An dominant auto ancillary that into exports for luxury vehicles?
Detailed Thread on RACL Geartech🧵
#RACL #raclgeartech
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Detailed Thread on RACL Geartech🧵
#RACL #raclgeartech
👍Like & Retweet for better reach !
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COMPANY OVERVIEW
◦ RACL Geartech Ltd. manufactures transmission gears & Shafts, sub-assembly, precision machined parts and other components for the high end luxury segment.
◦ The company caters mainly to the automotive sector followed by agriculture and industrial sectors.
◦ RACL Geartech Ltd. manufactures transmission gears & Shafts, sub-assembly, precision machined parts and other components for the high end luxury segment.
◦ The company caters mainly to the automotive sector followed by agriculture and industrial sectors.
◦ The company was started as a joint venture between Bharat gears (a Raunaq group enterprise) and PICUP (a U.P Govt. entity) in 1989.
PRODUCTS
◦ Their core competencies are manufacturing transmission gears & shafts which are used to change gears. But there can be various other types for different purposes.
◦ Their core competencies are manufacturing transmission gears & shafts which are used to change gears. But there can be various other types for different purposes.
◦ They are increasing their technology and revenue share into electric vehicles components. These components require high precision and technology for the noise reduction purpose.
REVENUE & GEOGRAPHIC MIX
◦ More than 70% of their revenues comes from exports and majorly exports to Europe.
◦ More than 70% of their revenues comes from exports and majorly exports to Europe.
SEGMENT MIX
CLIENTS
◦ Management has said that no single customer has ever left the company, rather many of them have increased their order value.
◦ Management has said that no single customer has ever left the company, rather many of them have increased their order value.
◦ Nearly 50% of their revenue comes from the 2-wheeler segment where these parts are an integral component of BMW bikes, KTM bikes(KTM 690 & 990 in India), Vespa scooter, etc.
FINANCIALS
FUTURE OUTLOOK
◦ Energy and cost inflation crisis in Europe has raised component costs so those OEMs with in-house production are now looking to outsource from Asia.
◦ Energy and cost inflation crisis in Europe has raised component costs so those OEMs with in-house production are now looking to outsource from Asia.
◦ China had a competitive cost advantage earlier but due to uncertain government policies and rising labor cost, India is a favourable market with the China plus one policy added.
◦ RACL is heavily dependant upon Indian automobile industry which is expected to grow at 6.4% CAGR till 2026
◦ ZF, one of its key customers, announced a purchase of $300 million auto components in FY 23 which will reach $3 billion till 2030.
◦ ZF, one of its key customers, announced a purchase of $300 million auto components in FY 23 which will reach $3 billion till 2030.
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