Pricol Ltd, a leading automotive technology and precision-engineered components manufacturer, will continue with its planned investments, technology development and capacity expansion despite mounting geopolitical and commodity-related pressures impacting the automotive sector globally.
The Coimbatore-based firm will remain focused on its medium- and long-term growth strategy and will not scale back critical capital expenditure or research and development initiatives, said its Chairman and Managing Director Vikram Mohan during an analysts call.
Focus on technology and polymer business
“In the polymer business, we will invest in technology and convert it from a component maker to a value-added polymer player,” he said.
Asserting that the current financial year began with a semiconductor crisis, followed by disruptions relating to rare earth magnets and the West Asia conflict, he said Pricol still managed to deliver a “decent set of numbers”.
Commodity and freight costs surge
According to him, the West Asia crisis is now impacting both industry and the broader economy, with the rupee weakening sharply and input costs witnessing steep increases.
“Polymer prices have gone up by about 55%, aluminium by 62%, semiconductors by 35% and memory control devices by 28%. Freight costs are spiralling out of control both inbound and outbound freight,” he said.
Despite the challenging environment, the company remains confident of navigating the crisis with support from customers, suppliers and its strong balance sheet.
Capex cycle gathers pace
Pricol said it will continue to invest heavily in R&D and new technologies to stay ahead of competition while maintaining its long-term growth plans.
“We do believe that there will be softening of earnings and slowing of the whole automotive sector on account of these geopolitical headwinds,” Mohan said.
The company plans capital expenditure of ₹680-700 crore this year as it begins its next major capex cycle after reaching peak capacity utilisation across divisions.
Exports and M&A plans
Mohan said the company had achieved its FY26 revenue target of ₹4,000 crore with “next to no debt”, compared with its earlier guidance of maintaining debt-equity ratio below 1:1.
However, exports remain below expectations at 7% of revenue against the earlier aspiration of 20%. “Our goal is to take it to 10% of revenue in the coming years,” he said.
On mergers and acquisitions, Mohan said the company remains cautious and selective under the current macroeconomic conditions, though active negotiations and due diligence are underway for multiple opportunities.