🔧 Precision Camshafts Ltd – 70% Market Share in India, 9% Global, Yet Still Idling at Low ROE?
1. At a Glance
Imagine being the engine’s spine but still earning chillar margins. Precision Camshafts, the Solapur-born company that makes camshafts for half the cars you see on Indian roads, owns 70% domestic market share. Globally, it’s at 9%—not bad for a smallcap. Yet, profits barely move, Europe is coughing diesel smoke, and the much-hyped e-mobility subsidiary EMOSS looks more like “E-Mess.” Market cap is ₹1,628 Cr, share price ₹171, and return ratios so weak they wouldn’t qualify for a second-hand Activa loan.
2. Introduction
This company has a classic auto-ancillary DNA: start with a boring-but-essential product, scale quietly, then one fine day announce an “EV transition” to sound sexy to investors. Precision Camshafts was incorporated in 1992, became a global supplier of camshafts (the things that control your car’s valves—no camshaft, no vroom), and then went shopping in Europe.
The strategy? Three legs on the stool:
Camshafts – the dependable old workhorse.
MEMCO – fuel injection bits (because diesel still isn’t dead in Bharat).
EMOSS – the shiny Dutch EV arm that converts trucks to electric and promises payloads up to 50 tons.
But here’s the twist: camshafts are still 87% of revenues. MEMCO and EMOSS together are barely 13%. Europe is bleeding. India is holding the fort. And yet valuations are running at 46x earnings, which is like paying iPhone Pro prices for a Micromax.
3. Business Model – WTF Do They Even Do?
Camshafts & Assemblies (87%): 150+ varieties, chill-cast, ductile iron, hybrids, assemblies—you name it, they cast it. Domestic OEM share = 70%, global = 9%. Plants in Solapur, Nashik, Germany, Netherlands. FY24 casting volume 6.98 Mn units, machining volume 2.97 Mn units.
EMOSS (8%): EV drivelines for trucks, buses, military. Conversion kits = ₹5–6 lakh per LCV, ₹70–80 lakh for heavy trucks. Sounds fancy, but revenues actually declined by 15% in FY22–24 thanks to Europe’s recession hangover.
MEMCO (5%): Fuel injection components. Revenue declining slightly, but still profitable.
Geo Mix: India 39% (rising), Europe 34% (falling), RoW 27% (rising). In short: Bharat > Brussels.
Question: If you had 70% market share in India already, where would you grow—Mars?
4. Financials Overview
Metric
Latest Qtr (Q1 FY26)
YoY Qtr (Q1 FY25)
Prev Qtr (Q4 FY25)
YoY %
QoQ %
Revenue (â‚ą Cr)
195
225
190
-13.3%
+2.6%
EBITDA (â‚ą Cr)
41
23
26
+78.3%
+57.7%
PAT (â‚ą Cr)
18.8
12
40
+56.7%
-53.0%
EPS (â‚ą)
1.98
1.22
4.26
+62.3%
-53.6%
Annualised EPS = 1.98 × 4 = ₹7.9 At CMP ₹171 → P/E = 21.7x (better than screener’s 46x because that was using TTM with one-off).
Detective note: Quarterly numbers are bouncing like a suspicious balance sheet—one quarter profit doubles, next quarter it halves.
5. Valuation – Fair Value Range
P/E Method Industry PE ~27. EPS = ₹7.9. Fair P/E range 18–25x = ₹142–₹198.
Disclaimer: Educational only, not investment advice.
6. What’s Cooking – News, Triggers, Drama
Q1 FY26 profit revival: From ₹-34 Cr loss last quarter to ₹25.6 Cr standalone profit. Management says “cost control.” Translation: No impairments this time.
EV orders: Retrofitting fleets in Pune/Nagpur/Mumbai. Size ~₹5–10 Cr. Honestly, pocket
