Nelcast Ltd. , a leading producer of ductile and grey iron castings in India, has reported a moderate performance for Q2 and H1 FY26, with exports affected by a slowdown in the U.S. economy. The company, however, remains optimistic about a recovery in the latter half of the fiscal year.

Financial Performance

For the half-year ended September 30, 2025, Nelcast reported:

*Note: H1 FY25 PAT included an exceptional income of ₹3.80 Cr from land sale.

Export Challenges and Domestic Resilience

The company's Q2 performance was impacted by a slowdown in the U.S. economy, attributed to the imposition of additional tariffs. This led to temporary production pauses by customers, affecting Nelcast's export volumes. However, domestic demand remained steady, supported by strong tractor and Medium & Heavy Commercial Vehicle (M&HCV) sales.

Segment-wise Performance

• Tractor segment: Revenue share increased from 25% to 27% in H1 FY26.
• M&HCV segment: Maintained a steady 36% contribution to overall revenue.
• Exports: Declined from 36% in H1 FY25 to 31% in H1 FY26 due to the U.S. economic slowdown.

Future Outlook

Deepak Reddy Ponnavolu, Managing Director & CEO of Nelcast, expressed optimism about the company's future prospects:

"We expect export volumes to recover by the end of the financial year as customer schedules normalize. We have successfully developed high value-added castings for the export market and have initiated sampling. The feedback from customers has been very positive. These products are high-margin and strategically important for Nelcast as they will help expand margins, improve capacity utilization, and deliver economies of scale."

The company anticipates market conditions to improve by the end of FY26, with commercial sales of new high-value products expected to begin in the first half of FY27.

Strategic Initiatives

Nelcast is focusing on:

1. Developing high value-added castings for export markets
2. Improving operational efficiency
3. Capitalizing on global opportunities

The company believes these initiatives will drive a turnaround in the coming years, positioning Nelcast for strong growth and improved profitability.

As Nelcast navigates through the current challenges, it remains committed to delivering value to its stakeholders through strategic product development and market expansion efforts.

Nelcast Limited , a leading producer of ductile and grey iron castings in India, reported mixed financial results for the first half of fiscal year 2026, with flat revenue growth and improved profitability despite challenges in the export market.

Key Financial Highlights

• Total revenue remained largely flat at Rs 639.00 crores in H1FY26 compared to Rs 637.40 crores in H1FY25.
• Quarterly revenue declined to Rs 303.00 crores in Q2FY26 from Rs 335.00 crores in Q2FY25.
• EBITDA per kg improved marginally to Rs 12.50 in H1FY26 from Rs 11.80 in H1FY25, representing 5.93% growth.
• Profit after tax increased to Rs 17.30 crores in H1FY26 from Rs 14.00 crores in H1FY25 (adjusted), showing 23.57% growth.

Sector-wise Performance

Nelcast's performance across different sectors showed mixed results:

Export Market Challenges

Nelcast's export performance was impacted by the U.S. economic slowdown due to additional tariffs, affecting both realizations and volumes. This led to a decline in the export segment's contribution to overall revenue.

Domestic Market Performance

While exports faced challenges, Nelcast's domestic market performance showed resilience:

• The tractor segment's share of revenue rose from 25% to 27% in H1FY26, supported by favorable seasonal conditions and strong rural demand.
• Medium and Heavy Commercial Vehicles (M&HCV) maintained a steady 36% contribution to overall revenue.

Future Outlook

Despite the current challenges, Nelcast remains cautiously optimistic about its future prospects:

1. The company expects FY26 to be a consolidation year with demand strengthening toward year-end.
2. New product launches and export market recovery are anticipated to drive growth.
3. Nelcast has successfully developed high value-added castings for the export market and has initiated sampling, with positive customer feedback.

Nelcast's financial results reflect the current global economic challenges, particularly in the export market. However, the company's improved profitability and strategic focus on high-value products position it for potential growth as market conditions improve. Investors and stakeholders will be watching closely to see how Nelcast navigates these challenges and capitalizes on emerging opportunities in the coming quarters.