Nelcast Ltd, producer of ductile and grey iron castings in India, posted its fiscal first quarter profit at Rs 7.18 crore, down 7.6 per cent as against Rs 7.77 crore during the corresponding quarter of FY23. It posted revenue from operations at Rs 292.77 crore, down 0.8 per cent as against Rs 295.25 crore during Q1FY23. “Our overall performance in Q1 was primarily impacted due to slowdown in the tractor segment and modest performance in the M&HCV segment on a year-on-year basis,” said P Deepak, Managing Director & CEO, Nelcast. The company said that the YoY and QoQ overall sales volume decreased to 19,145 tonnes in Q1FY24 vs 20,158 tonnes in Q1FY23 and 20,620 tonnes in Q4FY23.
The company EBITDA, it said, stood at Rs 23 crore, down 1.5 per cent on-year due to impact on top-line, while QoQ improvement was due to increase in contribution from export segment and better realization. While the total income during the quarter was at Rs 296.39 crore, Nelcast posted total expenses for the period at Rs 299.55 crore.
Nelcast’s Q1 performance across segments
During the first quarter of FY24, the largest share of revenue at Nelcast was contributed by M&HCV making up 38.9 per cent of the total revenues, followed by tractors at 24.6 per cent, exports share was at 30.6 per cent, revenue for railways segment contributed to 3.0 per cent of the total revenue, off-highway equipment making up for 2.5 per cent of the revenue, and others at 0.4 per cent.
“I am pleased to share that our export revenues reported a strong growth of 23 per cent YoY and stood at Rs 89 crore during the quarter driven by a healthy order backlog. On the margin front, last quarter our EBITDA per kg was impacted due to divergence in international and domestic raw material prices, however, as expected, we saw some convergence this quarter that led to a significant improvement in the same. Our exports tend to have better realizations and contribute towards quarter-on-quarter improvement in EBITDA per kg as well,” said P Deepak.
Outlook for FY24
For the financial year 2023-24, Nelcast expects double-digit top line growth driven by strong demand in M&HCV and exports. Sales volume, it said, is expected to grow in line with sales revenue and export sales is likely to record a reasonable level of growth due to good order book position and new product launches. “In FY24, we expect a double-digit top line growth driven by pick-up in M&HCV segment and strong growth in export markets,” said P Deepak.