Buy Alicon Castalloy Ltd For Target Rs. 1,465 By Sushil Finance
Highlights from the Quarter (Q2FY26):
Alicon Castalloy Ltd (ACL) reported marginally weak revenues in the second quarter of FY26, with revenues falling 8.0% YoY to Rs.428.2cr. The sequential improvement in gross margins was primarily due to a favorable product mix, specifically the focus on the Passenger Vehicle business, which fetches higher value-added parts
ACL has a healthy order book of about Rs.9,100 crore. The execution timeline for this order book runs from FY24 to FY29. As of Q2FY26, roughly Rs.650cr to Rs.700cr has been consumed from this existing order book, leaving approximately Rs.8,400cr remaining for execution until FY29. ACL continued efforts toward its automation road map, commissioning new robotic cells at Pune facilities to enhance consistency, efficiency, and worker safety, moving toward becoming a “Smart Foundry” organization. They are also leveraging the expertise of a team of German experts to refine casting processes, reduce costs, and improve yields.
The newly established Defense, Aerospace and Railways (DAR) vertical is shaping up well, and new orders in the non-auto business were received, ensuring diversification of revenues is set to increase.
Regarding the tariffs announced by the U.S., the management mentioned that the direct impact for the company is mitigated as customers pay the duty, however, the long term impact will need to be assessed over time.
The management anticipates an improvement in its top line, potentially achieving double-digit growth in the next year. Profitability is expected to continue improving quarter-on-quarter. EBITDA margins are expected to be better in Q3 and Q4FY26 compared to Q2FY26.
Please refer disclaimer at https://www.sushilfinance.com/Disclamier/disclaimer
Member : BSE/ NSE/ MSEI. SEBI Registration No.-INZ000165135.
