Rolex Rings Targets Growth Europe Domestic Expansion

Ashwin Thakker

— 2 min read
  • FY26 Revenue Growth: Projected early teens, with potential for 15-16% contingent on US tariff clarity.
  • EBITDA Margin: Expected 23-25% (gross), 21-22% (excluding other income) for FY26.
  • New Order Pipeline: Approximately 170-175 crore, with 25-30% from US currently on hold.
  • Europe Contribution: Increased to 20% of revenue; 50% of new programs are Europe-focused.
  • Domestic Market: Expected to see continued growth and opportunities.
  • FY26 Capex: Approximately 30-35 crore.

Rolex Rings navigates a dynamic global landscape, with its Q1 FY26 earnings call highlighting strategic adaptations. The company anticipates an "early teen growth" in FY26, potentially reaching 15-16% pending US tariff resolutions. Domestic and European markets are poised for significant expansion, driving future performance despite export headwinds. This analysis explores Rolex Rings' forward-looking guidance on sales, margins, and market shifts.

Strategic Market Shifts and Revenue Prospects

Rolex Rings is strategically recalibrating its market focus amidst evolving global trade policies. US tariff uncertainties have placed approximately

25 to 30% of new orders

(Mr. Hiren Doshi, 43:23) on hold, with management anticipating clarity on this by September or October. Despite this, the company is strongly bullish on European and domestic market expansion. Europe's revenue contribution has significantly surged from 14-16% to about 20% recently, with

50% for Europe only

(Mr. Manesh Madeka, 3:35) of new programs targeted there. The domestic market also shows robust traction and is expected to grow, offsetting potential export slowdowns. A solid

order book broadly in the range of 110 to 120 crore on a monthly basis

(Mr. Hiren Doshi, 24:33) underpins future revenue projections. These market shifts are crucial for achieving overall growth.

Margin Stability and Investment Strategy

Despite market fluctuations, Rolex Rings aims for consistent profitability. The company projects EBITDA margins in the range of

23 to 24 percentage

(Mr. Hiren Doshi, 28:48) gross, or

21 to 22 percent

(Mr. Hiren Doshi, 29:42) when excluding other income. This commitment to stable margins extends to new domestic business, including EV and hybrid segments. Management notes that marginally lower margins might be accepted for existing business to gain scale, but overall profitability will not be negatively impacted. The company maintains a financially sound position, being

net debt negative

(4:0) with good cash flows. For FY26, capital expenditure is estimated at

30 to 35 crores

(Mr. Hiren Doshi, 38:47). This investment supports capacity enhancements for high-demand automotive products, ensuring readiness for anticipated growth, even with current overall capacity utilization around 62-64%.

Rolex Rings projects a resilient FY26 and stronger FY27, driven by a strategic pivot towards robust domestic and expanding European markets. While awaiting clarity on US tariffs, the company's focus on auto components and sustained EBITDA margins provides a stable outlook. Committed capital expenditure and a strong order book position it for future growth, balancing short-term challenges with long-term opportunities. The company aims for factual and steady progress.

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