RACL Geartech FY26 revenue hits ₹512 cr; EBITDA at 25%

Record FY26 revenue milestone

RACL Geartech Ltd (BSE: 520073) reported its highest-ever consolidated revenue of ₹512.42 crore for FY 2025-26, marking a 20.57% year-on-year increase. The company also reported standalone revenue of ₹500.22 crore for the year. The performance was led by export demand, which remained the dominant contributor to sales. Management commentary in the shared notes also pointed to improved operating efficiency alongside growth.

Profitability improved as margins expanded

The company reported a rise in EBITDA margin from 22.34% to 25.21% (as cited in the provided notes). On the standalone business, EBITDA rose 31.31% to ₹126.35 crore, with margins improving to 25.26% from 22.52%. Consolidated EBITDA for FY26 was reported at ₹129.16 crore. Profit before tax on the standalone entity increased 83.70% to ₹63.14 crore, while cash generation from operations grew 29.98% to ₹81.77 crore.

Export-led model remained intact

RACL’s revenue base continued to be export-heavy. Exports made up 75% of FY26 standalone sales, while domestic sales contributed 25%. In the geographic mix, Europe was described as the dominant region at 69% of the revenue mix, followed by India and Asia Pacific at 29% and the USA and Canada at 2%. The notes also list standalone FY26 exports at ₹336.11 crore and domestic revenue at ₹110.20 crore.

Debt reduction improved leverage metrics

The company reduced total debt by 25.46% to ₹221.82 crore for FY 2025-26, according to the provided data. It also reported an improvement in the debt-equity ratio from 1.3 times to 0.63 times. This reduction was presented alongside the broader theme of improved operational efficiency.

New nominations add future revenue visibility

RACL reported multiple project wins and nominations across global OEMs. It secured nominations for 15 new components from Kawasaki, with SOP for one component already started. The company also received a nomination from ZF for steering components in commercial trucks for the North American market, with SOP expected in FY 2027-28. In addition, it received a nomination for shift drums for ATVs from BRP Canada, described as an entry into shifting mechanisms.

Royal Enfield and Kawasaki among high-volume projects

Alongside global nominations, the shared notes also mention new high-volume projects with clients such as Royal Enfield and Kawasaki. These wins were positioned as supportive of future growth potential. The updates also referenced project names such as “Project Titan” and “Project Venus” as part of the company’s move into new facilities and EV-linked components.

EV positioning: focus on reduction gearboxes

A management clarification attributed to Gursharan Singh stated that EVs use reduction gearboxes rather than automatic transmissions. RACL’s involvement in projects such as BMW’s electric car, which uses reduction gearboxes, was highlighted as a strategic foothold in EV-related components. The information points to product relevance as OEMs expand electrification programs.

Q4 FY26: strong YoY growth, weaker QoQ

For Q4 FY 2025-26, the company reported total revenue of ₹131.66 crore, up 50.83% year-on-year but down 4.12% quarter-on-quarter versus ₹137.32 crore in Q3. Operating profit for the quarter was ₹20.39 crore, up 81.45% YoY, while PAT was ₹12.35 crore, up 89.92% YoY. Operating margin was listed at 15.49% in the Q4 highlights section, while another data point in the notes cited EBITDA margin at 22.21% for the quarter.

Key numbers at a glance

Market impact and what investors tracked

The combination of record FY26 revenue, higher margins, and lower leverage is typically the set of metrics investors watch in auto ancillary companies with export exposure. At the same time, the quarter showed that profits can be volatile on a sequential basis, with QoQ declines in revenue and PAT despite strong YoY growth. The updates on SOP timelines, particularly ZF’s SOP expected in FY 2027-28, provide a clearer window for when some new nominations may begin contributing meaningfully.

Why the FY26 update matters

The FY26 data highlights two clear drivers: export concentration and operating leverage from scale, reflected in margin improvement. The debt reduction and debt-equity improvement from 1.3 times to 0.63 times addresses a common concern for capex-heavy manufacturing businesses. The nominations across Kawasaki, ZF, and BRP Canada also broaden the product mix beyond a single platform cycle, though the ramp-up depends on SOP schedules already outlined in the notes.

Conclusion

RACL Geartech closed FY 2025-26 with record consolidated revenue of ₹512.42 crore, stronger EBITDA margins, and a materially lower debt position. The company also added fresh OEM nominations, with some programs already in SOP and others slated for later start dates such as FY 2027-28. Going ahead, the next key checkpoints will be execution on these SOP timelines and how planned capex, if any, interacts with the improved leverage profile cited in the update.