Chennai: Auto component maker Pricol Ltd is embarking on a fresh investment cycle, planning to spend between Rs 680 crore and Rs 700 crore in FY27 to expand capacity and execute a strong pipeline of new business wins, even as geopolitical tensions in West Asia weigh on the automotive industry and the global economy.“We are starting our next major capex cycle this year as our previous cycle has come to an end and capacity utilisation has reached peak levels,” managing director Vikram Mohan said during the company’s Q4FY26 earnings call.The proposed investments will be directed towards new plants, machinery and capacity creation across the company’s divisions, including automotive controls, fluid management systems, polymers, and driver information and connected vehicle solutions. Mohan noted that capacity constraints in the plastics business have already begun limiting growth opportunities.He added that the company, one of the largest spenders on R&D in the Indian auto component sector, allocating about 4.5% of its revenue to research and development, would continue investing in technology and new product development to strengthen its competitive position.The investment announcement comes at a time when the automotive sector is facing mounting cost pressures arising from the ongoing West Asia crisis. According to Mohan, polymer prices have risen by about 55%, aluminium prices by 62%, semiconductor costs by 35%, and memory control device prices by 28%, while both inbound and outbound freight costs continue to escalate. The depreciation of the rupee has further compounded the pressure on manufacturers.Despite the challenging environment, Pricol, which reported a total income of Rs 4,053 crore in FY26, has decided against curtailing its growth investments. “We are not scaling back on any investments whatsoever of a capital nature that could hamper the medium- and long-term prospects of the company,” Mohan said.However, he cautioned that “there will be some softening of earnings and slower growth across the automotive sector in the near term. This is not just the voice of Pricol, but of the industry as a whole.”
