01 — At a Glance
The Company That Makes Parts You’ll Never See, But Your Excavator Can’t Live Without
- 52-Week High / Low₹256 / ₹142
- Q3 FY26 Revenue₹97.4 Cr
- Q3 FY26 PAT₹20.6 Cr
- TTM EPS₹8.93
- Annualised EPS (Q3 Avg × 4)₹8.12
- Book Value / Share₹35.6
- Price to Book6.44x
- Debt / Equity0.00x
- ROCE %32.9%
- Capacity Utilization46%
Flash Summary: Steelcast posted Q3 FY26 PAT of ₹20.6 crore, up 7.18% YoY despite revenue dipping 3.08% to ₹97.4 crore. Margins expanded to 32.04% EBITDA (up 297 bps YoY) thanks to forex gains and procurement smarts. The stock is at ₹229, has a valuation of 25.6x P/E, zero debt, and capacity running at just 46% — meaning 54% of its factory is literally sitting idle. Management says it won’t cut prices for US tariffs. American buyers say Steelcast is 5-13% cheaper than Chinese competition anyway. Do the math.
02 — Introduction
Who Wakes Up and Thinks “Let Me Make A Part For A Bulldozer”?
Steelcast Limited is a 64-year-old casting company based in Bhavnagar, Gujarat. They manufacture steel and alloy steel castings — basically heavy metal parts that go into earthmoving equipment, mining machinery, locomotives, and construction equipment. You’ve never heard of them. Your CAT excavator couldn’t function without them.
The company has a 30,000-ton-per-annum capacity facility in Bhavnagar. In Q3 FY26, they used only 46% of that capacity, producing around 8,000 tons. That leaves 16,000 tons of headroom. So either demand will explode, or the factory is built for a future that isn’t here yet. Both narratives are true, depending on whether you’re a bull or a bear.
Revenue comes from 38 customers and 1,300 vendors. The top 3 customers account for 75% of sales. Exports are 58% of revenue; domestic is 42%. The US is their largest single market at 30% of sales, Europe is 15%, Asia is 48%, and they’re trying to add 2 more countries. They won a Caterpillar Supplier Excellence Award in October 2024. Management says they’re “not prepared to give in anything” on prices despite 50% US tariffs. This is either admirable or delusional. Maybe both.
CARE Ratings Note (Aug 2025): A- Stable / A2+. The rating agency literally wrote down “concentrated revenue profile” and “susceptibility to raw material volatility” as weaknesses. But also noted strong cash accruals (₹70 crore in FY25) and zero debt. So basically: good company, bad at scale diversification, but won’t blow up.
03 — Business Model: WTF Do They Even Do?
They Cast Steel Into Shapes That Make Excavators Dig Holes. For 64 Years. No Meme.
Steelcast receives raw materials (steel scrap, ferro alloys), heats them in induction furnaces, pours molten metal into molds (via no-bake, no-bake automated fast loop, and shell molding processes), cools, cleans, and machines the parts. They ship them to OEMs globally. Revenue = cost + margin. Rinse. Repeat for six decades.
They make 300+ different parts ranging from 2.5 kg to 2,500 kg. A single Caterpillar excavator might have 15-20 Steelcast parts in it. The company developed 56 new parts in FY25 and 46 new parts in FY26. Product development cycles are 4-6 months. Customers like Cat, Komatsu, JCB, and Volvo get approvals, then order the same part for years. Repeat orders from customers with 5+ year relationships = 93% of sales. This is not a commodity business; it’s a trust-based, approval-heavy, sticky customer base.
Cost structure: Raw materials are the biggest variable. They have a “sales price variation formula” in most contracts — if scrap prices fall, they pass the savings. If scrap rises, they absorb or pass through depending on contract terms. They’ve set up 5 MW of solar power (commissioned) and a 4.5 MW hybrid plant (commissioned July 2023). Together, these cover 80% of power needs, saving ₹12 crore annually in FY24 and contributing to the Q3 margin uplift.
Earthmoving52%of sales FY24
Mining24%of sales FY24
Others24%of sales FY24
Exports58%of revenue
Fun fact: Steelcast supplies to 16 countries as of FY26. They’ve won a Caterpillar Supplier Excellence Award (October 2024) — which basically means Cat’s CEO said “you’re good.” Management is targeting 18 countries by end of FY27. In casting, being a preferred vendor to Cat is like being picked first for a school cricket match. The game is half-won.
04 — Financials Overview
Q3 FY26: Revenue Dips, Margins Rip. Forex Gods Blessed Them.
Result type: Quarterly Results | Q3 FY26 EPS: ₹2.03 | Q1 FY26 EPS: ₹2.65 | Q2 FY26 EPS: ₹2.29 | Avg Q1–Q3 EPS: (₹2.65 + ₹2.29 + ₹2.03)/3 = ₹2.32 | Annualised EPS: ₹9.28
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 97.4 | 100.5 | 107 | -3.08% | -8.97% |
| EBITDA | 31.21 | 29.23 | 30 | +6.81% | +4.04% |
| EBITDA Margin % | 32.04% | 29.07% | 28.04% | +297 bps | +300 bps |
| PAT | 20.59 | 19.21 | 23 | +7.17% | -10.48% |
| EPS (₹) | 2.03 | 1.90 | 2.29 | +6.84% | -11.35% |
The Weird Bit: Revenue fell 3% YoY, but PAT rose 7%. EBITDA margin jumped 297 bps. Management disclosed the magic: ₹3.41 crore of non-operational benefits in Q3 — forex gain (₹1.41 cr), purchase price variance (₹1.09 cr), and cost reduction programs (₹0.90 cr). So a quarter where customer demand slowed — they relied on treasury gains and procurement brilliance to keep margins fat. That’s not sustainable indefinitely. But it’s also not a sign of business distress. It’s a sign that when revenues are flat, you fight for margin in the trenches. Smart.
💬 Revenue down 3%, but profit up 7% — is this margin engineering brilliance or demand weakness being hidden by one-time gains? Drop your detective hats in the comments.
05 — Valuation: Fair Value Range
Is 25.6x P/E Reasonable for a Casting Company with 54% Idle Capacity?
