Rolex Rings Navigates Tariff Headwinds, Eyes Stronger Growth in FY27-28

Rolex Rings Limited, a prominent player in the Indian auto component and bearing ring manufacturing sector, has presented its earnings update for Q2 FY26 and H1 FY26, revealing a period marked by external challenges but also strategic resilience. While the company experienced a dip in quarterly revenue, primarily due to US tariff uncertainties, it successfully maintained its profitability margins, signaling robust operational efficiency. Management commentary indicates a clear path forward, with expectations of a rebound in performance driven by easing trade tensions and new business initiatives.

For Q2 FY26, Rolex Rings reported a revenue from operations of INR 271.4 crore. This figure reflects a 7.0% year-on-year decline and a 7.7% quarter-on-quarter decrease, largely attributed to the slowdown in US-related volumes. Despite this, the company's EBITDA stood at INR 69.2 crore, with a healthy margin of 25.5%, demonstrating effective cost management. Profit After Tax (PAT) for the quarter was INR 44.3 crore, down 9.9% year-on-year and 10.0% quarter-on-quarter. The first half of FY26 saw total revenue from operations at INR 563.0 crore, with a PAT of INR 93.5 crore.

Financial Snapshot: Q2 FY26 Performance

The primary headwind faced by Rolex Rings was the imposition of significant import duties by the US on Indian exports. Consignments shipped from July 2025 onwards faced duties as high as 28%, escalating to 53% by September and October 2025. This uncertainty led many US importers to halt orders, causing a considerable de-growth in exports. New business orders, particularly those for new customers and programs in the US, were also put on hold. However, a crucial development occurred in mid-October 2025, when the US government announced a partial waiver, reducing the duty to 28% for a major portion of Rolex Rings' exports, effective November 1, 2025. This clarity is expected to alleviate much of the pressure.

Segmental Performance and Market Dynamics

Rolex Rings' revenue mix for Q2 FY26 highlights its core strengths. Bearing rings contributed 58% of the revenue, amounting to INR 145 crore, while auto components accounted for 42%, or INR 105 crore. The company is witnessing an improvement in domestic revenue, especially within the bearing rings segment. The European market also showed positive traction, with its contribution to revenue growing by 6-7% in Q2 FY26 compared to Q1 FY26, providing a counterbalance to the US market's slowdown.

Revenue Split by Product (Q2 FY26)

Strategically, Rolex Rings is focusing on leveraging the trend of outsourcing by OEMs in bearing manufacturing. The company is actively expanding its product portfolio by adding different ring gears and gear blanks for automotive transmissions, aiming to capture incremental business from existing customers' expansion plans. One such customer in Gujarat, whose plant was previously underutilized, has already uploaded 3-4 new industrial bearing ring components to Rolex Rings.

Looking ahead, management is optimistic about a strong recovery. They anticipate being back on track from December 2025, with the last quarter of FY26 expected to meet original targets. The company projects heightened growth for FY27 and FY28, driven by the commencement of previously awarded orders that were temporarily delayed. Furthermore, the 9MW solar plant, which faced initial deferrals due to technical glitches, is now expected to be operational by December 2025, contributing to cost savings and sustainability.

Rolex Rings' Q2 FY26 performance underscores its ability to navigate a challenging global trade environment while maintaining operational discipline. With strategic initiatives in place, a diversified market approach, and favorable policy changes in key export markets, the company is well-positioned for a robust rebound and sustained growth in the upcoming fiscal years. The focus on expanding product offerings and capitalizing on OEM outsourcing trends further strengthens its long-term outlook.