Precision Camshafts plans 100% acquisition of Nashik’s Memco this year

The Maharashtra-based Precision Camshafts (PCL), which manufactures chilled cast iron, straight hollow, profiled hollow and trilobe camshafts, is bullish on its robust growth path.

In Q1 FY2019 the company posted Rs 94.78 crore in revenue and PAT of Rs 12 crore, which it says does not include the revenue from the acquisitions it made in the last 9 months, namely Memco in Nasik, MFT in Germany and Emoss in Netherlands.

The company says with these strategic acquisitions it has magnified its product and customer. Addressing the investors conference, Yatin Shah, chairman and managing director, Precision Camshafts, said: “Up until the time we acquired these companies, Precision Camshafts was extremely General Motors and Ford Motors-centric. As we now, our product portfolio has increased substantially from camshafts to balancer shafts to prismatic parts to injector bodies for Porsche, etc. Therefore, if you look at the customer pie charts, today, General Motors occupies 18 percent while Volkswagen occupies 15 percent which up until now was not a customer of PCL.”

“We are looking at increasing our machined camshafts sales from this year to next year and the following year, taking us into the last figure that I said in FY2021-2022 to about 4 million (units) per year,” said Shah.

Responding to a query on the company’s domestic market share, Shah said that the company had a market share of around 75-80 percent. It was a single-source supplier for Tata Motors and Hyundai for almost of their every platform. While it was a single source supplier to Toyota, for Maruti Suzuki it is the single source supplier for the new engines such as the K-10, K-12, E-15, which goes into the likes of the Alto, Wagon-R, Celerio, Swift, Dzire, Ignis and Baleno. The company says it has almost doubled sales volume to Maruti Suzuki from around 60,000-70,000 to 140,000 shafts per month.

The company which began its inorganic expansion last year with its maiden acquisition of Memco, Nashik, followed Germany’s MFT in March 2018 and Emoss of Netherlands in May 2018. In an earlier interaction with Autocar Professional, in May 2018, Shah had said that the company in each of its inorganic move will acquire full ownership in “3-5” years.

The company has reaffirmed its position and Shah confirmed that for PCL  “100 percent ownership of Memco is soon on the card”, which it says is expected to be completed in this year. As of date, the company has a 76 percent stake in MFT, Netherlands; 95 percent in Memco, Nasik and 51 percent in Emoss, Netherlands.