Steelcast Limited Navigates Global Headwinds with Strong Q2 FY26 Performance

Steelcast Limited, a prominent player in the Indian steel casting industry, has reported a robust financial performance for the second quarter and half-year ended September 30, 2025 (Q2 FY26 & H1 FY26). The company's results highlight its resilience and strategic agility amidst a dynamic global economic landscape, driven primarily by a significant surge in demand from the export market.

For Q2 FY26, Steelcast's revenue from operations witnessed a substantial 42% year-on-year growth, reaching INR 106.7 crore. This impressive top-line expansion translated into enhanced profitability, with EBITDA climbing by 62% to INR 34.2 crore, and the EBITDA margin improving to 32.0%. Profit Before Tax (PBT) also saw a remarkable 73% increase, touching INR 30.9 crore, reflecting improved operational efficiency and disciplined cost optimization efforts. The half-year performance mirrored this positive trend, with H1 FY26 revenue growing 40% to INR 213.3 crore and PAT increasing by 64% to INR 43.1 crore.

Financial Highlights: A Snapshot

Strategic Initiatives and Market Positioning

Steelcast's management highlighted several strategic initiatives aimed at sustaining growth and enhancing operational efficiency. A significant project involves the commissioning of a 2.4 MW hybrid power plant by June 30, 2026. This initiative is expected to generate annual power cost savings of approximately INR 3.5 crore to INR 4 crore, contributing to enhanced cost efficiency and sustainability as the company anticipates increased volume requirements in FY27.

The company is also actively diversifying its product offerings and market reach. It has successfully developed over three dozen new components for the Ground Engaging Tools (GET) and construction industry segments, with initial orders already being executed in Q2 FY26. This expansion into new product lines is expected to be a key growth driver. Furthermore, Steelcast is broadening its export footprint, currently serving 15 countries and aiming to expand to 18+ countries within the next one to two quarters. This geographical diversification is crucial in mitigating risks associated with specific markets.

Navigating Global Challenges and Future Outlook

Despite the strong performance, management acknowledged potential moderation in Q3 FY26 due to softer demand visibility and near-term geopolitical uncertainties, particularly related to US tariffs. However, Steelcast maintains a solid cost advantage, with its products being 5% to 13% more competitive than Chinese alternatives for key US-bound categories. This competitive edge helps the company retain its customer base, as clients are reluctant to change suppliers despite tariff-induced cost increases.

Looking ahead, Steelcast projects double-digit revenue growth for FY26, with a long-term target of 20% CAGR over the next three years. The company expects its operations to normalize from Q4 FY26 onwards. Sustainable EBITDA margins are anticipated to hover between 25% and 26% in the long term, with potential to reach 28%-29% through further cost reductions and productivity improvements. The management also expressed confidence in crossing the INR 1,000 crore turnover mark by FY29, underscoring its ambitious growth trajectory and strategic clarity.

Steelcast's ability to deliver strong financial results while proactively addressing market challenges through strategic investments, product diversification, and geographical expansion positions it as a resilient and forward-thinking entity in the steel casting industry. The company's focus on operational excellence and sustainable growth initiatives instills confidence in its long-term prospects.