Nelcast Limited — Earnings Release 2024

Jan 29, 2024

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29[th] January 2024

BSE Limited

Listing Operations Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai - 400 001 Maharashtra, India BSE Script Code: 532864

National Stock Exchange of India Limited Listing Department, Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051 Maharashtra, India NSE Script Code: NELCAST

Dear Sir/Madam

Sub: Press Release on the Unaudited Financial Results of the Company for the quarter and nine months ended 31[st] December 2023

We are enclosing the Press Release on the Unaudited Financial Results of the Company for the quarter and nine months ended 31[st] December 2023.

We request you to take this information on record.

Thanking you.

For NELCAST Ltd

S K Digitally signed by S K SIVAKUMAR SIVAKUMAR Date: 2024.01.29 20:11:35 +05'30' (S.K.SIVAKUMAR) Company Secretary

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Press and Media Release

January 29, 2024

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Nelcast Ltd reports Q3 & 9M FY 2024 Results

Exports at Rs. 339 Crores in 9M FY2024; up 38% YoY 9M FY2024 EBITDA/kg at Rs. 13.0, up 9% YoY

Chennai, India, January 29, 2024 – Nelcast Ltd (referred to as the “Company”; NSE Symbol: NELCAST, BSE Scrip Code: 532864), a leading producer of Ductile and Grey Iron castings in India, announced its financial results for the third quarter and nine months ended December 31, 2023 .

Commenting on the performance, Mr. Deepak Reddy Ponnavolu, Managing Director & CEO of Nelcast, said “Our export segment reported a strong growth however, the revenue growth was dragged due to subdued performance of the M&HCV and tractors segments. I’m happy to share that our revenues from exports reached Rs. 339 Crores in 9MFY24, surpassing what we did for the entire FY23. We expect to sustain our quarterly run rate of Rs. 100 crores and are confident of achieving our target of Rs. 400 Crores of revenue from exports in FY24. With new product launches scheduled for first half of FY25, we expect this to further boost our revenues and profitability. EBITDA/kg stood at Rs. 13/kg in 9MFY24, an increase of 9% YoY, and is in-line with our target of Rs.12/kg in FY24. Stabilization of raw material prices, improved efficiency and increased export sales have been key contributors towards this improvement.

FY25 is expected to be a strong year driven by exports and pick-up in M&HCV segment with minimal growth anticipated from the tractor segment. We also foresee margin expansion as we optimize capacity utilization, ultimately enhancing operational efficiency through economies of scale. ”

Consolidated Performance Highlights

						(In Rs. crore	s, unless otherwise mentioned)	s, unless otherwise mentioned)
			YoY		QoQ			YoY
Particulars	Q3 FY24	Q3 FY23		Q2 FY24		9M FY24	9M FY23
			Growth		Growth			Growth
Total Revenue	323.0	333.7	(3.2)%	362.6	(10.9)%	982.0	964.9	1.8%
EBITDA	28.2	21.3	32.5%	36.1	(21.7)%	87.2	74.7	16.8%
EBITDA Margin %	8.7%	6.5%	223 bps	9.9%	(121) bps	8.9%	7.8%	_110 bps _
EBITDA/kg (in INR)	12.1	10.0	20.7%	14.9	(18.9)%	13.0	11.9	9.4%
PAT	25.5	5.3	379.0%	16.6	53.4%	49.4	25.3	95.5%
PAT Margin %	7.9%	1.6%	631 bps	4.6%	332 bps	5.0%	2.6%	_241 bps _

Q3 FY24 Financial highlights

• Total Revenue was at Rs 323.0 Crores, down 3.2% YoY and 10.9% QoQ

• While exports reported a strong growth, overall revenue growth was impacted due to subdued performance in Medium & Heavy Commercial Vehicle (M&HCV) and tractor segment given the low demand in the industry that resulted in decrease in overall sale volumes (20,608 Tonnes in Q3FY24; 22,953 Tonnes in Q2FY24; 21,513 Tonnes in Q3FY23)

• EBITDA at Rs 28.2 Crores, up 32.5% YoY and down 21.7% QoQ; EBITDA margin at 8.7%

NELCAST LIMITED 159 TTK ROAD, ALWARPET, CHENNAI – 600018 / www.nelcast.com

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• YoY growth was due to increase in revenue contribution from exports that tend to have higher margins than domestic sales.

• QoQ degrowth was due to high base of last quarter that benefitted from normalization of raw material prices.

• The bottom-line stood at Rs 25.5 Crores

• Sector-wise Revenue

• In 9MFY24, the largest share was contributed by M&HCV making up 38% of the total revenues, followed by Tractors – 21%, Exports – 35%, Railways – 3%, Off-highway equipment – 2%, and Others – 1%.

• In 9MFY23, M&HCV contributed 38% to revenues, Tractors – 31%, Exports – 26%, Railways – 3%, Offhighway equipment – 2%, and Others – ~0%.

Outlook for FY25

• Expect to report reasonable growth driven by exports and pick-up in M&HCV and tractors.

• Exports sales expected to continue to report strong growth on the back of our robust order book and upcoming new product launches.

About Nelcast Ltd

Incorporated in 1982, Nelcast manufactures grey and ductile castings for the M&HCV and tractor industry segments. Around 25-30% of its overall revenues is also 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. For the tractor segment, the company’s major products are transmission casing, centre housing, axle housing and hydraulic lift cover. It also supplies base plates and brake discs for metro rail projects and the railways respectively. Nelcast has an aggregate installed production capacity of 160,000 tonnes per annum. Its factories are located at Ponneri in Tamil Nadu, and at Gudur and Pedapariya in Andhra Pradesh.

Contact Details

Nelcast Limited Ernst & Young LLP S. K. Sivakumar Sonia Keswani CFO & Company Secretary Vikash Verma E-mail: nelcast@nelcast.com Email: sonia.keswani@in.ey.com vikash.verma1@in.ey.com

For further information on Nelcast Limited, please visit www.nelcast.com

Safe Harbor

This release contains statements that may contain “forward-looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Nelcast Ltd future business developments and economic performance. While these forward-looking statements indicate our assessment and future expectations concerning the development of our business, several risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. Nelcast Ltd undertake no obligation to publicly revise any forward-looking statements to reflect future / likely events or circumstances.

NELCAST LIMITED

159 TTK ROAD, ALWARPET, CHENNAI – 600018 / www.nelcast.com