PRECAM - Precision Camshafts Limited Share Price

Management Outlook:
Precision Camshafts Limited (PCL) acknowledges challenging market conditions, particularly in Europe due to economic slowdowns, subsidy pullbacks, and geopolitical tensions. However, management remains optimistic about future growth driven by:

1. New Manufacturing Capacity: The Solapur plants (near completion) for assembled camshafts and EV production will support upcoming projects, including import substitution for Indian OEMs.
2. EV Business Expansion: Focus on electrification of logistics, e-commerce, and waste management vehicles in India. Heavy vehicle electrification projects are underway, with commercialization expected in the next 2"“3 quarters.
3. Subsidiary Stabilization: MEMCO (breakeven) and MFT Germany (stable) are navigating headwinds, while EMOSS (Netherlands) faces delayed demand recovery until early 2026.

Major Points:

• Financial Performance:

  • Standalone Q3 revenue: Rs.143 Cr (down 21% QoQ), net profit: Rs.5.3 Cr (down from Rs.13 Cr).
  • Consolidated income: Rs.195 Cr (down 18% QoQ), net loss of Rs.6 Cr due to European slowdowns.
  • CAM shafts sales volume fell 13% (cast and machined) due to global auto industry slowdown.

• Subsidiaries:

  • MEMCO: Rs.10.7 Cr revenue, marginal profit.
  • MFT Germany: Rs.28.5 Cr revenue, prioritizing non-engine component diversification.
  • EMOSS: Revenue dropped to Rs.12.7 Cr (from Rs.17 Cr) amid subsidy cuts and weak demand.

• Strategic Initiatives:

  • Assembled Camshafts: Serial production started for an Indian OEM; second program (higher volumes) planned.
  • EV Progress: Commercial retrofitting underway in India; heavy truck electrification in development.
  • Market Retention: No loss of customer base despite industry challenges.

• Challenges:

  • Slow EV adoption in India due to fragmented markets and regulatory hurdles.
  • European subsidiaries face prolonged recovery timelines.

Outlook: Management remains committed to growth via localization, new capacity, and EV diversification, anticipating gradual recovery in Europe and scaling of Indian EV projects by FY27.

Question 1 (Gautam Rajesh): What is the status and outlook for the EV business in India and Europe over the next 12"“15 months?
Answer: Europe's EV sector faces severe headwinds due to economic slowdowns, subsidy reductions, and geopolitical conflicts, with recovery expected by early 2026. EMOSS retains partnerships, but revenue growth will lag. In India, slow adoption in logistics/e-commerce is offset by heavy vehicle electrification projects (e.g., trucks), with pilot deployments expected within two quarters. Retrofit challenges persist due to fragmented markets, but fleet-focused strategies aim to scale gradually.

Question 2 (Rajkumar Damania): How is the new Solapur capacity aligned with forward order books, and will segmental revenue breakup be disclosed?
Answer: New Solapur plants target import substitution projects (Indian OEMs replacing foreign suppliers) with minimal risk, as they cater to running engines. Capacity ramp-up (50k"“70k parts/month) will occur over 8"“10 months. Segmental revenue splits (machining/casting) are already in investor presentations; EV retrofitting revenue will be added once volumes justify disclosure.

Question 3 (Vipul Shah): Why did camshaft volumes drop 13%? Are subsidiaries like EMOSS/MFT sustainable?
Answer: Volume declines stem from reduced European, Brazilian, and Mexican demand, not market share loss. Subsidiaries face Europe-wide challenges (bankruptcies, subsidy cuts), but MFT/EMOSS remain self-sufficient and customer-backed. No divestment plans; focus on cost optimization. Assembled camshafts (new Solapur lines) offer higher margins and minimal risk as they replace imports for existing engines.

Question 4 (Shagun Jain): What is the revenue trajectory for EV retrofitting and heavy vehicle electrification?
Answer: Small commercial EV retrofitting has generated revenue since August 2024 (~7"“8 cities), but adoption is constrained by fragmented demand and contractor timelines. Heavy vehicle projects (300kWh battery trucks) with localized components are prioritized due to stronger ROI potential. Revenue growth will accelerate in 12"“24 months as pilots scale and supply chains mature.

Question 5 (Ketan Chheda): Does diversifying into heavy EVs distract from smaller vehicle goals?
Answer: No"”small EV retrofitting is now streamlined (localized supply chain, certifications), enabling parallel focus on heavy vehicles. Customer demand drives both segments. Heavy EV tech (from EMOSS) is adapted for Indian trucks (Bharat Benz, Tata), with revenue expected by 2026. Retrofit capacity can expand via local partners without major capex.