Rico Auto Industries Ltd – Fundamental and Technical View
Company Overview:
RICOAUTO is one of India’s established auto-ancillary / automotive components manufacturers. The core business is manufacturing and supplying high-precision, fully machined aluminium and ferrous components (castings, machined parts, and assemblies) to global original equipment manufacturers (OEMs) — for two-wheelers, four-wheelers (including passenger cars and commercial vehicles), and more. Their operations are “integrated”: Rico handles the full value chain from design → tooling → casting → precision machining → assembly.
Founder: Arvind Kapur
Founded In:1985
Market Cap: Small Cap with Mkt Cap Rs. 1630(Cr.)
Website: www.ricoauto.com
Sector: Auto ancillaries
Fundamental Analysis:
Rico Auto gets the benefit of the GST rate cut, and it will reflect on the earnings of the company in the future. This is the biggest trigger point for this company
Latest (TTM) revenue ~ ₹22.68 billion; modest revenue growth (≈ +3–4% YoY) in recent times.
Profitability: In FY 2024–25, net profit fell substantially: net margins dropped net profit margin ~1.0% versus ~1.8% previous year.
Balance sheet / leverage: The company has significant debt — debt to equity ratio close to 0.96 (i.e. substantial leverage) as of 2025.
Cash flow: Operating cash flows remain positive, but free cash flow has been negative (capex and working capital seem to outpace operating cash inflow) — a concern.
Returns: Return on Equity (ROE) is low, historically ~ 3–5% range in prior years.
Valuation (as of recent): P/E around 33–36×, P/B ~2.0–2.1×.
Technical View:
A fresh multi-year breakout has been found on the chart with good volume every month. As per price action price closed on a significant high, and a bullish candlestick pattern is identified on the chart. The buying level price is ₹ 112-120, and the stop-loss is at ₹108 on a closing basis. The first target would be ₹140, and the second target would be ₹ 163. This chart expects positive movement for the short-term and medium-term.
Disclaimer: Only for educational purposes no recommendation, before taking the entry please take advice of your financial advisor.