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Pricol Limited reported strong financial results for the fourth quarter of fiscal year 2026. The company saw significant gains from its premium instrument clusters, which made up 60% of its total revenue in FY26. Growth was also robust in the Actuation, Control, Fuel & Mechanical Systems (ACFMS) and P3L plastics businesses.
Pricol's ACFMS division, accounting for 20% of revenue, grew by 30% in FY26 and is focusing on expanding its export market. The company is preparing to launch its new Disc Brakes product line in the first half of FY27, aiming for an initial annual production capacity of 0.5 million units. The P3L plastics business is experiencing high demand but is facing capacity limitations. Pricol is also moving forward with backward integration in displays, with production expected to start within 10-12 months. A partnership with Domino for 2-Wheeler throttles and switches is anticipated to start generating revenue in 18-24 months.
Despite these operational successes, Pricol's profit margins were significantly impacted by rising costs for materials like polymers, aluminum, and semiconductors, as well as higher freight charges. The company faces a six-month delay in passing these increased costs onto Original Equipment Manufacturers (OEMs), which has put pressure on profitability.
Looking ahead to fiscal year 2027, Pricol's management expects limited visibility, slower growth, and continued margin pressure. These challenges are attributed to prevailing macro and geopolitical factors affecting the wider industry. The stock is currently valued at a Price-to-Earnings (P/E) multiple of 24.0x for FY27 estimates and 16.4x for FY28 estimates, based on projected Earnings Per Share (EPS) of ₹23 and ₹33.7, respectively.
Analysts have lowered their earnings growth estimates for the first half of FY27 due to expected margin pressures. Consequently, the target price for Pricol shares has been reduced by 10% to ₹735.