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Enkei Castalloy


Enkei Castalloy is in the business of supplying aluminium castings to the auto industry and also to the agriculture, locomotive and other capital equipment industries.

The company has reported reasonably stable operating profits on somewhat stable revenues on a standalone basis – reporting 37cr of operating profits on 257cr of revenues in the last financial year and about 40cr and 350cr respectively on a consolidated basis.  It may be relevant note, however, that net profits (standalone) have been somewhat erratic presumably due to unsound financial policies on borrowing in the past.  It currently operates with a somewhat reasonable net debt load of 74cr (consolidated) as at 31st March, 2011.

The business requires heavy investments in working capital hitting operating cash flow generation.  It is subject to the risks of aluminium price spikes, crude oil price rises and road development progress (affecting autos), heavy competition from Chinese manufacturers and the unorganised sector, and general cyclicality resulting in very poor performance in recessionary conditions.
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