💰 Financial Performance

Revenue Growth by Segment

Overall revenue from operations declined 8.21% from INR 409.81 Cr in FY24 to INR 376.17 Cr in FY25 due to cyclical shifts. However, Q2FY26 showed a strong recovery with revenue of INR 106.7 Cr, representing a 42% YoY growth from INR 75.4 Cr in Q2FY25. The mining and earth-moving segment remains the primary driver, historically contributing ~77% of revenue.

Geographic Revenue Split

The company serves both domestic and export markets. Export sales witnessed a decline in FY24 and Q1FY25 due to moderated global demand, though specific regional percentages for the current period are not disclosed. The company is actively expanding into North American railroad markets.

Profitability Margins

Operating margins remained stable at 29.38% in FY25 compared to 29.25% in FY24. PAT margin for FY24 was 18.30%. In Q2FY26, the PBT margin reached 29.0%, up from 23.7% in Q2FY25, driven by higher volumes and process efficiencies.

EBITDA Margin

EBITDA margin improved to 32.0% in Q2FY26, a 408 bps increase from 28.0% in Q2FY25. Absolute EBITDA for Q2FY26 was INR 34.2 Cr, up 62% YoY from INR 21.1 Cr.

Capital Expenditure

The company invested in process improvement, debottlenecking, and renewable energy (RE) power projects in FY24. Cash flow from investing activities was INR 57.6 Cr in FY25 and INR 32.8 Cr in H1FY26, primarily directed toward enhancing production capabilities.

Credit Rating & Borrowing

CARE Ratings reaffirmed 'CARE A-; Stable / CARE A2+' in August 2025. The company maintains a strong solvency position with total debt to gross cash accruals (TDGCA) of 0.42x in FY23 and low working capital utilization (~9% as of June 2025).

⚙️ Operational Drivers

Raw Materials

Steel scrap and alloys (implied by steel price trends), which are the primary inputs for steel and alloy-steel castings.

Import Sources

Not specifically disclosed, though the company operates out of Bhavnagar, Gujarat, and sources materials for its 29,000 TPA capacity.

Capacity Expansion

Current installed capacity is 29,000 TPA. Capacity utilization for FY26 is expected to be 53%, revised downward from an earlier guidance of 59% due to tender delays.

Raw Material Costs

Materials consumed accounted for 17.7% of revenue in Q2FY26, down from 24.2% in Q2FY25. Margins benefited from a decreasing trend in steel prices during FY24.

Manufacturing Efficiency

75% of castings are shipped as fully machined, increasing value-add and margins. The company uses No-Bake and Shell Moulding techniques for manufacturing excellence.

Logistics & Distribution

Not disclosed as a specific percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

The company targets a 20% CAGR over the next three years through diversification into new geographies and sectors like North American railroads. It is shifting focus away from the bureaucratic defense sector to faster-moving global markets and increasing the share of high-margin fully machined castings.

Products & Services

Steel and alloy-steel castings ranging from 5 Kgs to 2,500 Kgs, used in earth-moving equipment, mining, construction, railways, steel, cement, and locomotives.

Brand Portfolio

Steelcast Limited.

New Products/Services

Development of new parts for the North American railroad OEM and expansion into 4-5 new industrial segments.

Market Expansion

Active exploration of new geographies and customer segments, particularly in the export market for railroad components.

Market Share & Ranking

Described as a 'frontrunner' in the steel and alloy-steel castings industry in India.

Strategic Alliances

Long-term supply agreement with a North American railroad OEM.

🌍 External Factors

Industry Trends

The industry is moving toward 'ready-to-use' fully machined castings. Steelcast is positioned well with 75% of its output already meeting this standard.

Competitive Landscape

Operates in a competitive and cyclical industry with players in the castings and forgings segment.

Competitive Moat

65 years of manufacturing experience, specialized No-Bake and Shell Moulding processes, and long-term associations with major global OEMs provide a sustainable competitive advantage.

Macro Economic Sensitivity

Highly sensitive to infrastructure spending and global mining cycles. A slowdown in these sectors directly impacts the demand for heavy castings.

Consumer Behavior

Shift in OEM preference toward suppliers who can provide end-to-end machined components rather than raw castings.

Geopolitical Risks

Trade barriers or global economic slowdowns affecting export demand, as seen in the subdued performance of FY24.

⚖️ Regulatory & Governance

Industry Regulations

Subject to industrial manufacturing standards and pollution control norms typical for steel foundries.

Environmental Compliance

The company has invested in renewable energy projects to align with sustainability goals and reduce power costs.

Taxation Policy Impact

Direct taxes paid in FY25 amounted to INR 24.3 Cr.

⚠️ Risk Analysis

Key Uncertainties

Cyclicality of end-user industries (mining/construction) and volatility in raw material prices could impact margins by 3-5% if not managed.

Geographic Concentration Risk

Significant exposure to the Indian market and a growing but concentrated export focus on North America.

Third Party Dependencies

High dependency on a few key customers in the mining and earth-moving sectors.

Technology Obsolescence Risk

Technological threats are monitored; the company uses advanced No-Bake and Shell Moulding to stay competitive.

Credit & Counterparty Risk

Receivables stood at 3.11 months in FY25, up from 2.73 months in FY24, indicating a slight elongation in the credit cycle.