Alicon Q4 FY26: Record Revenue, But Margins Stay Under Pressure

Alicon Castalloy closed Q4 FY26 with its highest ever quarterly topline. Consolidated total income rose to INR 495.4 crore, up 16% year-on-year and 15% quarter-on-quarter, supported by strong domestic demand and a partial pass-through from higher aluminium prices. Profitability, however, did not track revenue growth. EBITDA for the quarter fell 3% YoY to INR 46.2 crore and the EBITDA margin declined to 9.3% from 11.2% a year earlier.

For the full year, the picture was more balanced on operating performance but weaker on net profit. FY26 consolidated total income increased 4% YoY to INR 1,784.5 crore and EBITDA rose 3% YoY to INR 203.3 crore. PAT declined to INR 34.4 crore from INR 46.1 crore in FY25, impacted by an exceptional provision related to labour codes, higher depreciation and the flow-through of gross margin pressure.

What moved the quarter: domestic strength and aluminium pass-through

Management attributed Q4’s topline momentum primarily to the domestic business, with passenger vehicle and commercial vehicle programs holding up well and improving traction in two-wheelers. The company also noted that aluminium and alloy prices increased sharply, which raised reported revenue through pass-through mechanisms.

The same dynamic weighed on percentage margins. In the investor presentation, gross profit was reported at INR 223 crore with a 45% gross margin, down 248 bps YoY. Management clarified on the call that aluminium price increases are largely pass-through and should avoid losses over time, but they can temporarily compress percentage margins due to timing and denominator effects.

The company’s revenue mix continues to be heavily automotive-led. In Q4 FY26, auto contributed 95% of revenue and non-auto 5%. Geographically, 81% of revenue was domestic and 19% global.

Costs, depreciation and one-time items: why PAT stayed soft

The main pressure points for Q4 and FY26 were not only raw materials. Management cited inflation in overheads such as packaging, logistics and freight, along with higher depreciation stemming from growth investments. In the Q&A, the CFO indicated that Q4 included roughly INR 15 crore of additional costs versus prior quarters, described as one-time costs and provisions. For the full year, management referenced one-time expenses of around INR 25 to 26 crore, including labour-code related items and certain write-offs.

Depreciation rose sharply in Q4 FY26 to INR 26.9 crore (from INR 22.3 crore in Q4 FY25). For FY26, depreciation and amortization increased to INR 105.8 crore from INR 91.3 crore in FY25.

The company also highlighted that finance costs improved, supported by working capital discipline and balance sheet management. Q4 finance costs were INR 9.4 crore versus INR 12.3 crore in Q4 FY25.

A dividend of INR 2 per share was recommended for FY26, reaffirming management’s stance on shareholder returns despite a lower PAT.

Strategy and capacity: FY27 is positioned as a build year

The call was also notable for a strategic reset narrative, as Sumit Bhatnagar took over as CEO effective 1 April 2026. He described FY27 as a year to refocus, reset and rebuild, with emphasis on strengthening the foundation across processes, technology and people.

A key constraint repeated through the discussion was capacity. Management indicated that large customer RFQs are increasing, but the ability to convert those opportunities depends on creating incremental capacity and machining capability. The company said it expects at least one new manufacturing factory site in FY26-27 and that a site has been earmarked and finalized.

Capex guidance for FY27 was INR 130 to 150 crore, targeted toward die casting capacity expansion, machining capabilities, automation and the new plant. Management also indicated that around INR 50 crore would be maintenance capex, with the rest for new projects and expansion.

Order book visibility and non-auto green shoots

Management disclosed an executable order book of around INR 7,600 crore as of March 31, spanning six years from FY25-26 to FY30-31. The company also stated it performed a revalidation exercise during Q4 to improve visibility and the quality of the executable pipeline. Some programs were removed where customer volumes had not materialised despite advanced development stage.

On business development, the company cited two Q4 wins: one in ICE for a premium two-wheeler customer in India, and another in non-auto for a turbo core compressor component used in data centres. While non-auto is still only 5% of revenue, the data-centre component was positioned as an entry into a new product category.

Key takeaways

Alicon delivered a record topline quarter and sustained full-year EBITDA growth, but profitability remains sensitive to aluminium price dynamics, overhead inflation and rising depreciation. For FY27, management guided to 8% to 10% revenue growth excluding aluminium volatility and indicated a margin improvement aspiration, while keeping its tone cautious given commodity, energy and wage-related uncertainties. The central execution lever appears to be capacity expansion, with a new plant and higher automation and machining capability expected to support the company’s medium-term growth ambitions.