Steelcast FY26: Export Muscle, Margin Squeeze, Zero Debt

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1. At a Glance

Steelcast clipped ₹423 Cr in revenue for FY26 on 12.5% growth, but the excitement sits in profitability: net profit jumped 20.3% to ₹86.86 Cr. Export momentum kicked hard—orders from North America and Asia are driving the boat. The catch: margins are under pressure (Q4 EBITDA margin came in softer than Q3), and raw material inflation has started eating into the edge that renewable power saved the company.

The company is debt-free with ₹16.59 Cr cash on hand. Capacity sits at 42% utilization, yet management is fast-tracking a capex call from December to July 2026 because order signals are too loud to ignore. Trading at 33.3x P/E on FY26 earnings—a multiple well above both its 5-year average (22.7x) and the peer median (26.1x).

One question lingers: Does a ₹16.59 Cr cash pile fix a business where exports are 58% of sales and forex volatility is a built-in tax on margins?

2. Introduction

Steelcast emerged from a muddy FY25 where global inventory liquidation and freight chaos dragged revenue down 8% to ₹376 Cr. FY26 tells a different story—a snapback in demand from earthmoving OEMs, mining equipment players, and a brand-new customer base in North American railroads.

The company, based in Bhavnagar (Gujarat), has 62+ years in steel casting and supplies 38 customers with top 3 accounting for 75% of sales. Most of the customer base is multinational: Caterpillar, JCB, and peers. In FY24 it won the Caterpillar Supplier Excellence Award 2024. FY26 brought more traction: exports contributed 58% of revenue (up from 53% in FY25), with 35% from Americas, 48% from Asia, and 17% from Europe.

Cost discipline showed up in renewable energy: the company’s 5 MW solar and 4.5 MW hybrid power plants now supply 80% of captive power needs, delivering ₹12 Cr in annual power savings in FY24. A 2.4 MW hybrid plant is under commissioning as of June 2026. Board also approved MD reappointment (Chetan M Tamboli, a third-generation operator) and recommended a final dividend of ₹0.54 per share for FY26.

3. Business Model: WTF Do They Even Do?

Steelcast makes steel and alloy steel castings. Not glamorous, but foundational: 300+ parts ranging from 2.5 kg to 2,500 kg, produced via sand and shell molding. The product mix: Carbon Steel, Low Alloy, High Alloy, Manganese Steel, wear-resistant grades.

Revenue mix by end-market (FY24 lens, as stated in About): Earthmoving held 52% (up from 41% in FY20). Mining dropped to 24% (from 33% in FY20). Others at 24%. The company earns 100% from OEMs and 70% of turnover is machined castings (higher margin, higher complexity).

Export geography (FY24): Americas 35%, Asia 48%, Europe 17%. The company holds Two-Star Export House status and supplied 10 countries in FY24; aim is 15–18 by FY26.

The innovation angle: R&D birthed a De-Sulphurisation/De-Phosphorisation process for liquid metal in induction furnaces. Product development cycle is 4–6 months; the company has ~600 products in the portfolio. In FY24, ~270 parts sold and 16 new parts developed. The pipeline is thickening: management noted 50+ parts under development as of June 2026 concall.

The business model is simple: it’s B2B castings for industrial OEMs with long-term supply relationships, quarterly cost escalation/de-escalation clauses, and export-heavy footprint. Concentrated customer base (top 3 = 75% of sales) but mitigated by repeat-order stickiness (93% of global revenue from 5+ year customers) and geographic spread among the big three’s subsidiaries.

4. Financials Overview

Figures are consolidated, in ₹ crore.

Annual Results

EBITDA margin expanded 104 bps to 30.6% in FY26, despite raw material and power cost increases in Q4. PAT margin hit 20.5%, up 119 bps YoY. The lift in profitability outpaced revenue growth—a sign of operational leverage and cost controls kicking in (notably, depreciation fell to ₹12.9 Cr from ₹12.55 Cr, and interest was nearly nil at ₹0.26 Cr).

Quarterly Snapshot (FY26)

Q4 revenue rebounded to ₹112.43 Cr (+15.4% QoQ from Q3’s ₹97.40 Cr), but profit growth lagged at +12.6% QoQ (₹23.18 Cr vs ₹20.59 Cr). This margin