Rolex Rings Limited Q3 FY26 Earnings Call Summary

Summary

Rolex Rings Limited - Q3 FY26 Earnings Call Summary Tuesday, February 10, 2026 4:00 PM IST

Event Participants

Executives 3 Hardik Dhimantbhai Gandhi (Company Secretary), Hiren Doshi (Management Representative), Manish Madeka (Chairman & MD), Mihir Madeka (Management Representative)

Analysts 4 Amar (Individual Analyst), Jason Jones (Individual Analyst), Kush Nahar (Individual Analyst), Saurabh Jain (Individual Analyst)

Financials & KPIs

Geographic & Segment Commentary

• US Market: Revenue declined 10% QoQ and is down approximately 30% compared to FY25 annualized. Performance was severely impacted by the “Russian oil penalty” tariffs (53% total duty), which have recently been revised downward to an expected 18%-28% range.
• European Market: Export revenue to Europe improved 10% QoQ and is up 25% compared to FY25 full-year averages. Management noted positive traction from the Europe-India FTA, with customers exploring more value-added sourcing from India.
• Domestic Bearing Rings: Recorded ₹95.37 crores in Q3, reflecting ~30% YoY growth. Growth is driven by increased wallet share with 3-4 major domestic players and new production capacities coming online in Gujarat.
• Auto Components Segment: Now accounts for 48% of component revenue with a 22%-25% EBITDA margin. Growth is supported by EV/Hybrid vehicle applications which require higher precision and multi-operation value addition.

Company-Specific & Strategic Commentary

• Tariff Normalization: The US-India tariff deal reduced duties from 50%+ to an expected 18%, following the removal of the Russian oil penalty in Nov 2025. Management expects the US market to “U-turn” starting Q1FY27 as the current “wait and watch” sentiment among customers clears.
• Order Book & SOPs: Roughly 60% of the planned ₹175 crore new program volume has commenced. While some US programs were deferred due to tariff uncertainty, new customer wins in Mexico and the US are scheduled for SOP in mid-to-late FY27.
• Capacity Expansion: Current achievable capacity stands at 105,000 to 115,000 MTPA. Management plans to double revenue by 2030 by shifting focus toward more complex auto components and increasing asset utilization.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Tariff Clarification

• Question: What is the current status of the US tariff reduction from 53% to 18%? (Jason Jones)
• Answer: Until Oct 31, it was 53%. From Nov 1, it dropped to ~25% plus surcharges (~28%). We are waiting for the fine print on HSN codes to confirm if it drops to 0%, 18%, or stays at 25% for specific parts. (Hiren Doshi)

Order Book Visibility

• Question: What is the projected revenue from new programs in FY27? (Saurabh Jain)
• Answer: We expect ₹180 to ₹200 crores in additional revenue from new programs in FY27 as deferred orders from US and European customers finally ramp up. (Hiren Doshi)

Promoter Share Pledging

• Question: Why has the promoter pledged shares for the first time? (Manish)
• Answer: The pledge is small, involving less than 5% of promoter holdings (2.7% of total equity). It was done to raise funds for a committed investment and is expected to be squared up in 3-6 months. (Hiren Doshi)

Segment Margins

• Question: How do margins compare between bearing rings and auto components? (Saurabh Jain)
• Answer: Auto components typically yield 22-25% net EBITDA due to complexity, while bearing rings range between 18-22%. (Hiren Doshi)

Key Takeaway

Rolex Rings reported a steady Q3 FY26 with revenues of ₹273.37 crores, as strong growth in the domestic bearing segment (+30% YoY) and European exports offset a significant 30% annualized decline in the US market caused by punitive tariffs. Management maintained healthy net EBITDA margins of 21%, benefiting from a shift toward higher-margin auto components for EV/Hybrid applications. Strategically, the company is pivoting toward FY27 as a recovery year, buoyed by the recent US-India tariff deal which is expected to lower duties to 18%, potentially unlocking deferred orders. With a target to increase capacity utilization from 62% to 75% and an order book forecast of ₹330 crores for Q1FY27, Rolex Rings aims for 15-18% topline growth in the next fiscal. Investors should monitor the final HSN-level tariff notifications in the US and the resolution of the legacy ROR interest matter with bankers.