Rico Auto Industries Ltd — Stock Report

Rico Auto Industries is a precision-engineering company specialising in high-precision cast and machined aluminium and ferrous components for automotive OEMs. Their product range includes oil pump assemblies, intake manifolds, flywheels, engine brackets, and other critical metal parts for two-wheelers, passenger cars, commercial vehicles, and EVs. The company supports its customers with integrated capabilities — design, tooling, casting, machining, assembly, testing, and validation. Recent financials show volatility. In Q2 FY26, Rico’s revenue rose ~9% YoY to ~₹628.9 crore, and net profit jumped ~170% YoY to ₹17.35 crore. However, in the March 2025 quarter, consolidated net profit plunged ~52% to just ₹7.43 crore on sales of ₹545.3 crore, highlighting significant margin stress. Over FY 2024–25, its full-year operating income grew only ~2.4%, and net profit declined ~45%. Operating margins fell from ~10.2% to ~8.5%. The net profit margin contracted from ~1.8% to ~1.0%. Rico’s strengths lie in its deep engineering pedigree, long-standing relationships with OEMs, and exposure to both traditional ICE and emerging EV components. The company is actively expanding its EV-relevant business and is tapping newer customers like Maruti Suzuki, BMW, Toyota and Hero. It is also investing in capacity, recently securing land at Hosur to scale up its manufacturing footprint in southern India. On the risk front, the business is highly capital-intensive, and profitability is under pressure from fluctuating export demand, especially in EV parts. The wild swings in quarterly earnings reflect this volatility. Rising input costs (raw metals, energy) and execution risk in scaling new capacity pose additional challenges.