Alicon Castalloy Limited — Q4 FY26 earnings call

Call held 13 May 2026

Management summary

Alicon Castalloy delivered a resilient Q4 and FY26 performance, achieving record quarterly revenue and securing strategic new orders, despite facing global macroeconomic volatility and inflationary pressures. The company is strategically investing in capacity expansion, automation, and organizational strengthening to capitalize on a robust domestic market and a substantial order book, targeting 8-10% revenue growth and 12.5-13% EBITDA margins for FY27.

Highlights

  • Q4 FY26 Revenue reached ₹495 crore, reflecting a healthy 16% year-on-year growth and marking the highest ever quarterly revenue reported by the company.

  • FY26 Total Income grew by 4% year-on-year to ₹1,784 crore, primarily driven by strong domestic automotive market performance in the second half of the year.

  • Alicon secured new orders for a critical part for a premium 2-wheeler customer in India and a turbo core compressor component for data centers, entering a new product category and addressable market.

  • The executable order book stands at approximately ₹7,600 crore as of March 31, 2026, providing visibility for 6 years.

  • Over 50% of Alicon's overall power requirement is now met through renewable resources, primarily solar energy, significantly strengthening operational resilience.

Concerns

  • Q4 FY26 EBITDA decreased by 3% year-on-year to ₹46 crore, impacted by inflationary trends in cost heads and the base effect of higher aluminum prices.

  • FY26 PAT declined to ₹24 crore from ₹46 crore in FY25, after absorbing an ₹8 crore impact from new labor code and exceptional items.

  • Gross margin in Q4 FY26 stood at 45%, reflecting a 248 basis points year-on-year reduction due to product mix changes and elevated aluminum prices.

  • Labor costs at the North India factory (Binola) are expected to increase by approximately 35% due to a minimum wage hike in Haryana, with potential for similar revisions in other states.

Key financials

2 periods

Headline

  • Revenue
    ₹495 Cr
    YoY +16%
  • Gross Margin
    45%
    YoY -2.5%
  • EBITDA
    ₹46 Cr
    YoY -3%
  • PAT
    ₹8 Cr
    YoY -11% QoQ +141%

FY26

  • Total Income
    ₹1,784 Cr
    YoY +4%
  • EBITDA
    ₹203 Cr
    YoY +3%
  • PAT
    ₹24 Cr
    YoY -48%

What they filed

Q1 FY27: revenue up 38.3%, net profit up 22.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue464 392 425 418 428 −8%430 +10%495 +16%578 +38%
EBITDA56 34 47 49 55 −2%44 +29%46 −2%54 +10%
Net profit17 1 9 9 14 −18%3 +200%8 −11%11 +22%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • 2-wheeler (FY26 Growth)
    42% Growth
  • Passenger Vehicle (FY26 Growth)
    34% Growth
  • Commercial Vehicle (FY26 Growth)
    18% Growth
  • Non-Auto (FY26 Growth)
    6% Growth
  • Deemed Export (FY26 Growth)
    20% Growth

Order book

high confidence

Total value

₹7,600 Cr

as of 2026-03-31 quantified

Execution

executable over a period of 6 years from FY '25-'26 to FY '30-'31

Cancellations & deferrals

  • removed from backlog: Certain completed programs naturally moved out of the order book, while a few programs, where customer volumes had not materialized despite advanced development stage were also rationalized and removed from the backlog. These include two large global players as well as two prominent customers in India.
The order book has been revalidated and updated to reflect current market dynamics and includes new orders from FY26, which are expected to generate ₹140 crore yearly sales at peak and ₹500-600 crore over 3-4 years.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹130 Cr New plan · entirely through the internal accruals
    • Maintenance capex ₹50 Cr
    • New projects and expansion (including increasing capacities for die casting, machining abilities, and a new manufacturing plant) ₹80 Cr
    • Cybersecurity and automation
    So just to give you a rough estimate, around 50 crore of capex is going to be a maintenance capex and rest of the capex is going to be for the new projects and expansion... At this moment, we have planned in our cash flow planning that it will be funded through the internal accruals.
  • Dividend ₹2/share (final)
    In view of the company's resilient performance despite a challenging operating environment, the Board of Directors has recommended a dividend of ₹2 per share for FY '26.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY27 · Medium confidence 8-10%
    Definitely, we are looking for a modest growth of around 8% to 10% without taking care of the aluminium volatility

    — Sumit Bhatnagar

Profitability

  • EBITDA Margin Profitability · FY27 · Medium confidence 12.5-13%
    So 1.5%, maybe 12.5% to 13% we can say for the year.

    — Vimal Gupta

Capex

  • Capital Expenditure Capex · FY27 · Medium confidence ₹130-150 crore
    if you ask about the numbers, I think give and take, we are looking for a capital expenditure of anywhere between 130 crore to ₹140 crore or 150 crore.

    — Sumit Bhatnagar

Capacity

  • New Manufacturing Factory Sites Capacity · FY27 · High confidence minimum one
    You will see FY 2026-27, definitely minimum one new manufacturing factory site coming for Alicon.

    — Sumit Bhatnagar

Efficiency

  • Asset Turnover (New Business) Efficiency · New Business · High confidence 2.5 to 3 times
    See generally from the new business, our target is always between 2.5 times to 3 times at least.

    — Vimal Gupta

What to watch in Q1 FY27

FY27 Revenue Growth

Next quarter (Q1 FY27 results) and subsequent quarters.
Current FY26 Total Income grew 4% YoY.
Target 8-10% YoY growth.

Why it matters

Key indicator of the company's ability to execute on its domestic market focus and leverage new order wins amidst market volatility.

Definitely, we are looking for a modest growth of around 8% to 10% without taking care of the aluminium volatility

Risks & concerns

  • Volatile macroeconomic conditions and geopolitical tensions

    high

    Contributed to increased uncertainty, volatility in energy prices, inflationary pressures, and supply chain disruptions in Q4 FY26.

    Management acknowledged

  • Inflationary pressures on commodity and input costs

    high

    Increased costs for aluminum, steel, copper, energy, freight, and packaging could pressure margins in FY27 due to timing lags in pass-through.

    Management acknowledged

  • Increased labor costs due to minimum wage hike

    medium

    A ~35% increase in minimum wages in Haryana will impact the North India factory, with potential for similar revisions in other states.

    Management acknowledged

  • Global market demand softness and export volume challenges

    medium

    Customer-specific issues and softer demand in select export markets continued to weigh on volumes, though domestic strength partially offset this.

    Management acknowledged

Q&A highlights

7 direct
FY27 Revenue and Long-term Growth Strategy Direct
Definitely, we are looking for a modest growth of around 8% to 10% without taking care of the aluminium volatility... if you really look at the short term, the first most important thing for us at Alicon is to expand our footprint. You will see FY 2026-27, definitely minimum one new manufacturing factory site coming for Alicon.

Provides clear top-line guidance for the upcoming fiscal year and outlines key strategic initiatives like footprint expansion and domestic market focus.

Asked by Raghunandhan NL

Q4 FY26 Other Expenses and One-off Costs Direct
in quarter 4... there is an impact of the aluminium... So approximately, we are seeing that 30 crore, 35 crore... And second... approximately 15 crore additional cost, those were not there when we compare in the quarter 3 or maybe earlier quarters that has come and we have considered in quarter 4.

Explains the drivers behind the higher operating costs and lower EBITDA in Q4, distinguishing between commodity price impact and one-time expenses.

Asked by Raghunandhan NL

Past Performance Issues (JLR) and Future Growth Outlook Direct
The good news is we have recently seen the vehicle [JLR]... Our supplies have started. Eventually, there has been a significant delay of, I would say, in short... But for this product has been one of the most complicated developments of Alicon so far... We have now gone back to some of the major Indian OEMs, where we have traditionally not been supplying. And I am very happy to share that we already have won business from each one of them.

Addresses the reasons for past underperformance, specifically the JLR project delays, and highlights the shift in strategy towards strengthening domestic OEM relationships.

Asked by Riddhesh Gandhi

FY27 Margin Guidance and Conservatism Partial
I can only tell you at this point of time that the bottom line and the profitability, as I have also said in the beginning is going to be one of the major focus areas, which is not limiting to getting more businesses, but also to improve our internal efficiencies, productivities and other things... Still we are in a state where the market is volatile, we still have not completely got over from the energy prices and the various escalations.

Explains management's cautious stance on margin guidance for FY27, attributing it to ongoing market volatility and internal focus on efficiency rather than just top-line growth.

Asked by Riddhesh Gandhi

Impact of Past Capex and Asset Utilization Direct
whenever we do a capital planning, generally, you can believe that almost 50% of the capital planning is always maintenance capex... if you talk about the new capex, yes, we have invested significantly on projects like JLR... We have been investing on automation... While I do not have an immediate break-up of all the numbers what we have said, but I can only tell you that we have been very vigilant in spending.

Clarifies the nature of past capex, distinguishing between maintenance and growth-oriented investments, and assures investors of a focus on returns despite current utilization levels.

Asked by Preet Pitani

Daimler Order Execution and Size Direct
This order is executed now. I mean, there are ideally 18 parts out of that, 60% PPAP is through and parts have streamlined. Another eight parts will go in next two quarters. So, on a peak sale, this would be somewhere around 80 crore to ₹90 crore yearly sales.

Provides an update on a significant order, confirming its execution and quantifying its potential annual revenue contribution.

Asked by Preet Pitani

FY26 Domestic Market Share and Segment Growth Direct
we have not lost any market share. I think in fact, if you look at our two-wheeler segment, we have done better than last year. And, in fact, our market share has gone up... in the PV side, we supply to some bigger OEMs in some specific models, where our shares are substantially high. So, this could have been the reason why the entire growth is also not reflecting in our domestic growth.

Addresses concerns about market share, clarifying that growth might not be fully visible due to focus on specific models and segments, while confirming share gains in 2-wheelers.

Asked by Preet Pitani

Funding for FY27 Capex Direct
At this moment, we have planned in our cash flow planning that it will be funded through the internal accruals.

Provides clarity on the funding strategy for the planned capital expenditure, indicating no immediate reliance on external debt.

Asked by Preet Pitani

3 min read 7 chapters

Detailed narrative

Industry Transformation and Strategic Focus

Alicon Castalloy is navigating a significant automotive industry transformation driven by electrification, premiumization, lightweighting, and technology integration. The company's strategy for the coming years centers on three growth themes: deepening customer relationships, expanding manufacturing capabilities and footprint, and strengthening organizational depth. This includes investing in capacity enhancement, automation, machining, and process capabilities both organically and through selective inorganic opportunities.

Q4 & FY26 Financial Performance Overview

For Q4 FY26, Alicon reported a record revenue of ₹495 crore, a 16% YoY increase, primarily driven by robust domestic demand. However, Q4 EBITDA decreased by 3% YoY to ₹46 crore, and gross margin reduced by 248 basis points to 45%, impacted by inflationary costs and product mix. For the full FY26, total income grew 4% YoY to ₹1,784 crore, with EBITDA increasing 3% to ₹203 crore, but PAT declined significantly to ₹24 crore from ₹46 crore in FY25 due to one-time costs and higher depreciation.

Order Book and Business Development

The company's executable order book stands at approximately ₹7,600 crore as of March 31, 2026, spanning a 6-year period (FY25-26 to FY30-31). This includes new orders secured in FY26 for 14 parts from 7 customers, expected to generate ₹140 crore in yearly sales at peak and ₹500-600 crore over 3-4 years. Notably, Alicon secured orders for a critical part for a premium 2-wheeler and a turbo core compressor component for data centers, marking entry into a new non-auto product category.

Capital Expenditure and Funding

Alicon's capital expenditure for FY26 was ₹135 crore, focused on automation, machining capabilities, and capacity augmentation. For FY27, the company plans a capex of ₹130-150 crore, with approximately ₹50 crore allocated to maintenance and the remainder for new projects and expansion, including at least one new manufacturing factory site. This planned capex will be entirely funded through internal accruals, demonstrating prudent financial management.

Operating Environment and Cost Pressures

While the domestic market remained resilient, the global operating environment in Q4 was challenging due to macroeconomic volatility, Middle East tensions, and persistent inflationary pressures on commodities like aluminum, steel, and copper, as well as energy and freight costs. The company noted a timing lag in passing through aluminum price increases, which, along with one-time costs of approximately ₹25-26 crore in FY26 (including a ₹8 crore impact from new labor codes), exerted pressure on profitability.

Organizational Strengthening and Efficiency Initiatives

Alicon has significantly strengthened its leadership team across various functions and is committed to building a scalable, future-ready organization. To mitigate rising labor costs, such as the ~35% increase expected at its Haryana factory due to minimum wage hikes, the company is investing in automation, productivity enhancement, and operational efficiency initiatives, expecting these to meaningfully absorb the impact over the medium term.

FY27 Outlook and Margin Expectations

For FY27, Alicon is targeting a modest revenue growth of 8-10%, excluding aluminum price volatility. Management expects EBITDA margins to improve to 12.5-13% for the year, up from the current levels, driven by internal efficiencies and the resolution of one-time costs. The company aims for an asset turnover of 2.5 to 3 times for new businesses, emphasizing a focus on margin improvement alongside growth.

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