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1. At a Glance
For the quarter ended June 30, 2026, RACL Geartech reported sales of ₹127.63 crore against ₹99.91 crore a year earlier, operating profit of ₹31.81 crore against ₹18.76 crore, and net profit of ₹8.77 crore against ₹8.29 crore. Operating margin came in at 24.92%, the highest of the ten quarters on the sheet.
The gap between an operating profit that grew by ₹13.05 crore and a net profit that grew by ₹0.48 crore has three residents. Interest of ₹6.14 crore. Depreciation of ₹9.20 crore, the first time that line has crossed ₹9 crore. And a tax rate of 47.36% on profit before tax of ₹16.66 crore — the previous nine quarters ran between 25.10% and 28.06%, so the tax line picked this particular quarter to try something new.
Other Income, which had been on a run of ₹8.05 crore, ₹5.56 crore, ₹3.20 crore and ₹5.43 crore across the preceding four quarters, arrived at ₹0.19 crore. Nineteen lakh. It turned up, signed the register, and left.
Behind the quarter sits an FY26 in which standalone revenue reached ₹500.22 crore, total debt fell from ₹297.59 crore to ₹221.82 crore, and a preferential issue of 10,06,480 shares raised ₹80 crore from institutional buyers. Management’s budget for FY27 stands at ₹565 crore.
2. Introduction
RACL was incorporated in 1983 as Raunaq Automotive Components Limited, promoted by the Raunaq Group. Per CARE Ratings, financial difficulties took the company to the Board for Industrial and Financial Reconstruction in 2001, and it emerged from BIFR purview in November 2007 under a new management team led by Gursharan Singh, Chairman and Managing Director. Not many listed auto ancillaries have a restructuring case file in the origin story and a BMW nomination letter in the current one.
The company makes transmission gears and shafts from two units in Uttar Pradesh — Gajraula and Noida — and has held a wholly owned Austrian subsidiary, RACL Geartech GmbH, since acquiring 100% of its shares. That subsidiary contributed ₹8.19 crore of revenue and ₹3.11 crore of net profit to the group for the June 2026 quarter, per the auditor’s review report, which also notes the auditors consider it not material to the group. A 38% net margin on a warehouse-and-logistics arm is the kind of arithmetic that gets described as immaterial only in a country where the parent does ₹500 crore.
Recent record: NSE listing commenced November 2024, having lived on BSE alone for four decades. Bhumi pujan for a new manufacturing facility in May 2025. An ₹80 crore preferential allotment at roughly ₹795 a share in May 2025 to Malabar India Fund, White Oak Capital Group entities and Dr. Aniruddha Malpani. A long-term supply order for transmission gears for premium motorcycles from an Indian OEM in August 2025. An interim dividend of ₹1.50 a share declared in February 2026.
Headcount went from 752 to 1,200 across FY25 and FY26. Active customers moved 22 to 29. SKUs went 900 to 1,600+ — the company added roughly 700 distinct part numbers in a year, each of which requires its own tooling, its own drawing, and its own place on a shelf.
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3. Business Model: WTF Do They Even Do?
They cut gears. Very precisely, in enormous variety, mostly for people who live somewhere else.
The product range covers transmission gears and shafts, precision machined parts, chassis parts, sub-assemblies, and industrial gears for electrical switchgear, circuit breakers, winches and cranes. Applications run across two-wheelers, three-wheelers, passenger cars, commercial trucks, ATVs, agricultural equipment and industrial gearboxes. The clientele reads like an airport departure board: BMW Motorrad in Germany, KTM AG in Austria, Kubota in Japan, Thailand and the USA, Schneider Electric in Germany, Dana in Italy and China.
The FY26 mix, per the investor presentation: exports 75%, domestic 25%. By geography, Europe 69%, India and Asia Pacific 29%, USA and Canada 2%. By segment, two-wheeler 30%, commercial vehicle 20%, recreational vehicle 18%, passenger car 13%, tractor and agriculture 10%, industrial products 5%, three-wheeler 3%, e-mobility and others 1%. The COO characterised the two-wheeler share going from roughly 40–45% historically to 30% as other segments growing faster rather than any segment shrinking — which is the correct and also the only way to describe a denominator getting bigger.
The working-capital design is the part worth understanding. Per CARE, the company holds around 3.5 months of inventory across a large product range, extends about two months’ credit to domestic customers, waits three to four months for overseas collections, and takes up to 1.5 months from suppliers — which it has been shortening deliberately to capture cash discounts. Net working capital cycle: roughly five months. RACL is, in a structural sense, a company that finances European OEM inventory from Uttar Pradesh.
Capital only moves after paperwork. Per CARE, the company invests against nomination letters covering a component’s entire vehicle life, machines are largely imported with delivery periods up to 12 months, and prototype-to-production typically spans two to three years. Management put it as: RACL will never
