RACL Geartech Ltd., an automotive components manufacturer supplying products to customers including Royal Enfield and Kawasaki, reported its highest-ever annual revenue in FY26, aided by export demand and improved operating performance.
The company is also adding new programs across conventional and electric vehicles, while expanding relationships with existing customers.
Record FY26 performance
RACL Geartech reported consolidated revenue of Rs. 512.42 crore in FY26, up 20.6 percent from Rs. 424.99 crore in FY25.
Other key numbers included:
- EBITDA: Rs. 129.16 crore, up 36 percent
- EBITDA margin: 25.2%, compared with 22.3% in FY25
- Profit before tax: Rs. 65.73 crore, against Rs. 32.8 crore a year earlier
- PBT margin: 12.8%, up from 7.7%
- Standalone PAT: Rs. 46.56 crore
- PAT margin: 9.3%, compared with 5.96% in FY25
Operating cash flow for the year rose nearly 30 percent to Rs. 81.77 crore.
Strong March quarter
Q4 FY26 also saw strong growth.
On a consolidated basis:
- Revenue increased 48.2 percent to Rs. 136.69 crore
- EBITDA rose 41.1 percent to Rs. 34.08 crore
- Profit before tax jumped 91.5 percent to Rs. 16.91 crore
Debt levels decline
The company reduced debt during the year.
Key balance sheet metrics improved:
- Total debt fell 25.5 percent to Rs. 221.82 crore
- Debt-to-equity ratio declined to 0.63 times from 1.30 times
- Debt-to-EBITDA dropped to 1.75 times from 3.09 times
- Interest coverage improved to 4.26 times
- Debt service coverage ratio rose to 1.74 times
- Return on equity increased to 16.03 percent
RACL has earmarked Rs. 77.45 crore of capital expenditure for FY27.
Exports remain the biggest contributor
Exports accounted for around 75 percent of consolidated revenue.
Revenue mix during FY26:
- Exports: Rs. 346.68 crore
- Domestic business: Rs. 110.2 crore
Among export markets:
- Europe contributed 69%
- India and Asia-Pacific accounted for 29%
- USA and Canada made up 2%
Revenue by segment
The company’s revenue came from multiple end markets.
Break-up by segment:
- Two-wheelers: 30%
- Commercial vehicles: 20%
- Recreational vehicles: 18%
- Passenger cars: 13%
- Tractor and agriculture: 10%
- Industrial products: 5%
- E-mobility and others: 1%
Royal Enfield and Kawasaki programs
RACL received a fresh nomination from Royal Enfield for engine gears, in addition to its existing transmission gear business.
The company said product development is underway and production will begin after sample approvals.
With Kawasaki, RACL secured nominations for 15 components covering:
- Motorcycle platforms
- General Purpose Engine applications
- Existing 175cc motorcycles
Among these:
- Production has begun for one component.
- Pilot lots for nine components have been submitted, with October 2027 SOP planned.
- Five components remain under development, with January 2027 SOP targeted, subject to approvals.
New orders from ZF and BRP Canada
The company also entered new segments.
ZF
RACL received a nomination for electric power steering components for commercial trucks in North America.
Prototype validation is nearing completion and start of production is expected in FY28.
BRP Canada
The company secured an order for shift drums, marking a new product category.
Highlights include:
- Annual volume target of 1.5 lakh parts
- Initial sample approvals completed
- Commercial production expected in Q2 FY27
EV programs move toward commercialization
Three EV-related projects are progressing toward production.
Project Titan
- More than 2,500 sets dispatched
- Process approval received
- Mass production expected in October 2026
Project Venus
- Over 4,000 sets dispatched
- Supplies drivetrain components for an electric sports car
- Commercial production targeted for October 2026
Project Crystal
- Focused on electric power steering components
- Around 600 sets undergoing customer validation
- Program linked to a pickup truck platform of a U.S. passenger vehicle OEM
Outlook
RACL enters FY27 with lower debt, higher profitability and a pipeline spanning Royal Enfield, Kawasaki, ZF, BRP Canada and American OEMs.
Several projects are scheduled to enter production over FY27 and FY28, which could support future earnings growth.
TL;DR:
RACL Geartech posted record FY26 revenue and profit while reducing debt. The company strengthened ties with Royal Enfield and Kawasaki, secured new orders from ZF and BRP Canada, and is preparing to commercialize multiple EV programs.
AI summary:
- FY26 revenue rose 20.6% to Rs. 512.42 crore.
- Debt declined 25.5%, improving leverage ratios.
- Royal Enfield and Kawasaki awarded new component programs.
- ZF and BRP Canada added new business opportunities.
- Three EV projects are expected to enter production from October 2026 onward.
