RACL Geartech Ltd Q2FY26 – When BMW’s Gear Supplier Shifts into Turbo Mode While Debt Tries to Catch Up

1. At a Glance

Hold onto your torque wrench, because RACL Geartech Ltd is quietly becoming the desi answer to Europe’s obsession with precision. Incorporated way back in 1983 (when Doordarshan ruled and Maruti 800 was considered luxury), RACL has managed to climb the auto-component ladder and plant its gearboxes into the heart of BMW, Kubota, KTM, Schneider Electric, and other global biggies.

As of November 2025, the company trades at ₹1,077 per share with a market cap of ₹1,273 crore, a P/E of 36.7, and a Book Value of ₹278. With ROCE at 12.5% and ROE at 12%, it’s not exactly setting Dalal Street on fire, but hey, not every gear is meant for speed—some are for torque.

The latest Q2FY26 results show revenue of ₹122.84 crore, EBITDA of ₹29.79 crore, and PBT of ₹16.13 crore. Quarterly profit zoomed to ₹12 crore, marking a 141% YoY growth—basically the kind of acceleration even BMW would admire. But before you cheer, remember the company still carries ₹230 crore of debt—that’s like driving a racecar with a trailer attached.

2. Introduction

Imagine a small-town Uttar Pradesh-based manufacturer sending precision gears to Germany, Japan, and Austria. Now imagine those gears being used in BMW motorcycles, KTM racing bikes, Kubota tractors, and Schneider Electric systems. That’s RACL Geartech for you—a company that has turned “Made in India” into “Mounted in BMW.”

From a humble machine shop in Gajraula to having warehouses in Europe, RACL has gone from a “tier-3 supplier” to “Project Titan”—a codename that sounds like a Marvel movie but is actually their electric car parts project for BMW’s next-gen sports EV. Yes, the same BMW that thinks the 0–100 km/h mark is just a warm-up.

But behind the gloss lies the grind: RACL’s operations are working capital hungry, their top five customers make up ~60% of sales, and one customer alone accounts for 15% of FY23 revenue. So, while BMW’s EVs may glide smoothly, RACL’s balance sheet definitely hits a few speed breakers.

Still, when your client list reads like a Geneva Motor Show brochure, you’re clearly doing something right.

3. Business Model – WTF Do They Even Do?

Let’s decode RACL’s secret sauce. The company manufactures transmission gears, shafts, precision machined parts, and chassis components for everything from two-wheelers to electric sports cars. Basically, if it moves, RACL probably has a gear in it.

Their 22 active customers include blue-blood OEMs like BMW Motorrad, Kubota, KTM, and Schneider Electric. They serve eight different vehicle categories, from two-wheelers (46% of revenue) to EVs (4%), and export nearly 70% of their production—mostly to Europe (73%).

Their manufacturing mojo lies in gear cutting, aluminium machining, laser welding, process R&D, and a fetish for ISO certifications—ISO 9001, 14001, 45001, 27001, and even TISAX (for secure data handling). That’s five certifications—more than most engineering students have backlogs.

And to top it off, their Project Titan aims to supply the Parking Lock Mechanism for BMW’s