Pritika Auto Industries has signed a Memorandum of Understanding (MoU) with Spark Grid Private Limited for a 25-year solar power supply arrangement. The agreement aims to generate estimated savings of ₹110 crore for the Pritika Group of Industries over the tenure.

The deal was announced on August 27, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The long-term partnership is designed to improve operational efficiency and increase the share of renewable energy in the group’s power mix.

Deal Structure and Savings

The savings from the solar power arrangement will be distributed across group entities. Pritika Engineering Components Limited and Meeta Castings Limited are expected to benefit from approximately ₹70 crore in savings. Pritika Auto Industries Limited will account for the balance savings over the 25-year period.

To execute the project, a Special Purpose Vehicle (SPV) will be established. Pritika Engineering Components Limited is expected to hold 26% equity in the SPV on behalf of the group, subject to regulatory approvals and documentation completion.

Management Commentary

Harpreet Singh Nibber, Chairman and Managing Director, stated that the arrangement marks a significant step in enhancing energy efficiency. He noted that the competitive tariff rate over 25 years is expected to result in the projected ₹110 crore in savings. The SPV structure allows the group to participate in renewable energy opportunities while supporting its sustainability agenda.

What the Numbers Show

The allocation of savings reveals a concentration of cost benefits within the manufacturing subsidiaries. With ₹70 crore of the total ₹110 crore savings attributed to Pritika Engineering Components Limited and Meeta Castings Limited, these entities are expected to capture approximately 64% of the financial benefit. This suggests that the solar power supply will primarily target the high-energy consumption units of the group, potentially improving margins for its precision machining and casting operations more significantly than for the parent company.

Pritika Auto Industries reported consolidated revenue of ₹144.97 crore for the first quarter of FY27, reflecting a 26.5% year-on-year growth compared to ₹114.61 crore in Q1FY26. The company also achieved its highest-ever monthly dispatch in July 2026, reaching approximately 4,800 metric tonnes.

The top-line expansion was supported by healthy demand from its existing customer base, improved business volumes, and the continued execution of ongoing programs. This operational milestone highlights the scale-up of manufacturing capabilities and efficient execution against customer requirements.

Consolidated earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at ₹19.50 crore, up 11.8% year-on-year. Net profit after tax (PAT) increased by 16.7% to ₹7.11 crore. On a standalone basis, revenue reached ₹141.68 crore, up 24.6% YoY, with PAT at ₹4.13 crore, marginally higher than the previous year’s ₹4.09 crore.

Operational Milestones and New Orders

Management highlighted significant business development activity during the quarter:

• Secured an order from KION USA, with sample submission expected in August 2026 and regular production slated for November 2026, subject to qualification approvals.
• Received repeat and incremental orders from established domestic customers including Mahindra & Mahindra Swaraj and CNH Industrial.

Margin Dynamics and Cost Pressures

Despite robust revenue growth, margins faced headwinds due to higher raw material prices effective from March and June, alongside increased costs for chemicals and industrial gases.

Chairman and Managing Director Harpreet Singh Nibber noted that the company has received partial customer compensation for these cost increases and expects substantial recovery in the coming quarter, which should support margin normalization.

What the Numbers Show

The divergence between revenue growth (26.5%) and EBITDA growth (11.8%) indicates that cost inflation outpaced pricing power or volume leverage in the quarter. However, the sequential improvement in revenue (up 4.7% from Q4FY26) combined with record monthly dispatches suggests that operational momentum is accelerating, potentially setting the stage for better margin realization as utilization scales and compensation kicks in.

Capacity Expansion and Future Outlook

Pritika Auto is focusing on scaling up its Lost Foam Casting (LFC) plant, where technology development has been stabilized over the past three years. The company expects the LFC plant to achieve approximately 65% to 70% capacity utilization by the end of FY27, contributing progressively to overall profitability.

With an installed capacity of 72,000 tonnes per annum across five plants in Punjab and Himachal Pradesh, the company aims to reach 100,000 tonnes in the medium term. Management emphasized continued focus on improving operational efficiencies, enhancing product mix, and expanding presence in high-growth automotive segments, including electric and hybrid mobility opportunities.