The product range includes around 200 items in SG (Spheroidal Graphite) Iron Castings and grey iron castings. Cylinder blocks, rear hubs, spring shackle, brackets, and exhaust manifolds manufactured by the company are used in heavy commercial vehicles (HCVs) and tractors.

Nelcast Inc, the wholly owned subsidiary in the US, was formed to tap export opportunities

The company has two divisions namely foundry and machining.

June 2017 quarter results

For the quarter ended June 2016, sales grew 13% to Rs 166.11 crore. OPM improved 20 bps to 9.2% which took OP up 15% to Rs 15.24 crore. Other income fell 69% to Rs 91 lakh and interest cost fell 16% to Rs 87 lakh. After providing for depreciation (up 14% to Rs 3.81 crore), PBT went down 3% to Rs 11.48 crore. Taxation jumped 12% to Rs 3.80 crore (tax incidence jumped from 28.5% to 33.1%). Thus finally net profit fell 10% to Rs 7.68 crore.

In FY 2017, sales grew 2% to Rs 637.64 crore. OPM fell 20 bps to 10.0% which stagnated the OP at Rs 64.03 crore. PBT was up 6% to Rs 49.00 crore and net profit grew 7% to Rs 33.98 crore.

Commercial production of first phase of expansion of 18000 MT per annum expected by end of September 2018

The company is setting up a state of the art Greenfield project for manufacture of Iron casting in Andhra Pradesh.

The manufacturing facility is being set up over 42 acres of land with an investment of Rs 79 crore in its first phase.

The capacity of the first phase would be about 18000 MT per annum. The overall capacity of the plant would be 54000 MT per annum and will be implemented in two phases. The commercial production of the first phase is expected by end of September 2018.

A leading player

Nelcast is one of the largest in the Indian foundry industry. It has a very focused production process that caters to the critical parameters needed to produce a technologically superior casting component. Equipped with the most advanced technologies in new product development, melting, moulding, core making and quality control, Nelcast takes every step necessary to creating exceptional castings

In a quest to move its products up the value chain and satisfy customers demand for finished components, Nelcast is upgrading its machine shop into a state-of-the-art machining facility.

Apart from the auto, it caters to railways & the pipe fittings industries

Nelcast products range from industry to industry. Though primarily manufacturing casting components, Nelcast has a wide range of products that meet the requirements of different kinds of automation used in different industries. Beginning as low as 0.5 kg, Nelcast offers parts upto 260 kgs in weight and in a choice of several grades of Grey & Ductile Iron.

Catering to the Commercial Vehicle Industry since 1985 and the Tractor industry since 1988, Nelcast has diversified into various other industries to increasingly fulfill their casting needs. Today its products cater to the Global Automotive, Tractor, Construction, Mining, Railways and General Engineering sectors and it is proud to have as its customers the leading companies in these sectors worldwide

Nelcast manufactures parts to be used in various applications in automobiles such as the engine, transmission, suspension, axle, brake and steering. Nelcast caters to the tractor industry for their requirement of various housings as well as engine, transmission and axle components. It also caters to the railways & the pipe fittings industries

Has marquee list of clients

The company has been receiving continuous support from its OEM customers like Tata Motors, Ashok Leyland, TAFE, Eicher Tractors (TMTL), Mahindra & Mahindra, Volvo-Eicher Commercial Vehicles, SAME Tractors, Escorts Tractors, Sonalika Tractors (ITL), Daimler India, Ashok Leyland John Deere, Caterpillar, etc., from Tier I customers like Automotive Axles, American Axles, Dana, Rane Madras, Rane-TRW, ZF India, Simpson & Co., etc., and export customers like Meritor and ZF Industries. The company is closely working with all customers in terms of new product development, improvement in quality & delivery performance etc., to meet their expectations

Valuation

The share price trades at Rs 64.