Imagine a thrilling motorcycle journey, the wind whipping past you, or a smooth car ride on a scenic highway. But what powers these experiences? Behind the roar of the engine and the comfort of the seat lies a hidden world, the world of precision engineered automotive components.
Just like a well oiled machine, every vehicle relies on a symphony of meticulously crafted parts. From intricate engine components to robust braking systems, the quality and precision of these elements determine a vehicle’s performance, safety and ultimately, your riding experience.
Here Pricol Limited being a market leader in the Technology driven products like Driver Information Systems, Sensors, Telematics & Fuel as per their annual reports, ensures that each component is meticulously designed and manufactured to meet the highest standards. With its improved product quality and customer service Pricol limited became a consistent performer in the market, it gave a return of 84.40% in this current year compared to the previous year. Currently its stock is trading at 432.90 rupees.
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Industry Overview Of Pricol
The Indian automotive industry is riding a wave of growth, propelled by rising incomes, infrastructure investment and manufacturing incentives. As the nation aims to become the third largest automotive market by 2030, the two wheeler segment has been the frontrunner, catering to the aspirations of the burgeoning middle class.
The current industry valuation stands at $222 billion, the EV market is poised for exponential growth, with an expected net worth of $7.09 billion by 2025 as compared to just $ 2 billion by 2023.
Despite challenges like semiconductor shortages and supply chain constraints in FY 23, the industry’s resilience is backed by demand drivers such as replacement demand, new product launches and policy support.
The two wheeler segment is witnessing a surge in demand for scooters and premium motorcycles, while EV penetration is expected to increase from 5% in FY 23 to 9% by FY 25. The commercial vehicle segment is poised for a remarkable recovery, with domestic sales volumes expected to surpass pre pandemic peaks in FY 2024.
The auto ancillary sector, a vital component of the value chain, accounts for 2.3% of India’s GDP and is projected to contribute 5-7% by 2026. With strong growth prospects across vehicle segments, the industry is expected to reach $200 billion by FY26, driven by local and international demand.
Company overview Of Pricol
Pricol started its journey in 1975 in Coimbatore, Tamil Nadu. It has become one of India’s leading manufacturers of precision engineered products and automotive components. The company serves top automobile OEMs in two- and three-wheeler, passenger, commercial, and farm vehicles through its business and operations in driver information systems and sensors, pumps and related products, telematics, and wiping systems.
Equipment and off-road vehicles with more than 2000 product variations sold in India and over 45 other countries worldwide.As of right now, the company operates eight manufacturing facilities in India in Coimbatore, Manesar, Pantnagar, Pune, Satara, and Sricity one in Jakarta, Indonesia, and three overseas locations—in Japan, Singapore, and the United Arab Emirates. The 5000+ committed employees that drive Pricol Group relentlessly pursue its goal of being PASSIONATE, SUSTAINABLE, DYNAMIC, and EVOLVING.
Their major customers from different verticals include Bajaj, BMW, Ducati, Mahindra, Maruti Suzuki, Ashok Leyland, TATA and Swaraj.. Pricol Ltd got listed in Indian stock exchanges on 10th of February 2017 at 96.09 rupees. The company generates revenue from different segments which include 2 wheeler/ 3 wheeler, commercial vehicle, tractors and 4 wheeler. During
FY 23 – 24 the company consumed 71% of its required energy from renewable sources.
Financials Of Pricol
| FY 2023 | FY 2022 | FY 2021 | FY 2020 | |
|---|---|---|---|---|
| Revenue (in crores) | 1,927.65 | 15,236.36 | 1,390.32 | 1,200.33 |
| Net profit (in crores) | 112.58 | 43.39 | 14.6 | -212.88 |
| ROE | 12.49% | 4.81% | 2.48% | - |
| ROCE | 14.27% | 8.63% | 9.83% | - |
In the Financial year 2023, Pricol limited saw a substantial increase in revenue by 12.65% to reach 1,927.65 crores as compared to 1,5236.36 crores in FY 22. Analyzing three years, encompassing FY 2021 to FY 2023, the company displayed a good compound annual Growth Rate (CAGR) of 17.11% in revenue.
The company in FY 23 also increased its net profit margin by 259.46% to 112.58 crores as opposed to 43.39 crores in FY 22. This increase in revenue and net profit happened because of an increase in sales volume in both domestic and international levels. At the same time the company was involved in having a better control system as a result it reduced its cost.
In FY 23, Pricol maintained favorable financial metrics with a Return on Equity (ROE) of 12.49% and a Return on Capital Employed (ROCE) of 14.27%.
Future Plans Of Pricol
Pricol Limited is currently developing modular disc brake and BMS ( Battery Management Systems ) products primarily targeted at the electric two – wheeler and EV segments. They expect to start production in Q4 of FY 25, with revenues ramping up from FY 26 onwards as more EV models are launched.
Pricol has integrated Sibros’ connected vehicle cloud solution into their telematics offerings. This integrated telematics/connected vehicle solution is currently under proof-of-concept testing with various OEMs, with production likely starting in Q4 FY’25.
The company is also expecting to launch new driver information systems and instrument clusters for upcoming two-wheeler, passenger vehicle and commercial vehicle models across major OEMs.( Original equipment manufacturers ).
For the electric vehicle segment, Pricol is developing coolant pumps, oil pumps for battery cooling applications, and battery telematics solutions. Some of these products have already been launched with customers like Tata Motors and Ashok Leyland in Q3.
Conclusion
Pricol Limited’s impressive track record speaks volumes. Their consistent revenue growth, coupled with a strong market share in the two wheeler component domain, paints a picture of a company excelling in the present. Beyond these present achievements. Pricol’s commitment to research and development fuels optimism for a future brimming with innovation.
Their dedication to innovation, coupled with their proven track record, positions Pricol Limited for continued success. As a company they are well equipped to navigate the ever changing automotive landscape, ensuring their position as a frontrunner in the two wheeler component industry for years to come. As a viewer how will you position your view on Pricol limited, do share your thoughts in the comments below.
Written by Pavunkumar V M
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