Chennai: Auto component manufacturer Pricol Ltd is set to launch a new investment cycle, planning to allocate between Rs 680 crore and Rs 700 crore in fiscal year 2027. The funds will be used to expand capacity and execute a robust pipeline of new business wins, even as geopolitical tensions in West Asia exert pressure on the automotive industry and the global economy.
New Capex Cycle Begins
“We are starting our next major capex cycle this year as our previous cycle has come to an end and capacity utilisation has reached peak levels,” said Managing Director Vikram Mohan during the company’s Q4FY26 earnings call. The proposed investments will be directed towards new plants, machinery, and capacity creation across Pricol’s divisions, including automotive controls, fluid management systems, polymers, and driver information and connected vehicle solutions. Mohan noted that capacity constraints in the plastics business have already begun limiting growth opportunities.
R&D Commitment Continues
Pricol, one of the largest spenders on research and development in the Indian auto component sector, allocates about 4.5% of its revenue to R&D. Mohan emphasised that the company would continue investing in technology and new product development to strengthen its competitive position.
Geopolitical and Cost Challenges
The investment announcement comes at a time when the automotive sector faces mounting cost pressures due to the ongoing West Asia crisis. According to Mohan, polymer prices have risen by about 55%, aluminium prices by 62%, semiconductor costs by 35%, and memory control device prices by 28%. Both inbound and outbound freight costs continue to escalate, while the depreciation of the rupee has further compounded the pressure on manufacturers.
No Curtailment of Growth Investments
Despite the challenging environment, Pricol, which reported a total income of Rs 4,053 crore in FY26, has decided against scaling back its growth investments. “We are not scaling back on any investments whatsoever of a capital nature that could hamper the medium- and long-term prospects of the company,” Mohan said.
However, he cautioned that “there will be some softening of earnings and slower growth across the automotive sector in the near term. This is not just the voice of Pricol, but of the industry as a whole.”
