Nelcast Ltd – Good Growth

Nelcast Ltd reported 37.2% YoY top line growth to Rs 1139.2 mn for quarter ended March 2008 compared to corresponding quarter last year. For FY08, Net sales reported growth of 16.6% YoY to Rs. 3564.5 mn as compared to Rs 3057.6 mn in corresponding period last year. The company reported 10.1% YoY growth in EBDITA in Q4FY08 to Rs 127.1 mn compared to corresponding quarter last year. For FY08, EBITDA witnessed growth of 18% YoY. Total expenditure witnessed increase of 43.8% YoY during the fourth quarter mainly due to increase in raw material costs and other expenses. The company reported decline in its EBDITA margins by 410 basis points to 9.7% in Q4FY08 compared to 13.8% in Q4FY07.However for full year FY08, It maintained its EBDITA margins at around 13%.

Nelcast is set to be major beneficiary of accelerating trend of sourcing of auto components due to its high skilled labors, lower wage costs and proven track record.