Chennai: Leading iron casting manufacturer Nelcast Limited reported a 58.9% year-on-year drop in net profit to ₹5.14 crore for the quarter ended June 30, 2026, down from ₹12.50 crore in Q1 FY26.
The company has attributed this to a mismatch between rising input costs and sales realisations, with operational revenues increasing by just 2.77% to ₹341.05 crore.
Along with that, the company’s EBITDA margins have also halved to 5.8% as a result, with raw material and operational cost increases impacting margins immensely. The cost of materials consumed has increased to 9.28% YoY to ₹154.05 crore.
Though Nelcast did not face any challenges with demand across its core automotive and agricultural sectors, it has had to absorb the rising prices of key inputs like pig iron and steel scrap before contractual price revisions with its OEM clients could take effect.
“Nelcast delivered a steady performance in Q1 FY27, supported by healthy demand across its key end markets. The tractor and commercial vehicle segments continued to witness strong momentum, while exports recorded a sequential improvement during the quarter, reflecting encouraging demand trends. Profitability during the quarter was impacted by temporary factors, including elevated raw material costs arising from geopolitical developments and labour availability constraints across the industry. We have initiated price revision discussions with customers, and the benefits of these measures are expected to be realized gradually over the coming quarters.
A key highlight for us is the commencement of production for new products during Q2 FY27. These programs are expected to progressively ramp up through the year and contribute meaningfully to volumes and revenues by the second half. In parallel, we expect capacity utilisation to improve as demand strengthens and new product volumes scale up. We also continue to make steady progress in expanding our customer relationships across Europe and have secured new business opportunities that strengthen our long-term growth pipeline.
Beyond the near-term operating environment, we believe the Company is at an important inflection point. With new product programs ramping up, customer additions gaining traction, exports improving and utilisation levels expected to rise, the foundations are being laid for the next phase of growth, positioning Nelcast to create substantially greater value in the years ahead.” Mr. Deepak Reddy Ponnavolu, Managing Director & CEO of Nelcast, said in a press release to the bourses.
