Nelcast hosted a conference call on May 14, 2024. In the conference call, company was represented by, Mr. P. Deepak -Chief Executive Officer & Managing Director and Mr. S.K. Sivakumar- Chief Financial Officer.

Key takeaways of the call

Revenue growth for FY24 remained relatively stagnant, impacted by muted M&HCV demand and sluggish sales in the tractor segment. However, this was partially mitigated by robust export performance.

In FY24, the largest share was contributed by M&HCV making up 38.6% of the total revenues, followed by Tractors 21.2%, Exports 35.4%, Railways 2.2%, Off-highway equipment 2.3%, and Others 0.3%.

The company witnessed slow demand in H2 FY24, influenced by the general elections, which notably affected the sales of M&HCV segment and muted demand from tractor market.

In the domestic market, the company expect resurgence in the commercial vehicle industry in H2 FY25.

The company reported an exceptional performance in its export division. It clocked exports of Rs 445 crore in FY2024, up 35% YoY.

Looking ahead, management is optimistic about the export market''s trajectory, anticipating strong growth fueled by increased volumes and the introduction of new products.

In tractor segment, the company anticipate an uptick in the Q1FY25, followed by moderate growth throughout the year.

The EBITDA per kg also saw a notable increase to Rs 12.48, up by 10% year-on-year from Rs 11.34 in FY23, supported by improved operational performance.

Management foresees an expansion in EBITDA per kg, fueled by the continued robust export performance coupled with enhanced capacity utilization that is expected to boost operational efficiency.

The company’s Pedapariaya Plant in Andhra Pradesh now boasts a newly installed 1 MW inhouse solar power plant, reinforcing its dedication to sustainability and cost-effectiveness while reducing our carbon footprint.

With increase in infrastructure spends by the Government and pick-up in construction activity, company expects strong growth in M&HCV segment in FY25.

The company aims to forge new relationships and expand diversity in its geographies and sector splits.

The company does not anticipate any major capex in FY25. Management guided cumulative capex of Rs 60 crore for FY25 and FY26.

The board recommended a dividend of Rs 0.40 per share of Rs 2 paid-up for the financial year 2023- 24. The record date for the purpose is 18 July 2024.