Rico Auto's railway revenue was ₹3-4 cr last year, not the ₹80-90 cr it guided
Management repeatedly claimed railway deliveries were underway. They weren't. Now it's a ₹100 cr FY25 target from a near-zero base.
What's new
- FY24 railway revenue was ₹3-4 cr, not ₹80-90 cr as guided in Nov 2025.
- Q4 FY24 EBITDA margin was 7.1%, missing the 12-13% target management had reaffirmed as recently as Feb 2026.
- FY25 revenue target is ₹3,000+ cr (25% growth) with a new railway target of ₹100 cr.
Themes from the call
Guidance credibility
Management's railway and margin guidance has been repeatedly wrong, and this quarter's disclosures admit the misses without fully explaining the prior claims.
Margin reset
Reported EBITDA margin of 7.1% in Q4 FY24 missed the 12-13% target; the new FY25 guidance is a reset to 'above 10.25%', not a recovery to the original ambition.
Order book
The ₹2,500 cr order book over five years and 40 new program launches across major OEMs provide genuine revenue visibility, even as earlier segment-specific guidance proved unreliable.
Guidance watch
- FY25 revenue target of ₹3,000+ cr, implying 25% growth.
- Railway revenue target of ₹100 cr in FY25, up from ₹3-4 cr in FY24.
- EBITDA margin guidance reset to 'above 10.25%' for FY25, down from the prior 12-13% commitment.
- Exports targeting 32% growth in FY25.
Risk flags
- Railway approvals were delayed for over a year despite management claiming deliveries were underway; execution risk on the ₹100 cr FY25 target is real.
- EBITDA margin miss was significant; the adjustment for one-offs (₹11 cr labor code, ₹19 cr raw material lag) explains some of it, but the target itself was abandoned.
- Net debt is ₹686 cr (3.75x debt-to-equity), with ₹110 cr annual repayment over three years, which constrains flexibility.
Key quotes
-
"For railways, we had just started and the revenue was only about 3-4 crores last year... although we were ready with production for the railways, the approvals took a little longer."
— CFO Naveen Sorot, Jun 2026 call -
"We have a very clear path on getting to the margin of 13%."
— Rico Auto management, Feb 2026 call
The brief
Rico Auto's railway story has collapsed. In November 2025, management said deliveries were underway and guided ₹80-90 cr in railway revenue. By February, they conceded they weren't on track but held the line at ₹60-65 cr. This week, CFO Naveen Sorot admitted the segment generated just ₹3-4 cr in FY24. Approvals took longer than expected. The prior claims of established momentum were wrong.
The margin target went the same way. Management committed to 12-13% EBITDA by Q4 in both prior calls. Actual Q4 EBITDA margin was 7.1%. The new guidance is 'above 10.25%' for FY25, a normalization of what was previously framed as a recovery to peak profitability. The ₹30 cr of one-off charges (labor code and raw material lag) explain part of the gap, but the 12-13% target has been quietly dropped.
The rest of the picture has some genuine strength. Revenue hit ₹2,477 cr in FY24, up 12%, and the ₹2,500 cr order book over five years gives multi-year visibility. Forty new program launches across Toyota, Maruti, and Bosch are ramping. Exports grew to ₹395 cr and are targeting 32% growth in FY25. But the core problem is that management's guidance on two specific fronts, railway revenue and EBITDA margins, was repeatedly stated and repeatedly wrong. The ₹100 cr railway target for FY25 is now the benchmark for credibility. They need to deliver.
Rico Auto's railway and margin guidance was repeatedly stated and repeatedly wrong. The ₹100 cr FY25 railway target is now a credibility test.