Synopsis : The auto-component maker delivered a record FY26 performance, with revenue rising 20.6% to Rs.512.4 crore, EBITDA up 36% to Rs.129.2 crore, and PAT nearly doubling to Rs.46.6 crore. Debt declined 25.5%, strengthening the balance sheet. Supported by export-led growth, fresh OEM nominations, and multiple EV programs nearing commercialization, the gear and drivetrain specialist enters FY27–FY28 with strong earnings visibility.
A leading automotive component manufacturer is entering a new phase of growth, driven by stronger operational execution, improving financial health, and an expanding global customer base. With fresh product nominations, deeper relationships with established OEMs, and multiple electric vehicle programs approaching commercialization, the company is positioning itself to benefit from evolving mobility trends while strengthening its presence across international markets.
Record Financial Performance Reflects Strong Execution
RACL Geartech Limited delivered its strongest-ever financial performance in FY26, driven by robust export demand, operational efficiencies, and growing traction across both conventional and electric vehicle programs.
Consolidated revenue came in at Rs.512.42 crore, up 20.6% year-on-year from Rs.424.99 crore in FY25 the highest annual revenue in the company’s history. EBITDA grew 36% to Rs.129.16 crore, with margins expanding 287 basis points to 25.2% from 22.3% a year ago. Profit before tax more than doubled to Rs.65.73 crore from Rs.32.8 crore, with PBT margins improving to 12.8% versus 7.7% in FY25. On a standalone basis, net profit (PAT) stood at Rs.46.56 crore, with PAT margins improving to 9.30% against 5.96% in the prior year.
Q4 FY26 was particularly strong on a consolidated basis quarterly revenue jumped 48.2% year-on-year to Rs.136.69 crore, EBITDA rose 41.1% to Rs.34.08 crore, and PBT surged 91.5% to Rs.16.91 crore. Operating cash generation for the full year came in at Rs.81.77 crore, up nearly 30% from Rs.62.91 crore in FY25, reinforcing the quality of earnings.
A Stronger Balance Sheet Adds Financial Headroom
Alongside strong earnings, the company significantly cleaned up its balance sheet during FY26.Total debt declined 25.5% to Rs.221.82 crore from Rs.297.59 crore, with the Debt-to-Equity ratio improving sharply from 1.30x to 0.63x. Debt-to-EBITDA also compressed from 3.09x to 1.75x, while interest coverage rose to 4.26x from 3.01x and DSCR improved to 1.74x from 1.08x.
Return on equity improved to 16.03% from 11.74%. The company has budgeted capex of Rs.77.45 crore for FY27, to be funded through incremental bank debt suggesting continued investment in capacity without stretching the balance sheet.
Export-Heavy, Geographically Diversified Revenue Base
One of RACL’s defining strengths is its export orientation. Exports account for approximately 75% of total consolidated revenue at Rs.346.68 crore in FY26, with domestic contributing Rs.110.2 crore. Within exports, Europe dominates at 69%, followed by India and Asia-Pacific at 29% and USA & Canada at 2%.
On the product side, two-wheelers contribute 30% of revenues, commercial vehicles 20%, recreational vehicles 18%, passenger cars 13%, tractor and agriculture 10%, industrial products 5%, and e-mobility and others 1%. This broad spread across geographies and end-markets gives the company meaningful insulation against segment-specific slowdowns.
Royal Enfield and Kawasaki Deepen Strategic Relationships
Two customer-level developments during FY26 stand out for their forward revenue implications. With Royal Enfield, the company received a new nomination for the supply of engine gears (ground gears), layered on top of its existing transmission gear program with the customer. Product development is underway, and start of production is pegged to commence immediately upon successful sample approval.
With Kawasaki, the company secured nominations for fifteen new components, covering Kawasaki motorcycles, a General Purpose Engine (GPE) platform used in lawn mowers and utility vehicles, and an existing 175cc motorcycle. Of these, SOP has commenced for one component, pilot lots have been submitted for nine components with October 2027 SOP planned, and five resourcing components are under development with January 2027 SOP targeted, subject to customer approvals.
New Markets, New Products, New OEM Relationships
Beyond its existing base, RACL is entering new product categories and geographies through three notable wins.From ZF, the company received a nomination for critical Electric Power Steering components for commercial trucks serving the North American market prototype development is in final validation stages, with SOP expected in FY28. This is RACL’s first foray into the North American commercial truck segment.\
From BRP Canada one of the world’s largest ATV manufacturers the company secured a nomination for shift drums, a new product category for RACL. The program targets 1,50,000 parts per annum, initial sample approvals are complete, and mass production is expected to begin in Q2 FY27.
EV Programs Progressing Toward Mass Production
Three flagship EV-related programs are advancing through validation and are converging toward commercial scale. Project Titan, which involves drivetrain components produced from the new “Udhyam” manufacturing facility, has dispatched over 2,500 sets across three phases. Customer approval for the process series has been received, and mass production is on track to start in October 2026.
Project Venus supply of drivetrain parts for an electric sports car has seen over 4,000 sets dispatched across four phases, also targeting October 2026 mass production. Project Crystal, focused on ring gears, sun gears, drive gears, and planetary gear assemblies for Electric Power Steering systems for a leading American passenger OEM’s pickup truck platform, has around 600 sets currently under customer validation.
Outlook
With record FY26 financials, a materially de-leveraged balance sheet, improving return ratios, and a pipeline that spans Royal Enfield, Kawasaki, ZF, BRP Canada, and undisclosed American OEMs across ICE, EV, and commercial vehicle platforms, RACL is steadily evolving into something meaningfully larger than a transmission gear company. The question for investors is whether the execution on Projects Titan, Venus, and Crystal and the new nominations across FY27 and FY28 start dates can translate this pipeline into a step-change in earnings scale.
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