This article first appeared on GuruFocus .
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Consolidated Revenue Growth:14.1% increase to INR632 crore in Q3 FY26.
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EBITDA Growth:33.2% increase with margin improving to 10%.
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Stand-Alone Revenue Growth:25.5% year-on-year increase.
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9-Month Consolidated Revenue:INR1,806 crore, reflecting a growth of 7.7%.
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EBITDA Growth for 9-Month Period:23.2% increase.
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Net Profit:More than tripled, driven by strong industry demand and execution.
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Release Date: February 11, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Rico Auto Industries Ltd ( BOM:520008 ) reported a 14.1% increase in consolidated revenue for Q3 FY26, reaching INR632 crore.
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EBITDA grew by 33.2%, with margins improving to 10%, reflecting strong operational performance.
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The company experienced a 25.5% year-on-year revenue growth on a standalone basis.
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Rico Auto Industries Ltd ( BOM:520008 ) benefited from stable volumes from key OEM customers and successful launch of new programs.
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The company is well-positioned to benefit from continued localization by OEMs and increasing content per vehicle, with a positive outlook for the Indian automotive sector.
Negative Points
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The company is not on track to achieve its targeted INR60-70 crore revenue from the railway sector for FY26, with expectations now set for FY27.
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Margins have not yet reached the historical levels of 11-12%, with challenges such as pricing pressure from customers and volatile commodity prices impacting performance.
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The contribution from the railway sector to revenue remains minimal, with direct supply to railways expected to start in the second quarter of next year.
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The company faces challenges in achieving the targeted 12-13% EBITDA margin due to volatile commodity prices and the need for customer negotiations.
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The electronic fuses business has faced setbacks, with government tenders being withdrawn and reliance on public sector undertakings.
Q & A Highlights
Q: What kind of growth is expected for the next year in the auto business, and when will margins revert to historical levels of 11-12%? A: Arvind Kapur, Executive Chairman, CEO, and Managing Director, explained that the auto industry is benefiting from tax relief and agreements with Europe and the U.S., which will help grow the export market. The company expects good growth due to increased utilization of surplus capacities and new ventures like railways. More detailed projections will be available after the budget is finalized.
Q: What share of the order book is now EV plus hybrid, and are there better realizations in EV components versus ICE? A: Arvind Kapur stated that the EV and hybrid share is currently about 7% of turnover, down from 9% due to faster growth in IC vehicles. However, they expect double-digit growth in the hybrid segment next year. The relaxation of IC engine regulations in Europe and the U.S. is also noted.
Q: Has the railway sector contributed to revenue in Q3, and are you on track to achieve INR60-70 crore from railways in FY26? A: Arvind Kapur mentioned that while there is some indirect contribution to railway revenue, direct contributions are minimal. They expect to become a regular supplier by the second quarter of next year, but the INR60-70 crore target will likely be achieved in FY27.
Q: How are rising aluminum and copper prices affecting demand and margins? A: The company representative explained that raw material prices are indexed with customers, so increases are passed on, though there may be a lag. However, percentage EBITDA margins can be impacted due to sales increases, and they are negotiating with customers on other cost increases.
Q: What is the impact of the interim US-India trade deal on Rico's margins and product mix? A: Arvind Kapur noted that any tariff reductions will be passed back to customers, maintaining competitive pricing against China and other countries. Clarity on which products qualify for special duties is still being sought, but historically, duties were around 3.2% before tariffs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
