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Alicon Castalloy Ltd has recently announced its performance for the quarter ended March 31, 2025. Following are the key financial highlights:

Highlights from the Quarter (Q4FY25):

Alicon Castalloy Ltd (ACL) reported a strong rebound in the fourth quarter of FY25, with revenues growing 8.5% sequentially to Rs.426.6cr, returning to a quarterly run rate of over Rs.400cr. For the full financial year FY25, total revenue was Rs.1724 cr, a 10% increase from Rs.1563cr in FY24. This represents double-digit revenue growth despite a volatile macroeconomic environment and challenging industry conditions.

EBITDA for Q4FY25 stood at Rs.47.7cr, a significant 35.9% increase from Rs.35.1cr in Q3. The EBITDA margin expanded from 8.9% in Q3 to 11.2% in Q4, a rise of 230 basis points. A provision of approximately Rs.4cr towards receivables written off due to the insolvency of a European customer which impacted the reported EBITDA in Q4.

ACL's current order book is around Rs.9000cr, expected to be executed from FY24 upto FY29. This order book is skewed towards the four-wheeler segment, with Passenger Vehicle contributing 50% and Commercial Vehicle 32%, totaling around 82%. The company is focusing on moving from low-margin products (two-wheeler) to high-margin products (passenger and commercial vehicles), including parts for hybrid and pure EV vehicles. Capital expenditure for FY25 was approximately Rs.170cr, primarily for machinery upgrades and new product development. The company anticipates a similar Capex of around Rs.170 crores in FY26 to continue building capabilities and support its expanding business pipeline. The investments are strategic and for bigger, high-volume parts, such as the e-Axle for JLR, which is a potential growth driver.

The management currently expects to achieve revenue in the range of Rs.1,900cr to Rs.1,950cr in FY26, translating to a top-line growth of 12% to 14%. The company remains optimistic for FY26, anticipating EBITDA margins to be at 13%. Therefore, keeping in mind the upcoming positive triggers for Alicon Castalloy Ltd, we remain bullish and maintain our initial target

OUTLOOK AND VALUATION

Alicon Castalloy Ltd posted a robust quarter in terms of revenue growth. We expect FY27E revenue at Rs.2201.0cr, EBITDA of Rs.309.7cr at an EBITDA margin of 14.1% and PAT of Rs.108.7cr. We estimate FY27E EPS at Rs.66.8, and assign a PE multiple of 27x, maintaining the target price of Rs.1806 (upside ~133.4%) from the current market price of Rs.773. We keep our BUY Rating for Alicon Castalloy Ltd extending the investment horizon further by 24-30 months

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