Steelcast Limited (STEELCAS) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Steelcast Ltd. Q4 and F526 earnings conference call. As a reminder, all participant lines will be in the lesson only more, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the contents over to Mr. Arpit Mandra from EY. Thank you whenever to you, sir.

Thank you, Ikra. Good evening, everyone. We welcome you all to the Steelcast Limited earnings call to discuss the Q4, FY26 and FY26 financial results. Today, from the management side, we have with us Mr. Chetan Tamboli, Chairman and Managing Director, Mr. Ruseen Tamboli, Whole Term Director, Mr. Shubhash Sharma, Executive Director and CFO, and Mr. Umesh Bhatt, Company Secretary. Please note, a copy of all the disclosure is available in the Investor section of the website as well as on the Stock Exchange. Further, a detailed say further statement is given on page number 29 of the investor presentation of the company. Please note that anything said on this call which reflects the outlook for the future or which could be constructed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. Now, I shall hand over the call to Mr. Chesan Gamboli for his opening remarks. Over to you, sir. Thank you.

Thank you, Arpit Dhai. Good evening, everyone. We welcome you to Steelcast earnings conference call to discuss the company's performance for the quarter and full year ended March 2026. Our board meeting concluded on Saturday and financial results along with investor presentation have been uploaded on stock exchanges and the company's website. We trust you have had an opportunity to review the same. Now let me begin by sharing an overview of the global and Indian economic environment. During FY26, the global economy continued to demonstrate resilience despite geopolitical uncertainties, evolving trade policies, and supply chain realignments. Global GDP growth remained relatively stable at around 3.3%. Supported by investments in technology, infrastructure, and industrial capacities. However, the operating environment remained dynamic due to geopolitical tensions, energy price volatility, and shifting global trade flows. These developments have accelerated supply chain diversification, with companies increasingly adopting China plus one strategies, benefiting countries like India. India, on the other hand, continued to be one of the fastest-growing major economies globally, with GDP growth estimated at 7.3% to 7.6% in FY26. This growth has been supported by strong domestic consumption, sustained infrastructure investments, and a continued policy thrust on manufacturing and localization, all of which have contributed to the resilience and expansion of the Indian economy. Industrial activity remains robust, driven by expansion across manufacturing, mining, and infrastructure sectors, all of which are key end-user segments for our business. Let me now briefly touch upon industry's sense before moving on towards financial performance. The global metal casting industry remains a critical enabler of industrial growth, with demand driven by sectors such as construction equipment, mining, energy, and engineering. The industry is expected to grow at a healthy pace. Supported by ongoing infrastructure development, a revival in industrial capital expenditure, and increasing investment in energy transition and renewable sectors. India continues to strengthen its position as a global manufacturing hub, benefiting from rising localization, expanding export opportunities, and deeper integration into global supply chains. In this evolving landscape, Steelcast is well positioned to capitalize on emerging opportunities supported by increasing outsourcing. By global OEMs, continued diversification of global supply chains, and rising demand for specialized high-performance casting. Let me now briefly highlight our financial performance for FY26, Q4, and FY26 year as a whole, setting with performance during the current year vis-a-vis previous year, and current quarter versus preceding quarter. During F526, the revenue from operation was at Rs. 423.17 crore, an increase of 13.33% from Rs. 373.39 crore in F525. EBITDA during the year was Rs. 129.64 crore, a growth of 17.53% from 110.50 crore in F525. EBITDA margin was at 30.64%, an increase of 104 basis points from 29.6% in FY25. PED during the year was at Rs. 86.86 crore, a growth of 20.31 crore in FY25. PED margin came to 20.53%, an increase of 119 basis points from 19.34% in FY25. Q4 F526 versus Q3 F526. During Q4 F526, the revenue from operations was at 112.43 crore, an increase of 15.43% from 97.4 crore in Q3 F526. Ebitda during Q4 F526 was at Rs 34.25 crore, a growth of 9.74% from 31 to 31 crore.

I'm sorry to interrupt Chetan sir, we are not able to hear you.

In fact, during Q4 F526 was at Rs.23.0, a growth of 12.58% from Rs.20.59 and crore in Q3 F526. Ladies and gentlemen, the quarter reflects an encouraging performance for the business while overall volumes have improved compared to the immediate past period. There has been some moderation when compared to the classic period of the previous year. Revenue trends follow a similar trajectory with sequential growth supported by strong contributions from both export and domestic segments. Encouragingly, demand has continued to improve in recent months despite ongoing global incentives, particularly regions affected by prolonged geopolitical tensions. In this environment, the export segment has clearly emerged as a strong growth driver. Consistently outperforming domestic business across both the quarter and full year. During the year, exports contributed over 60% of revenues, reaffirming our strong global positioning while we continue to witness steady traction from North America and other developed markets alongside increased engagement with Google OEMs driven by ongoing supply chain diversification. The company has maintained strong discipline on cost. Material costs were effectively managed despite volatility in commodity markets through agile procurement strategies such as just-in-time sourcing, ensuring stable consumption levels. However, certain cost pressures were evident during the quarter. Manufacturer expenses increased due to higher maintenance activities, machinery repairs, and provisions related to export-related obligations. Additionally, higher fuel prices coupled with increased production activity led to a rise in power and energy costs. Other operating expenses remained largely stable, and consumption of stores and spare stores managed efficiently with only marginal movements. Despite this short-term pressure on margins, the broad annual performance remained strong, underpinned a healthy growth in volumes, revenues, and overall profitably compared to the previous year. I would also like to address a key point regarding the impact of elevated fuel and freight costs, especially in light of the ongoing midlife situation. There may be a question on whether we will receive price adjustments from customers in subsequent quarters to compensate for this incremental cost. I would like to clarify that yes, wherever applicable, we do expect to receive such adjustments in the coming quarter. These adjustments and rupee depreciation will help offset cost impact observed during the current period. In summary, while the quarter reflects some margin pressure rising from external cost factors, the underlying business fundamentals remain strong and resilient. With improving demand trends, robust export performance, and continued focus on disciplined cost management, the company is well positioned for sustained growth going forward. At the same time, we continue to maintain strong financial prudence with debt-free balance sheet and healthy cash reserves of around 114 crores as of 31st March 26th. Providing us with the flexibility and strength to navigate uncertainties and capitalize on future opportunities. On the operational front, we remain focused on enhancing capacity and cost efficiency supported by our 2.4 MW hybrid power project, which is under commissioning by June 26, and is likely to improve sustainability while generating annual savings of approximately 3.6 crore. A steel car, strong governance, robust operational cost control. Remains central to our growth strategy. The company has established a comprehensive governance framework supported by strong internal control system and audit mechanism. With regular oversight by the audit committee and senior management to ensure high standards of financial discipline and transparency in reporting, at the same time, we actively manage key risks arising from cyclicality of end-user industries, foreign exchange fluctuations, volatility in raw material energy costs, as well as The Middle East War has significantly impacted various industries in India, particularly those that rely heavily on imported crude, oil, and gas, such as the energy sector. Oil and gas trade and logistics, the effect of this war was on crude oil prices and inflation. Trade and balance of payments, remittances and employment financial markets, and investor sentiments and energy security has underscored the urgency for India to develop strategies that mitigate economic vulnerabilities and adapt to the evolving geopolitical landscape. So far, the company has been successful in managing this disruption. Through its various efforts and is further confident to navigate through these disturbances in future also. Looking ahead, global demand remains steady with gradual recovery across industrial sector, while India's strong infrastructure push and continued growth in manufacturing are expected to provide sustained support to demand. At the same time, ongoing supply chain diversification is creating significant opportunities for export-oriented players like us. In this context, we remain confident of sustaining our strong growth momentum, maintaining stable margins, and delivering healthy long-term growth. And we expect, going forward, an estimated CAGR of 20% plus over the next three years, and particularly for the year F527. In conclusion, FY26 has been a year marked by resilience, discipline execution, and meaningful strategic progress for SEALCAS. Despite facing near-term uncertainties, we have delivered strong financial performance, further strengthen our global positioning, and continue to invest in key growth drivers that will support our long-term expansion. We remain firmly committed to creating sustainable long-term value for our stakeholders. At Steelcast, the smart goal of our top management team is to make Steelcast more than Rs.100 crore pet company in FY27. Moreover, we all have a very strong aspiration to double our sales by FY29 compared to FY26 with present capacities. We have been contemplating for increase in capacities by December 26, with increase in demand and the new parts getting converted into cereal supplies. We will decide increase in capacity by end July 2027. With that, I would now like to open the floor for questions. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use headset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Harjeev Solanki from EGV3 Capital. Please go ahead.

Hello. Good afternoon, sir. Good afternoon. Sir, I had one question. So, one of your large client is saying the demand is strong because... There's a data center angle to it also that the CAPEX is happening there. So do you think in India also going forward, we can see the domestic demand picking up on account of any data centers coming in? That's my first question. And the second question is we had supplied our defense components to and So are we trying to enter other geographies as well? Showcasing our products? And third, just wanted a clarification. We said that by June 27, you will look to take our decision on Capex. So, I'm assuming you will not wait for the 75% utilization levels to touch, and you are looking to do CAPEX much earlier given the demand visibility. If you can clarify on that part also.

Yeah, thank you for this. Now, increasing demand due to data centers. According to our knowledge, there is Practically no requirement of steel castings in data centers. So there will not be any significant increase in demand because of this data centers. Second, regarding export of different products, our parts have been approved by them. We are now only waiting for, you know, getting orders for cereal supplies because of The Iran-U.S. war, orders are getting delayed, but we expect in the next one or two quarters to happen. In terms of CAPEX, I was saying that initially we were trying to decide this towards end of 2026, with increase in requirements from all of our customers. And also approval of all the new parts ever by us, which are being converted to serial supply. We don't want to wait till December 26th for capacity expansion, and we will decide this by end of July.

July 26th, right?

July 26th, yes.

Okay, so this is what I am trying to understand that earlier we were going to wait till 75% utilization levels, but now you are going to do it earlier. So are you trying to say that your capacity utilization will ramp up significantly in FY27 and hence the need to put on a CAPEX?

Is that understanding right? Our current year, capacity utilization is expected to be around. 63-64%, and the indications from customers are quite strong, so we don't need to wait till we reach 75% utilization. We can go ahead and decide much earlier. So, hence, we are in a very advanced stage of finalizing the CAPEX for capacity expansion, and we will be ready with this by July end.

Okay, I understood, yeah. And what is the order book for FI 27 or Q1, if you can add it?

It's generally, you know, in our company, it's always anywhere from 110, 120 days' time, and in terms of value is about 130, 135 crores.

This is for Q1, right?

As of, okay. Yes, this is as of effective first statement.

Okay, understood. Yeah, these are my questions. Thank you.

Thank you.

Thank you. Next question is from the line of Meher Desai from Desai Investments. Please go ahead. Mahir, your line is unmuted. Please join me with the question. Mr. Desai. Good morning, everyone. We will move on to our next question. We will take our next question from Meet Mehta from Sassoon Exponential. Please go ahead.

Hello, am I audible? Yes, you are. Thank you for the opportunity. So, my first question is that, let's say you improve your utilization going forward, and as the new driver of growth comes in, so do we see any impact on realization, like, from, like, high value to lower value work are you doing or something like that?

Any other question you have?

That and also that after like when you are saying the capex, you will decide. So any ballpark, how much you will increase the capacity like from 20 percent, 30 percent. Something like that. Yeah, thank you.

Now, our realizations are quite steady in spite of the geoparticle tensions and the Near-term uncertainties, our realizations are steady. There have been an increase in cost. And with we having a sales price variation formula with all the customers, any increase in cost, we have permission to pass them on. So there is no really effect on the realization. And in terms of capacity expansion, we will be ready with the exact numbers by end July. We are now halfway through our exercises, so you will have to wait till end July. Thank you. Okay, that's excellent. Thank you.

Thank you. Ladies and gentlemen, before we take the next question, I remind you to all the participants, if you wish to ask a question, please press star and one. We will take our next question from the line of Mayor Desai, from Desai Investments. Please go ahead.

Thank you. Thank you for taking my question. I just wanted to highlight that you spoke on the new part development. So, can you please give me a, you know, some color on this? Is this China plus one, or how is the demand for this, and is the demand for this product impacted due to the recent macro developments which are there?

Yeah, like in our case, the new part development is a constant exercise. Close to more than 50 parts are at different stages of development, as and when they are ready, they are sent to customers for approvals, which then get converted into serial supplies. Surprisingly, in spite of the near-term uncertainties and the geopolitical tensions and the Middle East war, and prior to that, Russia-Ukraine war. There has been no impact on the pace of new part development coming to us. In fact, lately we have seen this significantly increasing in the last four to six weeks. And so this has been our constant endeavor.

So, just a follow-up on this, can you please highlight, like, what are the applications of this part, maybe industry-wise or…

Yeah, you know, due to confidentiality results, we may not be able to go too deep into this, but the major end-user industries we supply are mining, earth-moving, construction, locomotives, railroad. So these are the industries where we are receiving new parts development. And the applications will be going into some machines, depending upon which customer and which geography. But basically, these are all coming from these industries, as I said.

Okay. And, sir, if it permits, if you can guide on, you know, the kg, kind of kg the product would come on, like the weight, to be a higher weight products or?

Now, see, these parts come, our capabilities are today 5 kg to 3,500 kg.

Okay.

The new parts come depending on customer requirement in this weight range. So, and we get development orders for all kinds of weight, you know. There is no specific, like, only a particular weight range or so. It's coming, you know, across the entire weight range what we are able to do.

And so, if you can guide on how 27 looks. And, yeah.

So I just said in my speech, which just got concluded some time back, that our smart goal is that we want to grow 20% plus in FY27. And keeping in mind that even for the three-year period, till FY29, we will have year-on-year cumulative growth of 20% plus.

Okay, that's a very good growth, sir. And, sir, just wanted to check on the defense part. Like, are we doing anything working towards defense or we have added few orders?

No, defense, defense, we have really not, we have shifted our focus from defense to various other industries where we see a lot of opportunities and where we have a lot of strengths. So, defense, we do, if it comes across our bandwidth and our capabilities, but the focus is on industries like mining, construction, locomotives, railroad, ground engaging tools. So, this is where the business is coming and this is where we are focusing on.

Sure, sir. Sir, and my last question from my side is that as you guided the growth on the top line, sir, what is the guidance on the margin? Like, is there a scope in margin improvement? And how, where this incremental alpha will come from, sir?

So, if you really see, last several quarters, we've been operating with EBITDA margins anywhere from 28 to 30%. And, you know, pet margins of 18 to 20%. I feel on a sustainable level basis, sustained EBITDA margins of 25-26% is a reasonable thing to expect, you know, going forward.

Perfect. Perfect.

Thank you.

Thank you, sir.

Thank you. A reminder to all the participants. Anyone who wishes to ask a question may press star and one. We will take our next question from the line of Manjoonath K, an individual investor. Please go ahead.

Mr. Chetan Pai, congrats on the wonderful set of numbers in this global turmoil. I got just two small questions. Regarding the rail road, you have stated in the last meeting that critical component was under some stress in this quarter, some development and this. And next is, you have, because of this Iran-US war, there has been an increase in the gas and the petrol prices and logistics. What is the increase and how much will be compensated in the coming years as per our cost plus approach? Then what will be the amount of, third question is, what is the capital expansion in terms of the budget cost And the duration of the project cost. And my last question will be regarding what will be the contribution from the ground engaging tools in this following year, ending 27th, sir.

See, we had some issues on the railroad development we have been doing. We have not been able to solve this. But, simultaneously, we have got a lot of opportunities from, you know, as I just said a little while ago, from mining, earth-moving, construction, locomotives, these industries. And the competitive scenario is much better in these industries than railroad. So while we continue to work on this, but we are encashing the opportunities what we are already seeing. And the growth will come from these five industries, as I just said a little while ago, that for the coming three years we will grow 20% plus. And we will ensure and we are very confident that for the current year FY27, we will also grow 20%. Then comes the increase in cost you asked. Yes, there has been increase in cost which started effective 1st March. There has been, across the board, increase in raw material cost by about 10% or so. Okay. The impact on sales prices will be about 4% to 5%. So, we already got compensated effective 1st April, and balance will come effective 1st of July. Okay. And then... So, and also in my speech, I said that, by and large, we will be covered for this increase in cost, and also the rupee depreciation will also help us. Yes, sir. And with exports of 60% plus, we should be on a good wicket going forward.

Yes, sir.

So, thank you, and thank you for your interest in our company.

Yes, sir. My last question, sir, Q4 of 25-26 was almost 12% higher. What's the reason why it came down, sir, both that and the top line of 25-26 compared to this year, compared to last year?

But I would recommend that you, one should compare, you know, yearly numbers.

Of course, year on year, it's wonderful.

Only the last quarter, last year. But, you know, these are aberrations. This happens. So, I would always see an annual number. So, that's very important for us. And I would also see, I would also see the numbers of the preceding quarter.

Yes, sir. My last question, sir, regarding the ground engaging tools, what is the contribution in this year, and what's the, who are the type of customers, and, I mean, what is the contribution to top line, or, and margin in this line, sir? Ground engaging tools.

In terms of margins, you know, we work on the margins, what you have been seeing. Yes, sir. So, in F1, 26? The ground-engaging tools contribution in total sale was 1.1%.

Yes, sir.

In the next financial year, FY27, we plan to go up to 3.8%.

Yes, sir.

And this comes from our existing customers, you know, but I'm sorry I cannot give you names of customers. It's okay.

That's okay, sir.

Thank you, sir. Thank you. Thanks a lot, sir.

Thank you. Next question is from the line of Aman Srivastava from Bellwether Capitan. Please go ahead.

Hi, sir. Am I okay? Yes, please. Yes.

So, sir, we mentioned about repeat orders from overseas defense. So, sir, can you throw some light on quantum of this order and which property is this if we are comfortable in sharing this?

Thank you. It will be very difficult to, you know, give details on geography and all, but these are parts for compact vehicles, which are generally used in ground wars, and the prototypes have been approved, the prototype batch has been sent, that has been approved, so we are only waiting for, you know, serial supplies, and if everything goes well. We could have sales for this segment in the region of 15 to 18 crores.

Okay, sir. So, sir, is it on the same cost-plus model as a forecasting model? Is pricing margin structurally different in defense? And also, does defense carry working capital

characteristics different from the blended, like 1996, daily receivables? Now the business model for this defense also will be same like our existing customers only, you know, because unless people agree on compensating for cost increases, we don't do business. And that too, we ensure that it's an automatic formula put in place. So if there is cost increases, we get price increase. If there is cost reductions, we give price reductions. And what was the other thing you asked? I missed your second point. Second was, like, does defense carry working capital

characteristics different from your blended 1993 day receivables? Is it longer or shorter?

You mean working capital cycle?

Yeah, yeah.

So by and large, all working capital cycles of... Anywhere ranging from 75 to 110 days. So these products also will fall under that. Okay. Okay, sir. That's all from my head. Thank you. Thank you.

Thank you. Next question is from the line of Sahil Royal from Equinox Capital Venture. Please go ahead.

Hello, sir. Am I available? Yes, please. Sir, my question is on the margin side, with the margin side. Now, we are doing around 28 to 30 percent level of margin, and you are saying, you are guiding in going forward for 25, 26, the decline of 2, 3 percent of the margin. What are the reasons?

No, what I meant was that for longer term, you know, you talk about few years, one cannot expect anything about 25-26%. That is a... EBITDA margin on a sustainable level basis.

Okay.

We may still do 30, but I would recommend to all investors that one should not, one should consider 25-26% as a sustainable level.

Okay, sir. Thank you.

Thank you.

Thank you. Ladies and gentlemen, to ask a question, please play star and one. We will take our next question from the line of Sakhir, Sara, from Zagri Capital. Please go ahead.

I am audible. Yes, please. Yeah, thanks for the opportunity. So, sir, a few questions from my side. So, you have talked about, you know, 100 crore PAT as the, say, aspiration for FY27. But if I look at our current numbers, we are already sitting at, say, around 80, say, 87 crores. So, by that logic, sir, and we are also looking at a 20% top-line growth. So, and add to that, there is a renewal plan that is going to go live, I think, at the end of Q1. So, certainly the PAD growth first should be higher than 20% because, again, there is an additional impact of that cost savings. And on top of that, so it should ideally be more than 25% or percent. So, just your first comment on that growth, sir.

See, this 20% was, I said about volume growth. Okay. The second thing, what we say, volume growth in FI27. The second thing I said was more than 100 crore fat. So, more than 100 crore means it could be 101 or it could be 115 also. But we wanted to be part of this 100 crore. Pat Company Group. Got it, got it.

It's more of an aspiration that you have just highlighted.

Yes, aspiration and strong aspiration and we are going to work very hard on this.

Fantastic, sir. So by that logic, I think our next aspiration will be 1000 crore kind of, right? By FY29, it's not 30 because you are looking at say doubling our revenue in the next three years. Is that a fair assessment?

So what I said was that another aspiration what we have is Within the present capacities, we want to double the volumes. So, if the volume was 430 crores in FY27, theoretically, that number should be 860 crores in FY29. Okay? Thank you.

Okay. Another question is, you know, if I look back at our data, last time we had some challenge despite being a very robust company on multiple parameters because of concentration within geographies as well as, say, client. But I think as I increasingly look at your commentary, and I've been an investor in this company for multiple quarters now, that you have made a lot of effort on diversifying both geographically as well as industry-wise. So, sir, just one request, you know, if in subsequent slides, can we give us, say, a breakup of our, say, revenue in terms of both sector-wise, Like auto, non-auto, or earth moving, or ground moving. And second, a bit more color on the exports breakup, you know, like North America, or is there a, because that would just give us a, and if you can showcase this, say, more of a, say, long-term kind of a trend, like how we were, say, in 15, 20, 25, and so that would give us a better understanding. Well, of course, the data definitely shows and your commentary shows that diversification is very much underway. So, will that be possible, sir, to get data at the annual level, sir?

Sir, your suggestion well taken, and we will try and implement this from first quarter of FY27. Thank you.

Okay, sir. Thanks, Anand. Best of luck for the first quarter. Thank you, sir. Thank you. Thank you.

Thank you. A reminder to all the participants, if you wish to ask a question, please press star and 1. Sir, we will take the next question from Manju Nath K., an individual investor. Please go ahead.

Chetan Bhai, when you see our resource and surplus have to do it consistently, any thoughts on any bonus issues? It will increase our, what do you call, acceptance, and I think bonus is not issued for quite long, you know. Any thoughts on this? And capital is just 10.1 crores.

Yeah, yeah. So, I think a very good question. So, there are several things we are thinking, not able to decide, not able to decide on what we should do. But as of now, there is nothing in the horizon, I should tell you frankly. But we will try and make sure that whatever we do is in the larger interest of all our 16,000 shareholders.

Yeah.

Thank you, sir. Thank you. Thank you.

Thank you. Ladies and gentlemen, to ask a question, please press star and one. As there are no further questions, I now hand the contents over to the management for closing comments.

Okay. Thank you. And on behalf of E-Cast, I want to thank everyone who was on this call. I also want to thank Ernst and Young. Who are our advisors? And also the Steelcast management team for robust performance. And we meet in the investor call of Q1 FY27. Thank you all. Thank you.

Thank you very much. On behalf of Steelcast Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.