NELCAST - Nelcast

📊 NSE: NELCAST 🏢 Castings & Forgings 📅 Last Updated: 12/14/2025 10:26

💰 Financial Performance

Revenue Growth by Segment

Domestic M&HCV segment (37.1% of 9M FY2025 revenue), Domestic Tractor segment (23.6% of 9M FY2025 revenue), and Exports (34.8% of 9M FY2025 revenue). Overall revenue for FY2025 was INR 1,263.4 Cr, a marginal decline of 0.85% YoY from INR 1,274.2 Cr in FY2024.

Geographic Revenue Split

Domestic India (64% of FY2025 revenue) and Exports (36% of FY2025 revenue at INR 445.22 Cr). Export concentration is high in the USA, with additional presence in Europe and Southeast Asia.

Profitability Margins

Net Profit Margin (PAT/OI) declined from 4.3% in FY2024 to 3.0% in FY2025. Profit After Tax (PAT) fell 31.4% YoY to INR 37.3 Cr in FY2025 from INR 54.4 Cr in FY2024.

EBITDA Margin

Operating Margin (OPBDIT/OI) was 8.0% in FY2025, up 20 bps from 7.8% in FY2024. However, it declined to 7.3% in 9M FY2025 (down 120 bps YoY) due to cost inflation and revenue decline.

Capital Expenditure

Annual maintenance capex of INR 20.0-25.0 Cr is planned for FY2026 and FY2027, to be funded through internal accruals. Significant debt-funded capex was completed in previous years.

Credit Rating & Borrowing

Ratings reaffirmed at [ICRA]A (Stable) and [ICRA]A1. Total debt/OPBDIT stood at 3.3x in FY2025, while interest coverage was 2.9x.

⚙️ Operational Drivers

Raw Materials

Pig iron and steel scrap (Specific % of total cost not disclosed, but commodity price softening contributed to a 5.7% YoY revenue decline in 9M FY2025).

Capacity Expansion

Current installed capacity is 1,60,000 MTPA across factories in Ponneri (TN), Gudur (AP), and Pedapariya (AP). No major debt-funded expansion is planned over the medium term.

Raw Material Costs

Not disclosed as a specific % of revenue; however, inability to pass on cost inflation led to a 120 bps decline in operating margins in 9M FY2025.

📈 Strategic Growth

Expected Growth Rate

11.30%

Growth Strategy

Transitioning to medium-to-high complexity machined castings to differentiate from low-cost Chinese competition; expanding export customer base in North America and Europe; leveraging a healthy order book from new global OEM platforms.

Products & Services

Ductile and grey iron castings including axle housings, clutch housings, and bogie suspension brackets.

Brand Portfolio

Nelcast

New Products/Services

Machined castings for global OEMs and new platforms; specific revenue contribution % not disclosed.

Market Expansion

Targeting North America, Europe, and Southeast Asia; increasing export customer base periodically.

Market Share & Ranking

One of the larger players in the Indian ductile iron/grey castings market.

🌍 External Factors

Industry Trends

Domestic tractor industry projected to grow ~11.3% to 975,000 units in FY2026; transition to TREM V emission norms by April 2026 will increase vehicle costs.

Competitive Landscape

Competes with local and Chinese suppliers; differentiates through specialized high-complexity products to maintain higher margins.

Competitive Moat

Safety-critical nature of products (axle/clutch housings) and long lead times for OEM validation (1-2 years) create high switching costs and durable competitive advantages.

Macro Economic Sensitivity

High sensitivity to domestic economic cycles (M&HCV segment is 37.1% of revenue) and global macro-economic trends affecting exports (34.8% of revenue).