Foseco India Limited , a leading manufacturer of products for the foundry industry, has reported a robust financial performance for the quarter ended March 31, 2024. The company's unaudited financial results, approved by the Board of Directors on April 30, 2024, show significant growth in both revenue and profitability.

Financial Highlights

All financial figures in Rs lakhs, except EPS in Rs

Revenue and Profitability

Foseco India demonstrated strong growth in its top line, with revenue from operations increasing by 10.5% compared to the same quarter in the previous year. This growth in revenue contributed to the company's improved profitability, as evidenced by the 11.3% rise in net profit.

Operational Performance

The company's total expenses for the quarter stood at Rs 10,487.16 lakhs. The largest component of these expenses was the cost of materials consumed, which amounted to Rs 5,750.74 lakhs. This indicates that Foseco India has managed to maintain efficient cost control while driving revenue growth.

Earnings Per Share

The company's earnings per share (EPS) showed a notable improvement, rising to Rs 24.81 from Rs 22.29 in the same quarter last year. This 11.3% increase in EPS reflects the company's enhanced profitability and potentially indicates improved returns for shareholders.

Audit and Review Process

The financial results were reviewed by the Audit Committee before being approved by the Board of Directors. Additionally, statutory auditors Price Waterhouse Chartered Accountants LLP conducted a limited review of the results and issued an unmodified report, providing assurance on the accuracy of the financial statements.

Conclusion

Foseco India Limited's financial performance for the quarter ended March 31, 2024, demonstrates the company's ability to grow its revenue and profitability in a competitive market. The significant improvements in net profit and earnings per share highlight the company's operational efficiency and potential for sustained growth in the foundry industry sector.

Foseco India Limited , a leading manufacturer of foundry chemicals, has announced a significant move to expand its presence in the Indian market. The company has entered into a share purchase agreement to acquire a 75% stake in Morganite Crucible (India) Ltd. (MCIL), a manufacturer of crucibles and foundry consumables for metal melting applications.

Acquisition Details

The acquisition involves the purchase of 42 lakh shares of MCIL, representing 75% of its voting share capital. The deal is valued at ₹1,557.00 per share, amounting to a total consideration of ₹653.94 crore. This strategic move aligns with the larger acquisition of the worldwide Molten Metal Systems (MMS) business by the Vesuvius Group from the Morgan Group.

Share Swap Arrangement

The transaction will be executed through a share swap arrangement. Foseco India will issue 11,50,800 of its own shares to the MCIL Promoters at a price of ₹5,674.00 per share. This translates to an exchange ratio of 274 Foseco India shares for every 1,000 MCIL shares.

Financial Performance of MCIL

Morganite Crucible has demonstrated steady growth in recent years. The company's revenue figures for the past three financial years are as follows:

Strategic Rationale

The acquisition is expected to expand the Vesuvius Group's Foundry business into the faster-growing non-ferrous market segment and strengthen its presence in India. This move aligns with the Group's strategic ambitions and is expected to create substantial cost synergies.

Mandatory Open Offer

As a result of this acquisition, Foseco India, along with its promoters, will be required to make a mandatory open offer to the public shareholders of MCIL. The open offer will be for the acquisition of up to 14 lakh shares, representing 25% of MCIL's total equity voting share capital, at a price of ₹1,557.15 per share.

Market Reaction

The news of the acquisition has been well-received by the market. Foseco India's shares traded 6.09% higher at ₹5,953.00, extending gains of over 70% in the past six months.

Conclusion

This acquisition marks a significant step for Foseco India in expanding its product portfolio and market reach. The integration of MCIL's expertise in crucibles and foundry consumables with Foseco's existing operations is expected to create synergies and strengthen the company's position in the Indian foundry industry.

The transaction is subject to necessary regulatory approvals and is expected to be completed by October 15, 2025. Shareholders will be asked to approve the deal at an extraordinary general meeting scheduled for September 21, 2025.