Rico Auto Industries Limited (NSE: RICOAUTO) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Mr. Ambesh Tiwari — Financial Communications and Investor Relations
Kaushalendra Verma — Executive Director
Arvind Kapur — Chairman, Chief Executive Officer & Managing Director
Mr. Naveen Sorot — Chief Financial Officer
Analysts:
Aman Vij — Analyst
Sia Deshmukh — Analyst
Yash Junwala — Analyst
Deepak Poddar — Analyst
Akash — Analyst
Presentation:
operator
Good day and welcome to the ricoh Auto Industries Limited Q3FY26 conference call. 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 this conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rambesh Tiwari. Thank you. And over to you, Mr. Ambesh.
Mr. Ambesh Tiwari — Financial Communications and Investor Relations
Thank you. Good evening everyone and thank you for joining us for ricoh Auto Industries Q3FY26 earnings conference call. From the management side we have with us Mr. Arvind Kapoor, Chairman, CEO and Managing Director, Mr. R.K. meghrani, Executive Director. Mr. Koslendra Verma, Executive Director, Mr. Navin Sorat, Chief Financial Officer and Ms. Ruchira Gupta, Company Secretary. I now request Mr. Koslando Verma to take us through the key opening remarks after which we can open the floor for question and answer session. Thank you. And over to you, sir.
Kaushalendra Verma — Executive Director
Thank you. Very good afternoon everyone. A warm welcome to all of you and thank you very much for joining the requirements limited earning conference call for the third quarter of financial year 2526. I washed Verma. Speaking to you from our corporate office. I’m joined today by our Chairman and Managing Director Mr. Arvind Kapoor and Mr. R.K. meghlani, Executive Director, Mr. Naveen Sourat, Chief Financial Officer and other members of our senior leadership team. Let me begin with you a brief overview of the policy and macroeconomic environment which continues to be supportive of the automotive sector. The Union budget for FY2627 introduced duty exemptions on lithium and cells and capital goods along with the incentives for semiconductors and electronics manufacturing.
These measures are expected to lower EV production cost and further strengthen the automotive ecosystem. Despite global uncertainties, India’s macroeconomic outlook remains resilient with GDP growth projected at 6.4% for financial year 27, the highest among G20 nations. Monetary policy remains accommodative with the RBI maintaining the repo rate at 5.25 following the cut in December 2025. Calendar year 2025 was a landmark year for the Indian automotive industry supported by the tax relief, interest rate cuts and the rollout of GST. 2.0 passenger vehicles. Commercial vehicles and three wheelers recorded all time high sales with two wheeler achieved their second highest annual sales.
The outlook for the auto component sector has improved further following the India US Trade Agreement which provides professional and zero duty access for select auto components, enhancing export competitiveness, Strong double digit growth towards the end of 2025, healthy auto pipelines, robust festive demand and the transmission of interest rate cuts are expected to support a positive close to FY2026. Looking ahead to financial year 27, the industry is expecting to grow at mid to high single digit with passenger vehicles growing 5 to 7%, two wheeler around 6 to 8% and commercial vehicles 4 to 6% and three wheelers are expected to grow between 9 to 10%.
EV penetration in two wheelers is projected to increase to 7 to 8%. Against this backdrop, Ricardo Industries delivered a strong operating and financial performance during the Q3 FY26. Consolidated revenue grew by 14.1% to 632 crores. EBITDA increased by 33.2% with margin improving to 10%. On a standalone basis, our revenue grew 25.5% year on year. For the nine month period, consolidated revenue stood at 1806 crore reflecting a growth of 7.7%. Our EBITDA grew by 23.2% and net profit more than tripled driven by strong industry demand and execution. With the momentum expected to Continue into Financial 2027, our revenue performance was driven by stable volumes from key OEM customers.
Successful launch of new programs, improved capacity utilization during the quarter EBITDA margin expansion reflected the benefits of internal cost initiatives, productivity improvements and better capacity utilization, partially offset by pricing pressure from our customers. Looking ahead While near term demand visibility remains cautious, we are optimistic about the medium to long term prospects of the Indian automotive sector. Ricoh Auto is well positioned to benefit from continued localization by OEMs, increasing contained per vehicle and gradual recovery in export markets. We remain committed to sustainable growth, margin improvement and long term value creation for all our stakeholders. Thank you once again for your time and continued support. We will now be happy to take your questions. Thank you so much.
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. Our first question comes from the line of Aman from Astute Investment Management. Please go ahead.
Aman Vij
Good evening sir. First question is on the auto business. Could you talk about what kind of growth Are we seeing for next year?
operator
Sorry to interrupt you, sir, but your voice is breaking. Can you repeat?
Aman Vij
Yeah. Hello. Hello. Is this better now?
operator
Yes, sir. You can go ahead.
Aman Vij
Yeah. Yes, my first question is on the auto business. Could you talk about what kind of growth are we seeing for next year? And when do we see our margins Levert to say 11, 12% which we historically used to do.
Arvind Kapur
Fortunately for us, tax reliefs that were given last year, the GST and also the income tax reduction that had taken the last year. That is reflecting in the growth of the auto industry. And hence the auto component industry is also benefiting from that. And besides that, if you look at. The. Agreement we’ve had with Europe and with us, that will also help us to. Because if you look at the export market, the total Indian auto component industry has not been 1% or 1.5% of the total global market. We need to grow and we need to partner more in the global market. And what is happening is that China plus one is actually taking place. There are companies who are approaching us for developing a component which they used to earlier buy from China. And all that is happening. And we see a very good future for the company.
And the advantage we see is that in some case, in some cases, like the foundry and also the aluminium die casting where we had surplus capacities, those capacities will start getting used. And that will reflect directly into the bottom line. And you see those. And besides that, the other thing that we’ve added is the railways. And in the railway that is mainly the iron side that is going to be utilized. And with minimal investment. There is hardly any investment that is actually taking place except in the jigs and pictures and also the patterns. Otherwise the equipment is all in place.
Equipment already existed with us. So there will be better utilization of our foundry. And that I think this year. Okay, the next call that we have with you all, we would be able to talk to you in more details as to what the future looks like. Because we’ll have our budget also ready for the next year. But basically a good growth taking place in the coming years.
operator
As there’s no response, we move to the next question. Our next question comes from the line of Sia Deshmukh from Pune e Stock Broking Ltd. Please go ahead.
Sia Deshmukh
Hello. Am I audible?
operator
Yes ma’, am, you are. Please go ahead.
Sia Deshmukh
So my first question was what share of your order book is now EV plus hybrid link? And the second, are we seeing better realization in EV components versus ice? What is it?
Arvind Kapur
EV and hybrid. Right. Hybrid. We have grown from 4% to 7% mainly because of the hybrid increase in the market now. So. But what is the growth in the next that actually it will be crossing double digit numbers. So we will be close to 7%. What has happened is both the IC engine and the hybrid and the EV both are growing and we are participating in both. But the IC engine grew faster and the IC vehicles grew faster. And so our EV share had gone up to EV hybrid gone up to 9% of our turnover. But now it is in the region of 30,000, About 7% and next year we are the growth that is taking place in the hybrid. We are hoping that there would be a double digit growth. We’ll be close to double digit or even above that.
Sia Deshmukh
Okay, thank you sir.
Arvind Kapur
But you must also recognize one thing that in Europe they’ve relaxed the IT angels. Earlier they had, they had almost put an end to the icing in by 35, 20, 35. But now that has been relaxed. So we see icing grow both in Europe as well as in the us.
Sia Deshmukh
Okay, that’s helpful. Thank you.
operator
Thank you. My next question comes from the line of Yash Junwala, an individual investor. Please go ahead.
Yash Junwala
Hi. Am I audible?
operator
Yes, clear. Yeah.
Yash Junwala
Hi. So my first question is actually on the railway side in the Q2 console you have said that we have already started supplying some parts to railways. So has railway contributed to any part of our revenue in Q3?
Arvind Kapur
See, we were supplying indirectly, not directly to the railways and we were supplying to companies who are suppliers to the railways. But now the RDSO has given us approval for a couple of components and we have another inspection taking place for more set of components. So they said we will be supplying directly also to the railways. But having said that, there is very little contribution. But there is a contribution to the sales in the, to the indirect sales to the railways. And I think in the second quarter of next year we should be regular suppliers to railways directly and indirectly. And we are hoping that the revenue will grow pretty fast.
Yash Junwala
So you. We had guided that we will do about 60 to 70 crore rupees of revenue from railways in financial year 26. So are we on track or is that, has that been delayed?
Arvind Kapur
No, no, we are not on track there. But 27 definitely we’ll be crossing that.
Yash Junwala
Okay. My second question is actually on the commodity side because aluminium and copper prices have gone up. Are we seeing any demand related headwinds and what does that do to our margins? Like in our conversations with our oem, have these prices come up and how are these being looked at from A demand perspective.
Kaushalendra Verma
Yeah, our RM prices is indexed with the customer and customer basically index the for the RM prices on the quarterly basis and with some customers we have on the monthly basis also. So on the RM side, if there is an increase on the RM side, it will not affect our margin. There may be a lag for some time before we get the entire recovery from the customer.
Arvind Kapur
But you know, having said that, the margins, if you look at the percentage of EBITDA that does get impacted because you know your sales goes up and. But what we get from the customer is just that clean differential in pricing that has gone up and that does have an. So that becomes a challenge for us and we need to fight. We keep on fighting with our customers on increasing our other costs as well. So that’s a challenge that we always have, but we will keep on facing it. But besides the raw materials, the labor code is the other thing that has been implemented and we are already, I think in about a month’s time, once we get all the clarification, we will be approaching our customers for a price revision there also.
Yash Junwala
Okay. And lastly, if I may ask, any update on the electronics users that we had, we were participating in, are we seeing any buildup of interest there? Because we had participated in some, some auctions. I, I believe there’s a big tender.
Arvind Kapur
We participated in and that finally the government withdrew the tender after almost three to four years and there was a lot of excitement because we were definitely the frontrunners there. And the government, they’ve gone back to the old policy of giving it back to the public sector undertakings. So that is the status of the fuse. But now again they’re coming with a policy that at least 20% or 25% should come from the private sector because they need to de risk their supply base also. So all this is happening, but you know how the government moves and how the army moves in very, very slow process.
Yash Junwala
Okay, so for the time being we, there will be no supplies of fuses from our end.
Arvind Kapur
We probably supply to the public PSUs who are supplying fuses to the army. But directly, no, not at the moment, but as and when it happens, we will definitely inform you about this.
Yash Junwala
Okay, thank you. That’s all from my side.
operator
Thank you. Participants who wish to ask a question may press star and one on the Touchstone telephone. Our next question comes from the line of AMAN from Astute Investment Management. Please go ahead.
Aman Vij
Yes, so continuing with the fuse part of the business. So in terms of trials, are we already approved or orders obviously will Take time to come. But where are we in terms of trial and are we only focusing on the art? Sorry, go ahead sir,
Arvind Kapur
I’ll tell you what happened. There was a tender and I remember we holding almost 150 crores, 120 crores or something of bank guarantee that we had given for, for a tender which is about 10,000 crore. And so we got the samples ready and we submitted everything. The sappers got tested also and everything was okay. And that’s the time that the army, change of army or the government changed the policy and they decided to fall back on to the PSU rather than go to the private sector. So that is what has happened. So the testing and everything has been done. But the point is the order placement, the tenders were withdrawn and they were not opened.
Aman Vij
That you had explained two, three years back quite clearly. And it was given to the public sector companies. My question was if some companies are thinking about say exports or they are even thinking about say doing other kind of fuses. One is this artillery fuse, 155mm, which I think only PFC has been given. But what I saw was there was couple of tenders that has opened up recently for other kinds of fuses for say lower caliber. So are we thinking about participating in that? Where are we in terms of trial for those kind of products? Whatever has happened, has happened. We can’t change that. But any new things, new products we are developing, that is the question.
Arvind Kapur
At the moment. On the fuse front, whatever our collaborator in South Africa had, we were, we were quoting those fuses that. But now the other fuses that we are talking of, we are talking to our collaborators if they could give us a technology for those.
Aman Vij
Okay, so we all have a tie up with that South African company.
Arvind Kapur
Yeah, yeah. I, I think most of the companies have a tie with the same company. Even the PSUs have a tie with the same company.
Aman Vij
Sure sir. Sure sir. And sorry I missed that part. In terms of what was the growth target for next year in auto segment and the margins you are targeting next?
Arvind Kapur
I think there’ll be a growth of double digit growth definitely this year. And both in the export front as well as the domestic front and in the export front, there are many programs which have been launched which we have been in the process of launching the whole of this year. And some of them will come into production in the first quarter and some will come in the production in the second quarter of next year. And there are more that are being launched both for the domestic market as well as the export market. So we are in there and I think the growth will be more than, it will be more than double. It’s more than 10%, 12% if not 15%. But we’ll be able to give you a clearer picture in the next meeting because we are, we are organizing our budget meeting.
Aman Vij
Sure, sir, thank you for answering the question.
operator
Thank you. Our next question comes from the line of Deepak Podar from Sapphire Capital. Please go ahead.
Deepak Poddar
Yeah, I’m audible, sir.
operator
Yes, you are audible, sir, but can you speak a little louder?
Deepak Poddar
Yeah. Thank you very much for this opportunity, sir. So sir, on the railway front you mentioned that now the 70, 80 crores, we are not on track and maybe we’ll cross that in FY27, right?
Arvind Kapur
Yes.
Deepak Poddar
So accordingly, I mean this year we were targeting around 26 and. Hello. Yeah, so we were targeting around 2600 crores. So how would that change? I mean given that railways will, will be short.
Arvind Kapur
We’Ll be very close to that. But we will not be touching that figure. That is one. It’s not only because of the railways. We did better in the, the component side as far as the domestic side part is concerned. But the export side, because of Mr. Donald Trump, we had some tensions were there. But even though our exports to the US went up, they would have gone up much more than this. And so the market has been mixed this year. So what we lost in the railways, we did cover up a lot in the other side, in the tubular side especially. But let’s say now with the railways certainly add on to our turnover next year, that’s for sure.
Deepak Poddar
And what sort of revenue we are targeting in railways in next year?
Arvind Kapur
Internal target.
Deepak Poddar
Come again, sir?
Arvind Kapur
Our target is much higher. But we are talking, we are committing about 60 to around 60 this year. 60. 65.
Deepak Poddar
60. 65. Water for next year. FY27.
Arvind Kapur
Yes, yes, yes.
Deepak Poddar
60, 65 crores in railways, right?
Arvind Kapur
Yeah.
Deepak Poddar
Okay. Okay.
Arvind Kapur
It’ll be higher, but.
Deepak Poddar
That’S fine. I mean conservatively you can say that is what we are looking at.
Arvind Kapur
Because the items that we are producing, we are, we are selecting items where the least investment is there and maximum utilization of a capacity is there. So that will help to improve our total bottom line also.
Deepak Poddar
Okay, I got it. And now the margin front, I think in the last call we had said a margin of 12, 13% by 4Q. But we are still far away from it.
Arvind Kapur
Yeah. Yes, we are not there, but we will get there. We are very clear path on getting to the margin of 13%.
Deepak Poddar
So 13% EBITDA margin so what’s the timeline we can consider now? I mean this 12, 13% of EBITDA margin now, I mean in next two to four quarters or if not in this fourth quarter.
Mr. Naveen Sorot
In this. Deepak, I guess there are a couple of things to look into. I guess one is the commodity is quite volatile though. So we are getting it transferred and settled with the customer. But because of the denominator effect, the percentages do go down. So it is very difficult to say that when exactly we are going to achieve 12 to 39%. Yes, there is an improvement in the business that we are already seeing. There is a good amount of traction in auto sector per se in any case. So we are not dependent on any of even the allied businesses like defense for railway when we are saying there’s a good amount of traction that we are looking in our business subsequently as well.
So this year if you recall we have already done 1800 odd crores till December and I guess by the time we close this year will be somewhere around 2500 crores for next year. We are already concluding our budget exercise. Maybe by the time we hit next quarter, I guess we will have most of those numbers handy. With respect to what is the kind of top line that we are targeting and what is the kind of bottom line that we are looking at? I guess if you look at even nine months that we have done for current year, I guess EBITDA margins are hovering at around 9.6, 9.7%. And this is on a inflated base as well because the aluminium prices have risen in current year as well. So I guess EBITDA in terms of a percent is more of a theoretical number than practical. But yes, if you look at overall numbers are improving, EBITDA in terms of value is improving and so is the top line.
Deepak Poddar
Okay, okay, I got it. That’s very clear. And when we say this margins of 12, 13% we include other income rate.
Mr. Naveen Sorot
Yeah, it is. But if you look at even our current numbers, the contribution of other income is very slowing down.
Deepak Poddar
Yeah, yeah.
Mr. Naveen Sorot
Yes. So when we are targeting a much improved EBITDA number, this is without any reliance to other income, Correct?
Deepak Poddar
Correct. And what is the tax rate one should look at at a company level?
Mr. Naveen Sorot
25%.
Deepak Poddar
25% rate. Okay, but this quarter your tax rate were higher because of a little higher, right? I mean this quarter.
Mr. Naveen Sorot
Because of the defer tax. But I guess overall it will be in and around 25% because we have shifted to the new regime.
Deepak Poddar
Okay, okay, okay. And just one last thing. In terms of Revenue. I mean you mentioned that we’ll. We’ll kind of look at after fourth quarter. But I think we were. We had said earlier that 3,000 plus is what we might be targeting for FY27. So. So would there be any material change on that?
Mr. Naveen Sorot
That that is what we plan for the next three to four years and those are the figures we had quoted on there. But a lot of change and let’s see what happens and I think we might do even better.
Deepak Poddar
Okay. Okay. Wish you all the very best. That’s it from my side.
Mr. Naveen Sorot
Thank you so much. Thank you.
operator
Thank you. Participants who wish to ask a question may press star and one on the Touchstone telephone. Our next question comes from the line of Akash, an individual investor. Please go ahead.
Akash
Hello sir. Am I audible?
operator
Yes. Hello. Please go ahead.
Akash
Hello sir. Thanks for the opportunity. So my question is regarding the interim US India trade deal. So with the tariffs coming down to 18% what is the amount of saving that Ricoh would be able to retain as margin versus passing it on to the US consumers? And second question is regarding the special 0% duty that the Commerce Minister talked about. So what percentage of Ricoh specific product mix qualifies for this duty? If you have any clarity on that.
Arvind Kapur
See on the tariff front, whatever reduction has been given. But firstly, I must appreciate our customers, all the customers in the US we requested them for the tariff total price increase, a total tariff to be transferred to us. They all accepted, they all agreed. And so now in full honesty, we will return whatever tariffs have been lowered. We will return it back to the customer. So there won’t be any additional profit because of that. But we are hoping to get better business. We’ll be able to compete better with against China and the other countries around us.
Akash
Okay sir, that helps. And second question was regarding the specific product mix of Ricoh that qualifies for the special duty that the Commerce Minister was talking about.
Arvind Kapur
Yeah, there. There is. We are still seeking clarity on that. And once we get the clarity we’ll be able to answer that question better. At the moment there is a little confusion there.
Akash
Okay, sir, Understood. Thanks a lot, sir. Best of luck.
Arvind Kapur
But having said that, let me tell you that earlier the duty that we were paying for most of the components that were being exported to us before the tariff business came in, it was close to about 3 point some odd percentage. 2.75% was the duty and some other taxes. 3.2 was the total percentage. So we were exporting our goods to the US at 3.2. Then the tariffs came in, but the tariffs also got applied to China, Vietnam and all the other countries who we actually compete with. So then the differential was that when we were paying 25%, Vietnam was 19%, China was about 33, 34%.
So we still had an advantage there because over Vietnam, definitely because we have the capacities to supply and we also have the confidence of the customers that we can supply. And while discussing the customers who agree to all of them agreed to pay us the additional tariffs that were done. But they were very, very confident that in six months to one year time these tariffs will come down and they’ll normalize. And so we all worked in that direction. So it’s mainly the confidence that the customers have on us that we continue doing our business and we’ll keep on expanding our business with our customers. So we have been supplying at 3.25% and now today’s 18 3.25%. We will continue to supply because of our relationship with the customers and the confidence of the customer.
Akash
And if my understanding is correct, the tariff will be passed on to the customers.
Arvind Kapur
Absolutely. Because they paid us for it. And we will be, in all fairness, we will pass it on to them.
Akash
Okay, sir, understood. Thanks a lot, sir. This helps a lot. Thank you.
operator
Thank you. Participants who wish to ask question may press star and one on the Touchstone telephone. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Kaushalendra Verma
So once again, Thank you so much for joining the call. And we are confident enough that the Q4 will also be very promising for us going forward. And in the Q4 also, we are going to launch couple of new programs which will have their peak revenue in the subsequent years. And with respect to the questions related to the growth and the EBITDA margin and profitability, we will be coming back to all of you in the next conference call when we complete our internal exercise, complete budget business plan. Thank you so much.
Arvind Kapur
Fortunately, the market is good and there’s a lot of buoyancy and a lot of excitement in the market and amongst our OEMs as well as the customers also. And customers are not only in the cities, but also in the rural areas. So there’s a total growth that is taking place and we wish and hope that this continues.
Kaushalendra Verma
Thank you so much.
Arvind Kapur
Thank you so much.
operator
Thank you. On behalf of ricoh Auto Industries Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you. Deep.