Auto parts makers usually live and die by two things, how many vehicles get sold and how much their raw material costs. Lately both have been pulling in different directions. Demand from two-wheeler and commercial vehicle makers stays strong, but war in West Asia, a weak rupee and costlier freight are eating into what companies keep. So which ones handle that squeeze better is what investors are watching.
Pricol is a Coimbatore-based auto parts maker. It runs three businesses: driver information systems and connected vehicles, which covers instrument clusters, switches and disc brakes business, and a plastics business making polymer components. Customers include Tata Motors, Honda, Suzuki and Royal Enfield, plus commercial and off-road vehicle makers. Manufacturing is mainly in India and Indonesia. It’s been pushing hard into new products lately, with switches and disc brakes as the recent additions.
Pricol shares closed at ₹739.00, down 1.39% from the previous close. The company has a market cap of ₹9,007 crore, and the stock has traded between ₹500.30 and ₹822.35 over the last 52 weeks. Its consolidated P/E is 33.62.
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Sales Grew Fast, But Margins Took The Hit
Pricol’s consolidated revenue for the June 2026 quarter came in at ₹1,083.58 crore, up 23.46% from a year back. EBITDA, which is simply operating profit before interest, tax and depreciation, was ₹123.69 crore, a margin of 11.41%. Profit after tax stood at ₹67.02 crore, with earnings per share of ₹5.50.
Here’s the odd part. EBITDA grew only 21.42%, slower than sales, yet profit after tax jumped 34.34%. Bottom line ran faster than the operating line, so it’s worth a closer look in the next results.
Costs Piled Up From Outside
Management blames the squeeze on things outside its hands. Plastic raw material got costlier, cooking gas prices shot up, freight went higher, and minimum wages rose sharply in three states where it runs plants. The wage hike alone adds around ₹21 crore a year. The company calls this delayed money, not lost money, because carmaker contracts carry indexation, which just means prices get adjusted later for cost changes.
Around 75% of revenue should see some relief in the September quarter, and the rest by December. The catch is the rupee, which is at an all-time low, and the company imports lots of electronic chips. Its comfortable margin range is 12.5% to 13%, and it says about 1.5% was lost this time.
The Plan To Split The Business
The bigger story is the proposed demerger, where the driver information and connected vehicle business, which makes instrument clusters (the dashboard display showing speed and fuel), gets separated into its own company. The reason given is money and partners. That business needs big investment and possibly technology partners, and that’s hard to get when three different businesses sit in one company.
The process will take at least four quarters, though the company hopes for 12 months, and from October the divisions will run like separate entities inside. Its share is strong, around 30-35% in two-wheeler clusters and roughly two-thirds in commercial vehicles, but only 8-9% in passenger vehicles. Colour TFT screens are only in 7-8% of two-wheelers right now, and that’s expected to double in two to three years.
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Big Spending Ahead
The company has lined up a ₹700 crore capex over the next 18 to 24 months. About ₹400 crore goes to the plastics side, which is capacity-starved, so turnover capacity is meant to go from about ₹1,000 crore to ₹2,000 crore. Roughly ₹150-180 crore is for clusters and ₹120 crore for the ACFMS business, which makes switches and disc brakes.
Five new plants are coming. Disc brakes and switches only start mattering from FY28, and acquisitions are paused for a year. The ₹8,000 crore target for FY31 stays. Two-wheeler sales grew 28% against industry 23%, so the company is winning share, though the plastics arm made just 7.8% EBITDA margin on ₹249 crore revenue, below the group average. Capex is heavy, so return on capital in plastics will stay low for a while before settling at 16-18%.
Bottom Line
Sales are moving well ahead of the industry and new business wins look healthy, but margins are the weak spot for now, and they depend a lot on the rupee, crude oil and chip prices. If price adjustments come through as promised, margins could improve over the next two quarters. The demerger, heavy spending and long timelines add some risk too. For a watchlist, the things to track are margin recovery in the September and December quarters, demerger progress, and how fast the new plants start.