Nelcast Ltd Q2 FY26 – The ₹1,097 Cr Iron Detective That Casts Profits Slower Than Its Moulds
1. At a Glance
Nelcast Ltd — India’s largest jobbing foundry and probably the most hardworking smallcap nobody brags about — just dropped its Q2 FY26 results like a molten surprise. At ₹126 a share, market cap ₹1,097 Cr, the company’s numbers look like that of a quiet factory that runs day and night but still gets roasted by analysts for low ROE.
Revenue for Q2 FY26 came in at ₹299 Cr (-9.6 % YoY) and PAT collapsed to ₹4.76 Cr (-44 % YoY). EBITDA margins cooled from 9 % last quarter to 5.7 %, probably because iron doesn’t care about your quarterly targets. The stock’s 6-month return? A dramatic +46 %. Three-month return? –25 %. A foundry roller-coaster worthy of a Netflix docu-series titled “When Grey Iron Meets Grey Hair.”
But underneath the smoke and molten metal, this Gudur-based casting maestro supplies to every automobile brand your uncle’s garage dreams of servicing.
2. Introduction
Picture this: A detective walks into a factory filled with red-hot furnaces, machine clanks, and mysterious castings stamped “TAFE,” “Tata,” and “Ashok Leyland.” The culprit? Margins hiding under rising power bills.
Nelcast’s story isn’t of glamour — it’s of grit. The company has mastered ductile and grey iron castings since 1982, quietly becoming the OEM whisperer for India’s auto backbone. Trucks, tractors, off-highway monsters — if it moves, Nelcast has probably built its bones.
Yet, despite decades of foundry finesse, investors still treat it like that underdog cousin in a family of flashy forging stars. ROE 6.5 %, ROCE 9.5 %, and a P/E near 30 — yes, the stock behaves more like a hot plate than a multibagger.
But the company’s export pipeline, cost optimisation (65 % renewable power already!) and tech-upgrades could turn this slow-melting metal into a future alloy of consistency.
3. Business Model – WTF Do They Even Do?
Nelcast makes iron castings. Sounds simple till you realise each piece could hold together a 40-tonne truck or a 100-km/hr tractor.
They run three plants across Andhra Pradesh & Tamil Nadu with a total capacity of 1,60,000 MTPA. Fully automated moulding lines now rule where sweaty men once ruled ladles — a literal industrial evolution.
Revenue mix screams diversification: 35 % M&HCV, 35 % Exports, 23 % Tractors, rest crumbs. Basically, they sell both within Bharat and Bavaria.
4. Financials Overview
Metric (₹ Cr)
Latest Qtr (Sep’25)
YoY Qtr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue
298.7
330.4
331.9
-9.6 %
-10.0 %
EBITDA
17.1
21.4
28.2
-20.2 %
-39.4 %
PAT
4.76
9.82
12.5
-51.5 %
-62.0 %
EPS (₹)
0.55
1.13
1.44
-51.3 %
-61.8 %
Annualised EPS: ₹ 0.55 × 4 = ₹ 2.20 P/E ≈ 57× – which is what happens when profits shrink faster than casting sand cools.
Margins melted due to export slowdown and lower CV demand. Power costs still near 10 % of sales; management promises solar will save them.
