Nelcast Ltd

Dear Shareholders,

The global economy has shown impressive resilience, maintaining a steady trajectory of growth despite various challenges. The International Monetary Fund (IMF) projects an encouraging global growth rate of 3.2% by 2025, alongside a forecasted decline in inflation. Developed countries are at the forefront of achieving their inflation targets, setting a positive example for emerging markets.

In India, the economy has seen significant expansion in FY24. The Union Budget's substantial increase in capital expenditure is poised to drive further progress in infrastructure development. The economic fundamentals of our nation remain robust and reliable.

Reflectingon FY24, our journey has been marked by overcoming obstacles and celebrating achievements. The latter part of the year brought about a slowdown in demand, influenced by the general elections, which particularly affected our Medium & Heavy Commercial Vehicles (M&HCV) segment and the subdued tractor market.

Despite challenges, I am pleased to report that our export division has shown remarkable strength. We have achieved an impressive 35% growth in exports year-on-year, culminating in a notable 445 crores in export revenue. This success is part of an ongoing narrative of strong growth, underscored by a seven-year compound annual growth rate (CAGR) of approximately 40% since FY18. Moreover, our EBITDA per kg has increased by 10% year-on-year to 12.48 in FY24, up from 11.34 in FY23, reflecting our improved operational efficiency. In our commitment to sustainability and cost efficiency, our Pedapariaya Plant in Andhra Pradesh has adopted renewable energy by commissioning a 1 MW solar emissions. Looking power facility, significantly ahead, we expect robust growth in the M&HCV segment, driven by increased infrastructure investment and a corresponding rise in demand for tippers, which are integral to our revenue and have substantial casting requirements. We are confident that our M&HCV segment will maintain its upward momentum in the coming year.

As we move forward, we are optimistic about the export market's prospects, with anticipated growth driven by higher volumes and the introduction of new products. In the domestic market, we foresee a resurgence in the Commercial Vehicle industry in the second half of FY25. Supported by strong export growth, a dedicated team, and continuous operational enhancements, we are well-prepared to deliver a good performance in the next fiscal year. Our strategic initiatives and resilient business model enable us to navigate market fluctuations and seize growth opportunities.

Our company is dedicated to enhancing its environmental and social contributions. We currently use substantial portion of our power requirements through renewable sources. We also actively participate in community support initiatives, including healthcare and education. I wish to express my deep appreciation to our employees, whose diligence and dedication are the cornerstone of our success, and to all our stakeholders for their steadfast support in our journey.