Nelcast manufactures iron castings for use in the automotive
industry.
The company plans to expand into supplying to manufacturers
of earth moving equipment and trailers.
It also intends to focus on exports and supplying to OEMs.
The company reported declining operating profit margins on
moderately growing revenues – reporting about 30cr of operating profits on
revenues of about 500cr in the last financial year. It operated with a moderate net debt load.
The business is dependent on the fortunes of the auto
industry, which is cyclical. Moreover,
it faces stiff competition from players in the unorganised sector and new
foundries that have come up. It is
exposed to metal price rises and a strengthening INR since it’s a net exporter.
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