Nelcast Limited

Industrials — Metal Fabrication · NSE

₹135.26+₹5.14 (+3.95%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

The 60-second version of Nelcast Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Nelcast Limited manufactures and sells ductile and grey iron castings in India and internationally.

IndustryMetal Fabrication

SectorIndustrials

Employees1,334

Annual revenue₹1,319 Cr

How does it make money?

Turns over ₹1,319 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 1,334 employees supports ₹98.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹98.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 12.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE18.7%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +5% while net margin moved +55% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+5%

Margin effect+55%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 8.1% is weak

Quality vs. Valuation

Company Quality

56/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

48/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

28.6x

3Y Median

27.0x

40 monthly readings · mean 29.9x · range 13.3x–50.3x

Sector Median

12.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 27.0x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 135% above the peer median of 12.2x.

vs. its own history

Fair

27.0x median over 40 months · +6%

vs. sector peers

Expensive

12.2x median of 4 peers · +135%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.9x

PEG

1.62

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 7.0% to 8.6% over 3 years.
Debt is being paid down
Total debt is down 15% over 3 years.
Cash generation is improving
Free cash flow is up 22% over 3 years.
Return on capital is rising
ROCE has improved from 10.4% to 12.6%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Receivables growing faster than salesFinancial
Receivables up 39% against revenue up 5% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 7.0% to 8.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 15% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹74 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 39% against revenue up 5%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 135% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 1.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 7%✓ 8.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Revenue growth stays above 4% a year✗ 1.6% CAGR
Latest reported year was 2.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹74 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 10%✓ 12.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 7 neutral · 1 weak

Market Cap

₹1,180 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

28.6x

Fair

Fairly valued against the generic band

P/B Ratio

1.97x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.73

Profitable

Profitable on a per-share basis

ROE

8.1%

Moderate

Moderate capital efficiency

ROCE

12.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.43x

Low

Conservative leverage

Revenue Growth (YoY)

2.8%

Modest

Modest growth

Profit Growth (YoY)

-59.0%

Falling

Profits are shrinking

Dividend Yield

0.52%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹74 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

30.5x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

2.6%

Weak

Thin margins leave little room for error

Net Margin

3.1%

Average

Average bottom-line conversion

Current Ratio

1.31

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.40

Defensive

Steadier than the market

52W Range Position

57%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

124.6 / 119.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

64.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,258 Cr	₹1,258 Cr	₹1,240 Cr	₹1,319 Cr	+1.6%
EBITDA	₹88 Cr	₹99 Cr	₹97 Cr	₹114 Cr	+8.7%
EBITDA Margin	7.0%	7.8%	7.8%	8.6%	—
PAT (Net Profit)	₹30 Cr	₹54 Cr	₹37 Cr	₹48 Cr	+17.7%
EPS	₹3.42	₹6.25	₹4.29	₹5.57	+17.7%
ROE	6.3%	10.5%	6.7%	8.1%	—
ROCE	10.4%	13.9%	11.2%	12.6%	—
Total Debt	₹304 Cr	₹329 Cr	₹294 Cr	₹257 Cr	-5.4%
Free Cash Flow	₹61 Cr	-₹43 Cr	₹12 Cr	₹74 Cr	+6.9%

🟡 Revenue has been broadly flat over 3 years (1.6% a year).

🟢 EBITDA has grown at 8.7% a year over 3 years.

🟢 EBITDA Margin has risen from 7.0% to 8.6% over 3 years (+1.6 pts).

🟢 PAT (Net Profit) has grown at 17.7% a year over 3 years.

🟢 EPS has grown at 17.7% a year over 3 years.

🟢 ROE has risen from 6.3% to 8.1% over 3 years (+1.8 pts).

🟢 ROCE has risen from 10.4% to 12.6% over 3 years (+2.2 pts).

🟢 Total Debt has shrunk at 5.4% a year over 3 years.

🟢 Free Cash Flow has grown at 6.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,199 Cr

Total Liabilities

₹599 Cr

Cash & Equivalents

₹85 Cr

Operating Cash Flow

₹92 Cr

Capex

-₹18 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

80.5%

Corporate Actions

Dividend Rate

₹0.7

Ex-Dividend Date

20 Jul 2026

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

1 positive5 general

Nelcast (NSE:NELCAST) Could Be A Buy For Its Upcoming Dividend

Simply Wall Street, 16 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Nelcast Stock Breakout and Technical Outlook

Kalkine India, 07 Oct

Nelcast vs Nifty 50: Share Price Performance Compared

Univest, 08 Oct

Nelcast Limited announces 44th AGM on July 27, 2026

scanx.trade, 27 Jul

Subdued Growth No Barrier To Nelcast Limited's (NSE:NELCAST) Price

Simply Wall Street, 04 Feb

Adani Ports, CG Power, Balu Forge, Nelcast: Strategy, share price targets, stop loss

Business Today, 30 Apr

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingBusiness Quality · Valuation · Risk

WeakProfitability

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Revenue growth stays above 4% a year · see Key things to watch ↑