A leading Indian automotive components manufacturer, renowned for its precision engineering and gear technology, is making waves in the industry. The company has forged a strategic partnership with a global automotive technology giant to develop critical components for electric power steering systems, specifically targeting a major American pickup truck manufacturer’s requirements, with prototype production scheduled for early 2025.
Share Price Movement
The share price of RACL Geartech Limited went up 1.2 percent to Rs. 825 per share on Friday, an increase from its previous close of Rs. 815.60 per share. The market capitalisation now stands at approximately Rs. 878.70 crore as of February 07, 2025.
Recent Update
RACL Geartech Limited has partnered with ZF Rane (a ZF Group Company) to develop and supply key components for Electric Power Steering (EPS) systems in passenger cars, including ring gears, sun gears, drive gears, and planetary gear assemblies.
This collaboration supports a customised steering system for a leading American pickup truck manufacturer, marking a significant step in RACL Geartech’s North American expansion and entry into the EPS market for domestic and export purposes. The Prototype production and testing are set for Q2 FY 2025-2026 at the RACL Gajraula plant.
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Financial Highlights
In Q3FY25, the company reported a revenue of Rs. 113.05 crore, slightly down from Rs. 115.27 crore in Q3FY24 and up from Rs. 110.33 crore in Q2FY25, showing a marginal YoY decline of 1.92% and a QoQ growth of 2.48%.
Profit for Q3FY25 stood at Rs. 6.54 crore, a significant drop compared to Rs. 12.02 crore in Q3FY24, reflecting a YoY decrease of 45.38%, while remaining stable compared to Rs. 6.54 crore in Q2FY25, showing no QoQ change.
Competitors
RACL Geartech’s listed competitors include JTEKT India, Hi-Tech Gears, ZF Steering Gear (India), HIM Teknoforge, Bharat Gears, Gajra Bevel Gears, and Samvardhana Motherson International Ltd.
RACL Geartech is currently trading at a P/E of 32.2, which is above the industry P/E of 26.5.
Market Outlook
The auto ancillary industry shows promising growth prospects, with India emerging as a key global sourcing hub and expecting a robust 10.67% CAGR through 2029. The global market is projected to grow at 6.6% until 2032, driven by technological advances in electric and autonomous vehicles.
While the Bharat New Car Assessment Program (BNCAP) will boost innovation in India, the industry faces challenges from rising raw material costs and potential demand fluctuations. Overall, the sector’s growth is anchored in evolving consumer preferences and technological innovation.
Written By Fazal Ul Vahab C H
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