20% Upper Circuit: Stock skyrockets after reporting 234% QoQ increase in net profits

Synopsis: Nelcast Limited shares surged 20% after its results, with revenue rising 10.3% QoQ from ₹299 crore to ₹330 crore, and net profit jumping 234% from ₹4.76 crore to ₹15.9 crore, and its Eps for the Quarter stood at ₹1.83. 

The shares of the Small-Cap company specializing in manufacturing high-quality ductile and grey iron castings, serving as India’s largest jobbing foundry, are in focus as they have rallied 20 percent in a single day following their Q3 results.

With a market capitalization of Rs. 1,178.00 Crores on the Day’s Trade, the shares of Nelcast Limited hit a 20 percent upper circuit, reaching a high of Rs. 144.06 compared to its previous close of Rs. 120.05.

What Happened

Nelcast Limited, engaged in manufacturing high-quality ductile and grey iron castings, is in the spotlight today as it has rallied 20 percent in a single day following its Q3 results as follows:

Its Revenue from operations rose by 13.4 percent YoY from Rs. 291 Crores in Q3FY25 to Rs. 330 Crores in Q3FY26, and it rose by 10.3 percent QoQ from Rs. 299 Crores in Q2FY26 to Rs. 330  Crores in Q3FY26.

Its Net Profit YoY rose by 166 percent from Rs. 5.98 Crores in Q3FY25 to Rs. 15.9 Crores in Q3FY26, and on a QoQ basis, it rose by 234 percent from Rs. 4.76 Crores in Q2FY26 to Rs. 15.9 Crores in Q3FY26. The earnings per share (EPS) for the quarterly period stood at Rs. 1.83, compared to Rs. 0.55  in the previous year’s quarter.

Revenue Segmentation

In 9MFY26, M&HCVs contributed 40% to the business, up from 37% in 9MFY25, showing a modest growth in heavy and medium commercial vehicle sales. Tractors also saw a slight increase from 24% to 26%, while exports decreased from 35% to 29%, indicating low international demand.

However, railways, off-highway equipment, and other segments remained unchanged, with Railways Off-highway equipment, and others staying constant at 2% and 1% respectively, reflecting steady performance in these smaller categories.

Nelcast Ltd, incorporated in 1982, manufactures grey and ductile castings for the M&HCV and tractor segments, with 30–35% of revenue coming from exports. The key products forM&HCV clients include differential carriers, differential cases, bogie suspension brackets, and conventional brackets.

For the tractor segment, the company’s key products include transmission casings, centre housings, axle housings, and hydraulic lift covers. It also supplies base plates for metro rail projects and brake discs for the railways. Nelcast has an aggregate installed production capacity of 160,000 tonnes per annum, with factories located in Ponneri (Tamil Nadu) and Gudur and Pedapariya (Andhra Pradesh).

The company demonstrates a decent financial performance with a ROCE of 9.55% and a ROE of 6.48%, indicating moderate efficiency in generating returns on capital and equity. Its debt-to-equity ratio of 0.52 reflects a conservative leverage position, while a PEG ratio of 0.75 suggests the stock may be undervalued relative to its earnings growth potential. 

Outlook for FY26: Nelcast expects healthy growth in domestic demand, driven by steady market consumption. Exports are projected to recover gradually as global conditions improve. The company’s strong new product pipeline is expected to support revenue growth and strengthen its market position. Overall, FY26 looks promising with balanced growth across domestic and international markets.

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