Iron-castings manufacturer Nelcast is expanding its product base to cater to the off-road vehicle industry.

The company — which primarily supplies casting components to automobiles, tractors and the railways — is developing a range of castings for use in construction and earth-moving equipment.

The range includes small and large castings for use in non-critical and critical applications, such as force transmission and load-bearing.

“It is important to cater to a larger customer base and also reduce risk of the market dynamics. And earth-moving equipment fits well with our product profile,” said Mr S. Radhakrishnan, Managing Director.

“We have signed up with a few international players in the Indian market. There is also potential for export. Some of the products could be commercially launched by the end of this fiscal year,” said Mr Radhakrishnan.

These castings are being developed at Nelcast's foundries in Gudur (Andhra Pradesh) and Ponneri (Tamil Nadu).

The two foundries have a total capacity of 1.5 lakh tonnes annually. Currently, they are operating at one lakh tonnes annually. “We are looking at capacity optimisation at both foundries,” said Mr Radhakrishnan.

Heavy commercial vehicles account for 45 per cent of Nelcast's business, while tractors contribute 35-40 per cent. The rest comes from the railways and other segments.

Exports make up 5 per cent of the business. Nelcast exports to Sweden, North America and Australia. “There is potential to expand this,” said Mr Radhakrishnan.

The company's annual report for financial year 2011 says Nelcast is also looking to enter a niche industry. Mr Radhakrishnan, however, declined to share details.

The company clocked sales of Rs 507.40 crore in the financial year 2011, registering a year-on-year growth of 59 per cent. It recently announced a stock split to raise liquidity.

The Nelcast share was down 1.21 per cent at Rs 24.55 on Friday on the Bombay Stock Exchange.

Related Topics