Opening Hook
When a company says it’s “casting” its way to success, Nelcast literally means it. In Q1FY26, this iron-casting champion not only poured molten metal but also poured money into shareholders’ hearts – with PAT jumping a sizzling 57%. They even bragged about crafting a 500 kg single casting, the biggest in their history, proving that size does matter… at least in metallurgy.
Here’s what we dug out from their iron-clad earnings call.
At a Glance
- Revenue: ₹336 Cr – up 11% YoY, fueled by tractors and exports.
- EBITDA: ₹32.4 Cr – up 44%, margins now at 9.6% (up 222 bps).
- PAT: ₹12.5 Cr – up 57% YoY, because operational efficiency is the new black.
- Exports: ₹115 Cr – up 17.3% YoY; Europe’s love for castings is real.
- EBITDA/kg: ₹14.7 – creeping closer to the ₹15/kg holy grail.
The Story So Far
Nelcast has been quietly evolving from a low-margin, commodity casting player into a high-value product specialist. Over the past few years, it added automation, bigger moulding lines, and a global footprint spanning North America, Europe, and Southeast Asia. FY25 was tough with flat revenues, but Q1FY26 showed the turnaround: better product mix, rising exports, and strong domestic tractor demand.
Management’s Key Commentary
- On Growth:
“Q1 witnessed strong growth in PAT and margins.”
– Translation: Efficiency finally paying dividends. - On Tractors:
“Favorable monsoons boosted tractor sales.”
– Farmers to Nelcast: “Keep the parts coming.” - On M&HCV:
“Stable demand ahead of regulatory changes.”
– Industry: “Buy now, panic later.” - On Exports:
“17% growth despite global headwinds.”
– Global customers: “We’ll take more of that.” - On Margins:
“EBITDA/kg at ₹14.7; on track for ₹15 target.”
– Investors: “Music to our ears.”
Numbers Decoded – What the Financials Whisper
Metric | Q1FY26 | Q1FY25 | EduInvesting Take |
---|---|---|---|
Revenue – The Forge | ₹336 Cr | ₹302 Cr | 11% growth – tractors to thank. |
EBITDA – The Muscle | ₹32.4 Cr | ₹22.4 Cr | 44% up – costs trimmed like bonsai. |
PAT – The Gold Nugget | ₹12.5 Cr | ₹8 Cr | 57% jump – efficiency magic. |
EBITDA/kg – The Holy Grail | ₹14.7 | ₹11.8 | Almost at target, CFO smiling. |
Analyst Questions That Spilled the Tea
- Analyst: “Will you hit ₹15/kg EBITDA?”
Management: “Yes, unless we trip.” - Analyst: “What’s with the giant 500 kg casting?”
Management: “Big casting, bigger margins.” - Analyst: “Any global risks?”
Management: “Markets stabilizing, Europe loves us.”
Guidance & Outlook – Crystal Ball Section
Management is bullish:
- EBITDA/kg target of ₹15 for FY26 looks achievable.
- Tractor segment to remain strong with 7.5% industry growth expected.
- Exports to rise with Europe expansion.
- M&HCV steady with a 3-5% growth forecast.
Optimism everywhere – unless steel prices play villain.
Risks & Red Flags
- Raw material volatility – scrap prices can scrap profits.
- Global demand swings – export growth isn’t bulletproof.
- Regulatory shocks – new norms could dent margins.
- Capacity utilization – underuse would break the growth streak.
Market Reaction & Investor Sentiment
The stock barely flinched – traders yawned, long-term investors smiled. The PAT jump and margin expansion give confidence, but the market wants to see sustained growth before throwing a party.
EduInvesting Take – Our No-BS Analysis
Nelcast Q1FY26 was solid as iron: revenue growth, margin expansion, and PAT surge tick all boxes. The company’s shift to high-value products is working, and the export playbook is strong. The ₹15/kg EBITDA target is within reach, making it an interesting bet for patient investors.
This stock is like their castings – strong, durable, and slowly heating up.
Conclusion – The Final Roast
Nelcast came, cast, and conquered Q1FY26. If it keeps this up, ₹15/kg EBITDA will just be the beginning. For now, investors can sit back and enjoy the forging heat – as long as the global furnace doesn’t cool down.
Written by EduInvesting Team
Data sourced from: Company concall transcripts, investor presentations, and filings.
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