Stock below Rs 100: Dont miss action in this stock as it has reported more than threefold rise in its PAT and future remains buoyant!
The company caters to a marquee clientele of Original Equipment Manufacturers (OEMs) and Tier-1 customers in Commercial Vehicle, Tractor, Off-Highway Equipment, Railway & Passenger Vehicle segments.
Nelcast manufactures grey and ductile castings for the M&HCV and tractor industry segments. Around 25 per cent of its overall revenues is generated from export markets. Key products supplied to its M&HCV clients include differential carriers, differential cases, bogie suspension brackets and conventional brackets, among others.
The stock has jumped more than 8 per cent in the opening bell on the back of robust performance reported by the company in its Q2FY23. Total revenue of the company jumped by 37 per cent YoY to Rs 331.7 crore, growth was driven by increase in volumes (22,090 Tonnes in Q2FY23 vs 19,277 Tonnes in Q2FY22) and better realization due to exports growth and strong commercial vehicle demand.
EBITDA jumped 81.1 per cent YoY to Rs 30.1 crore in Q2FY23 and EBITDA margin improved by 221bps to 9.1 per cent. EBITDA/KG was reported at Rs 13.5, it surpassed e FY23 target of Rs. 12 on the back of sales volume growth, softening of raw material cost and the benefit of pass through of raw material price increase. PAT soared more than threefold on YoY basis to Rs 12.2 crore.
Going forward, performance of Q3FY23 is expected to be largely in-line with Q2FY23 followed by a stronger performance in Q4FY23. It is on track to achieve a target of Rs 300 crore of revenues from exports in FY23. New products are in final ramp up stage. Company is on track to achieve 90,000 metric tons sale volumes in FY23.
The company caters to a marquee clientele of Original Equipment Manufacturers (OEMs) and Tier-1 customers in Commercial Vehicle, Tractor, Off-Highway Equipment, Railway & Passenger Vehicle segments. Besides a strong position in the domestic market, Nelcast has a rapidly growing presence spread across North America, Europe and Southeast Asia.