segment. But if I see peers in the auto ancillary segment, they were growing much faster than the like. What were the key segment that dragged our overall growth and margins,
Abhishek Jain
It’s not related to the automotive industry per se, but as we explained in the opening commentary also it’s particularly related to certain models and certain customers only. So we were anticipating them to start SOPs much earlier and produce much more higher cars but unfortunately that has not happened.
Rohit Kumar
When do we expect going for any developments on that currently on those models? No, sorry, I didn’t understand your question. So you said they were slow down in earnings due to the delay? Yes sir. So my question that I have is, you were saying due to some of the models which got delayed, our revenue revenue margins didn’t go in line with our expectation. So currently what’s the update about those models which got delayed? Sir,
Abhishek Jain
Those models have started production now. That is why you see the increase in quarter four numbers and which will continue for this 2627 financial year also. And along with that there will be certain new model startups also happening in this financial year. Got
Rohit Kumar
It. So when this comes into place, how do we see our gross margins and EBITDA margins going forward? FY27
Abhishek Jain
See primarily we need to focus on the utilization of our assets. So quarter four our utilization was roughly around 78% and in the whole year we are anticipating somewhere around that level only maybe quarter one is little less. But over a period of time in next year I think utilization will improve to 80, 82%. So that will drive all the gross margins and everything. And second factor will be the operational efficiencies that we are planning to do right now. Although all the inflationary cost, raw material costs have increased but.
But once all this stabilizes, we have some certain countermeasures to reduce our expenses like implementation of solar energy compared to the grid powered supply and certain employee related reforms also. So all those put together, I think our margins for financial year 2627 should get better than what we’ve been doing in the past. And quarter four also you can see that on a standalone basis if you remove the impact of the wage code then we have improved the margins to 13% EBITDA compared to 11% in the previous year on year basis.
Rohit Kumar
Regarding the battery business as of Q4, what was the losses or are we in a breakeven stage as of now
Abhishek Jain
In Q4 there is a almost only loss of around 40 crores. 40 lakhs. Sorry, in the battery last year it was around 1.2 crores. So we have reduced the losses almost 60 to 70%.
Rohit Kumar
So going forward can you expect profits or in the Breakeven.
Abhishek Jain
So this year on the standalone basis this battery segment should be the profitable at the PBT level. Should be profitable.
Rohit Kumar
And sir, finally just want to know about the aftermarket segment. Sir, how are we looking to grow FY 2020
Abhishek Jain
After market business? Over past 34 years it’s been growing at a good, good CAGR of more than 25%. And this year also we are introducing many new products, adding continuously products to our portfolio and increasing the distribution network. So we are anticipating that even this year it will continue to grow. See it’s been only three, four years since we started this aftermarket business and opportunity is huge in front of us. And we are going full throttle in increasing our market share in all the three segments that I told you about.
Spare parts, service parts and accessories. Thank you sir. All the thank you.
Operator
Thank you. Anyone who wishes to ask a question may press Star in one. We will take our next question from the line of Rishabh Jain from RJS Capital. Please go ahead.
Abhishek Jain
Hello. Am I audible? Yes. So congratulations on the good set of number. My question is in the traditional automotive component business which remains closely linked to the OEM model cycles, what trends are we witnessing in terms of new model launches and platform additions by OEMs? Also how we added any major, have we added any major customers or new programs during the year? And further, can you provide a broad range of content per vehicle opportunity across passenger vehicle platforms? So your first question was the size of automotive OEMs, right?
Rohit Kumar
Yes, yes. Platform additions by OEMs.
Abhishek Jain
So every OEM has some program or something running now I think we’ll witness a lot of new vehicles being coming starting production in this financial year. So Honda also will launch new vehicles. Toyota, Tata, Kia, Nissan, Honda, Mahindra. Every we are seeing across the passenger vehicle segment, all the customers have some or the other model starting up in this new financial year. And when it comes to us, I think we have added Vinfar as one of the major customers last year apart from the EV maker Taylor Motors.
And last year we also secured businesses from Kia and Mahindra which are supposed to start production in this financial year 26, 27. So this year we see lot of new products being started and overall when we see our revenues, almost 78% of our revenue is from vehicles which have been in the market for less than five years. So it’s a fairly young portfolio of vehicles which we are catering to. And when it comes to content per vehicle, it ranges from customer to customer. Somewhere we have higher exposures, somewhere we have lower on an average, it ranges somewhere between 2,500 to 3,500 rupees per vehicle.
And on the upper side it goes up to 8,000 to 10,000. And on the lower side it goes up to 1,000 rupees per vehicle.
Rohit Kumar
Okay, okay. And I have another question is we understand from VHS OEMs that demand for entry level passenger vehicles could remain under pressure due to inflationary conditions and concerns
Abhishek Jain
Around
Rohit Kumar
Rural demand and monsoon trends. Like what is PPAP’s exposure to the small and entry level passenger vehicle segment.
Abhishek Jain
I think the business that we are getting now, first of all, this whole market is now shifting towards SUVs. So SUV, even if it is a mini SUV, still I believe the demand is quite high. It’s only sedans, whether it’s the entry level sedan or even the premium C segment or D segment sedans. That is where the problem has started in the industry. And we’ve seen the numbers of those vehicles coming down. But in the next year, whatever models we are starting are, I think 90% of those are in the SUV space and therefore we don’t see much impact of the market changes coming in into our space.
Unidentified Participant
Okay, sure. Thank you so much and best of luck.
Abhishek Jain
Thank
Unidentified Participant
You. Thank you. Anyone who wishes to ask a question may press star n1 now. As there are no further questions from the participants, I now hand the conference back to Mr. Bishek Jin for closing comments. Over to you, sir.
Abhishek Jain
Yeah. Thank you Iqrao. Thank you everyone for joining us today. We hope we have been able to address all your questions effectively. For any further questions or clarifications, please feel free to reach out to us or our investor relation advisors, Strategic Growth Advisors. Wishing everyone a very good evening. Thank you very much. Thank you. Thank you very much.
Operator
Thank you. On behalf of PPAP Automotive Ltd. That concludes Wisconsin. Thank you all for joining us today. And you may now disconnect your lines.