Company Overview
Foseco India Limited is Indias leading supplier of foundry consumables and solutions. Established in 1958, the Company serves ferrous and non-ferrous foundries across diverse end markets, ranging from large custom castings to high-volume automotive components. "FOSECO" originates from "FOundry SErvices COmpany," a concept that took root in Birmingham, England, in 1932. Over the decades, FOSECO has become indispensable within the global foundry industry, renowned for delivering top-quality consumable products across various sectors.
In FY 2024, Foseco India continued to leverage its strengths in technology, local manufacturing, and global expertise to address the evolving needs of the Indian foundry sector
Foseco Indias market position
As the market leader in most of its focused product lines, the Company has a strong market presence that underscores Foseco Indias significant role in the countrys foundry sector.
while maintaining its commitment to delivering value-added solutions to its customers.
Core Product Offerings
Foseco India provides a comprehensive range of foundry consumables and equipment for iron, steel, and non-ferrous foundries, including:
Value Proposition
Foseco Indias value proposition is built on enhancing casting quality and foundry efficiency. By adopting a solutions partnering approach, the Company aims to improve its customers business performance by applying world-class proprietary technology and expertise. Foseco Indias focus on technical service, backed by substantial R&D investment, allows it to optimise its clients casting process. By combining local manufacturing capabilities with global knowledge, the Company helps foundries reduce casting defects, minimise metal usage, and automate processes, ultimately enabling them to produce high-quality castings while maximising benefits and reducing costs.
Macroeconomic Environment
Global Economic Trends
In 2024, the global economic situation was shaped by several interconnected factors, including the geopolitical tensions, inflationary pressures, and elections in many parts of the world. Many advanced economies, particularly in North America and Europe, continued to grapple with high inflation rates, prompting central banks to maintain tighter monetary policies. A notable trend was the slowdown in global manufacturing, especially in Europe and parts of Asia, due to supply chain disruptions and weak external demand. Meanwhile, emerging markets faced challenges like debt burdens and fluctuating commodity prices, which hindered their growth. The war in Ukraine has had a lasting impact on global energy markets and supply chains, contributing to economic uncertainty. Additionally, global trade is evolving as nations focus more on diversification and resilience, with China and other developing economies playing a crucial role in driving growth in the Asia-Pacific region. Overall, the global economy in 2024 remained fragile, with economic growth varying across regions and sectors.
Indian Economic Landscape
In 2024, Indias economy demonstrated resilience amid global challenges, achieving a GDP growth rate of 6.4% in FY24-25, as projected by the Economic Survey of India. This growth solidified Indias position as the fastest-growing major economy, driven by robust domestic consumption, investment, and strong service exports. However, the manufacturing sector faced difficulties. The manufacturing sectors share in the economy declined from 15.4% to 14.3%. High inflation rates persisted, and there was a notable slowdown in consumption. Additionally, foreign investors withdrew significant funds, with $11.2 billion exiting in October and a further $2.5 billion in November, influenced by factors such as high stock valuations and reduced government spending in an election year. In response, the government implemented measures like tax reductions to stimulate middle-class spending, aiming for a projected growth of 6.3-6.8% for fiscal 2026. Despite these hurdles, Indias strategic policy initiatives and financial stability created an optimistic outlook for Indian economy for the coming years.
Outlook for 2025
Global growth is projected at 3.3 percent both in 2025 and 2026, as per the World Economic Outlook update by the IMF. In an era marked by escalating global trade tensions and persistent geopolitical uncertainties, the
Indian economy has demonstrated remarkable resilience and strong growth, supported by robust consumption and government spending. Inflation has moderated and policy measures have helped stabilize market liquidity. However, foreign portfolio outflows and currency depreciation including financial volatility, and trade disruptions remain key risks. Trade challenges persist due to weak global demand, but gradual narrowing of trade deficit offers some relief. Overall, Indias economy is well-positioned for growth, but sustained policy support and domestic resilience will be essential in maintaining economic momentum in the year ahead.
Impact on Foundry Industry
The foundry market produces metal castings for industries like automotive, construction, mining, power, oil and gas, and industrial machinery. The foundries use diverse processes such as sand casting, die casting, and investment casting to manufacture components from materials like grey iron, ductile iron, steel, and non-ferrous metals, including aluminium and brass.
Key trends in the Indian foundry market include developing more complex castings, adopting technologies and practices for better process controls, reducing overall costs, and sustainability. Non-ferrous and ferrous castings remain popular for their strength and versatility, with significant consumption in the automotive and general engineering industries. Tighter OEM specifications and environmental regulations is driving outsourcing of castings to technologically advanced foundries. Upgrading to better technologies comes at a high cost, limiting smaller foundries ability to compete. Environmental regulations and the push for sustainability drive the adoption of green foundry practices, automation, and advanced casting technologies like precision and customised solutions. However, rising investment requirements and low-profit margins could hinder market growth in the forecast period. 1
The Indian foundry industry has witnessed consistent growth, fuelled by rising demand in the automotive, engineering, energy, and infrastructure sectors. With an annual production of 12 million tons, India ranks second globally in casting output. However, a significant amount of the type of castings made in India are simpler and valued lower than the castings made in developed countries. The focus is now shifting to improving quality and complexity to meet global standards.
Technological advancements like automation, 3D printing, digitalisation, and sustainability initiatives in recycling and CO2 reduction are reshaping the industry. The IFEX 2024 exhibition and 72nd Indian Foundry Congress in Bangalore highlighted these advancements, reflecting optimism and a commitment to modernisation.
With a resilient domestic economy and strong export potential, Indian foundries are well-positioned for global success. By prioritising quality enhancement and sustainable practices, the industry could usher in a new era of growth.2
The Indian foundry industry is experiencing significant growth, driven by industrial expansion in the automotive, railways, and construction sectors that heavily rely on cast components. The Indian foundry market is highly fragmented, with over 4,5003 nationwide foundries. Technological advancements, including automation and CAD, enhance productivity and global competitiveness. Government initiatives such as "Make in India," the PLI scheme and infrastructure development programs support modernisation and clustering of foundries. With a 2.4% share of global casting exports, India has substantial growth potential, aided by a competitive cost structure and skilled workforce. The booming automotive sector and a USD 1.5 trillion National Infrastructure Pipeline further boost demand for castings, positioning India as a global leader.
Key Growth Drivers
Government Initiatives
National Infrastructure Pipeline
(NIP) with an outlay of USD 1.5 trillion.4
Make in India" and "Atmanirbhar
Bharat" initiatives boosting domestic manufacturing.
Increased focus on defence and aerospace production.
Demand Trends
Strong growth in the automotive sector.
Rising investments in renewable energy projects and railways.
Export opportunities are driven by the "China Plus One" strategy.
Technological Advancements
Adoption of Industry 4.0 technologies, including robotics and AI.
Transition to energy-efficient and environmentally sustainable practices.
Challenges
Fluctuations in raw material prices, particularly for metals such as iron, steel, and aluminium, significantly affect production costs and profitability in the foundry industry.
Volatility in global markets and geopolitical tensions may affect export-oriented foundries.
Fragmentation within the industry, with many small and medium-sized foundries lacking resources for modernisation.
Technological advancement and innovation are needed to meet evolving customer requirements and increasingly stringent quality standards. Investing in automation, digitalisation, and process optimisation will enhance efficiency and competitiveness.
Increasing regulatory pressures to reduce environmental impact.
Future Outlook
The Indian foundry industry is on the cusp of significant growth. Key focus areas for the future include:
Innovation in Materials: Development of lightweight, high-strength alloys for advanced applications.
Eco-Friendly Practices: Emphasis on circular economy principles, such as recycling and energy-efficient operations.
Strategic Partnerships: Collaborations between industry players, academia, and government to drive research and development.
Workforce Development: Skilling initiatives to address the gap in expertise for advanced manufacturing processes.
The foundry industry is poised for a dynamic future underpinned by robust demand, policy support, and
Process Improvements
ROTOCLENE
The groundbreaking ROTOCLENE technology is poised to revolutionise the steel casting processes. This innovative method employs advanced rotary stirring equipment to create a precise curtain of argon bubbles within molten steel, effectively capturing impurities and enhancing metal purification. It also helps with temperature homogenization enabling pouring temperature reduction. ROTOCLENE ensures superior-quality castings with reduced defects and significantly lower re-work costs and time, making them indispensable for high quality, safety critical relatively large steel castings like wheel hub for mining trucks, high strength low alloy steel critical components, and critical valves and pumps.
technological advancements. However, overcoming fragmentation and environmental compliance challenges will be critical to sustaining growth and competitiveness.
Innovation and R&D
The Companys legacy, built over six decades since its founding in 1958, is defined by its relentless focus on innovation and R&D. This commitment underpins the Companys operations, driving advancements that have transformed foundry processes. By leveraging cutting-edge technologies, including proprietary product formulations and computer simulations, Foseco India consistently reduces casting defects, optimises resource utilisation, and enhances product quality. Innovation is not an ancillary function but the lifeblood of the Company, enabling it to partner with foundries to improve critical processes like moulding and casting while championing sustainability and safety. Through continuous R&D and collaborative partnerships, Foseco shapes the future of the foundry industry.
New Product Development
INSTA Coatings
These water-based and solvent-based coatings for ferrous castings offers up to a 30% reduction in costs, eco-friendliness, and extended shelf life, saving valuable time and resources.
SEMCO FD Coatings
SEMCO FD fast drying coatings are specifically formulated to reduce oven drying times by up to 50% and thereby cut energy consumption, carbon emissions and drying costs.
SEMCO CC Coatings
SEMCO CC coatings change colour on drying, allowing the operator to clearly see when moulds and cores are ready to use. This avoids over-drying with associated energy savings of up to 20% achieved in customer trials.
STELEX Optiflow 3D
STELEX Optiflow 3D filters embody a groundbreaking design. They harness 3D printing capabilities to create filters with precise pore sizes, mixed pores, and versatile structures all within a single filter. This innovative approach enables tailored filtration solutions, optimising inclusion capture and metal flow control with unprecedented accuracy. These filters offer high-capacity solutions for large iron castings like wind mill, machinery, and engines and steel castings for nuclear, valves, and wheel axle applications.
Outlook and Strategy
We are optimistic about India growth story in the coming years. While the India economy and the foundry industry will continue to grow, our objective remains to grow faster than the market. We plan to drive growth by focusing on key accounts, indirect channel, and innovation.
The plan is to continue working closely with the OEMs and Key Accounts to develop new and more complex castings, improve processes, reduce overall costs, and help achieve sustainability goals. We see increasing aspirations of Indian foundries to compete globally and develop export markets. We plan to be a partner in their journey by bringing in our local and global experience, process and application expertise, and innovative products.
The Company will continue to expand its coverage mostly through strengthening of the distribution network in under-penetrated geographies. We will continue to build our indirect channel capabilities so that they reflect our direct channel capabilities. Our business model, through either direct or indirect channel, will remain around solutions partnering and value selling. Therefore, our view of our Distributors is that of a partner who shares our values and passion for serving the foundry industry and works collaboratively with us to help the foundries achieve their goals.
We will continue to innovate locally and globally, thereby enabling foundries to make better castings. We plan to increase our R&D efforts to innovate locally and provide customized solutions to our customers. We will also introduce our global innovations in India at a faster pace, so that applicable foundries can benefit from it. We will step up the connect between the global teams and the local teams so that we feed ideas and projects into the global
R&D pipeline keeping the local market in mind.
Foseco Indias Performance Highlights
In 2024, our company has maintained its growth trajectory, demonstrating strong performance through enhanced revenue generation, improved profitability metrics, and effective management of trade working capital. Despite continuing challenges in the raw material landscape and occasional price volatility, Foseco India successfully strengthened its market position by providing innovative solutions to help customers overcome these challenges. Our value-driven approach enabled us to effectively manage cost pressures while maintaining competitive pricing. Additionally, our strategic focus on working capital management has yielded positive results, particularly in optimizing trade receivables cycles.
Foseco India continues to lead the industry in technological advancement, with significant developments in both ferrous and non-ferrous foundry solutions. Our commitment to sustainable development remains paramount, with our R&D efforts focused on creating environmentally conscious products. In response to evolving environmental regulations and increasingly demanding OEM specifications, we have proactively developed compliant solutions for our customers. Our comprehensive product and service portfolio not only drives operational efficiencies and cost optimization but also enables our customers to achieve their growth objectives. We have further strengthened our distribution network, expanding our reach to serve a broader spectrum of foundries. Our strategic initiative to cater to smaller foundries has been particularly successful, with specialized products and solutions designed to meet their specific needs.
To support our expanding customer base, we have implemented strategic organizational enhancements, including talent acquisition, process optimization, and capability building. We continue to invest in personnel development, operational excellence, and global knowledge sharing. These investments position us strongly to capitalize on emerging opportunities and drive sustained growth.
Our strategic priorities continue to focus on deepening market penetration and strengthening our competitive position in the foundry sector, while maintaining a sharp focus on profitability and working capital efficiency.
We remain committed to elevating our safety standards and maintaining superior product quality, reflecting our unwavering dedication to employee welfare and customer satisfaction. Our investments in sustainability initiatives and technological advancement position us well to meet evolving market demands while contributing to a more sustainable future for the industry.
As we enter into 2025, we are focused on implementing innovative strategies to drive sustainable growth while reinforcing our leadership position across all segments and regions within the foundry industry. Our strategic initiatives for 2025 will emphasize volume growth, sustainable manufacturing practices, and enhanced technical service capabilities to meet evolving market demands.
We remain committed to elevating our safety standards and maintaining superior product quality, reflecting our unwavering dedication to employee welfare and customer satisfaction. Our investments in sustainability initiatives and technological advancement position us well to meet evolving market demands while contributing to a more sustainable future for the industry. The Company anticipates significant opportunities in 2025 through the expansion of our product portfolio, strengthening our technical service infrastructure for the utmost satisfaction of our customers.
Financial Performance
Table 1: Abridged Profit and Loss Account (Rs. in lakh)
Particulars | 2024 | 2023 |
Total Revenue from Operations | 52,478 | 47,741 |
Other Income | 1,823 | 2,148 |
Total Expenses | (44,468) | (41,562) |
Profit Before Exceptional Item and Tax | 9,833 | 8,327 |
Exceptional Item (Income) | Nil | 1,188 |
Profit Before Tax (PBT) | 9,833 | 9,515 |
Total Tax Expense | (2,530) | (2,217) |
Profit After Tax (PAT) | 7,303 | 7,298 |
Table 2: Key Financial Ratios
Particulars | 2024 | 2023 | Reason for increase/decrease of 25% or more |
PBIT/ Revenue from operation | 18.7% | 19.9% | Note: In this table, the change in the key financial ratios of the two years, do not exceed the limit of 25% as stipulated in the SEBI |
PAT/ Revenue from operation | 13.9% | 15.3% | |
Return On Capital Employed | 28.5% | 29.0% | |
Return On Net Worth | 21.3% | 21.3% | Listing Regulations, hence does not call for comments on the differences. |
Debt Equity Ratio | -- | -- | |
Current Ratio | 3.12 | 2.84 | |
Interest Coverage Ratio | -- | -- | |
Debtors Turnover | 4.71 | 5.11 | |
Inventory Turnover | 8.23 | 9.79 | |
Operating Profit Margin | 18.7% | 17.4% | |
Net Profit Margin | 13.9% | 15.3% |
Your Company achieved strong revenue growth of 9.9% over the previous year, driven by robust demand, strategic pricing, volume growth, and market expansion. Prudent working capital management and cost control measures played a crucial role in achieving these results, ensuring a healthy liquidity position with optimized receivables, streamlined inventory, and payables efficiency, leading to operational cash flows of Rs. 4,224.87 lakh. The profit margin before tax improved to 18.7% against 17.4% of the earlier year, after eliminating one-off profit earned in the year 2023 on sale of lease hold land situated at Akurdi, Chinchwad, Pune. With a strong balance sheet, well-managed working capital, and a continued focus on cost efficiency and volume-driven growth, the Company remains well-positioned for sustained profitable growth, leveraging innovation and market opportunities to drive long-term value creation.
Disclosure of Accounting Treatment Adoption of Indian Accounting Standards (Ind-AS)
The Company has followed the Indian Accounting Standards (Ind-AS) for drawing-up its accounts as prescribed by the Institute of Chartered Accountants of India, in the preparation of financial statements. There are no audit qualifications in the Companys financial statements for the year under review.
Health, Safety, Environment & Sustainability
The Company strives to achieve the highest standards of HSE practices, having adopted an Integrated (Quality, Health, Safety and Environment) Management System (IMS) accredited to ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018. The Company has well established HSE standards and monitoring process for each of its operations. Every employee is required to conduct safety audits and suggest safety improvement opportunities. These improvement opportunities are reviewed by HSE team members and wherever feasible these are implemented in the safety culture journey. It also runs continuous improvement programs for employees health and environment. To increase HSE awareness amongst employees, the Company regularly conducts internal competition and participates in competitions organised by trade bodies. The Company has launched sustainability drive with the defined targets to reduce its environmental footprint in terms of CO2, Energy, Waste and Water. The
Company has invested in own generation of green energy source by solar power project in Pune with the capacity of 565 kWP. The Company has implemented specific measures to reduce its CO2 emissions & neutralised its Scope-2 emissions with green energy contracts.
Quality
The Company is acknowledged in the market for its consistent product quality and technical expertise. The consistent quality products adds value in the customer processes. The Company is committed to support customers with reliable products, which it strives to deliver through best-in-class quality management in its production sites. Its quality systems define the commitments and responsibilities which apply to all aspects of the business. To demonstrate this, the Company has an established process to address Customer complaints which ensures participation from cross functional expertise and thus committed to ensure customer satisfaction. The problem solving methodology 8D PPS (Practical Problem Solving) enhances the problem solving capability of team members which is recognized in the form of Regional contest and Awards.
Operations
Foseco India has state of the art manufacturing facilities in Pune and Puducherry. It serves Indian markets and also support other countries through inter-company sales.
It also imports products from its group manufacturing locations in other parts of the world. Foseco India operates in a cellular manufacturing structure that has end-to-end responsibility of the entire supply chain process from purchase to manufacturing process, quality to despatch.
This workflow ensures that the team is responsible for safety, quality, production, cost and product delivery. The Company is progressively using operational excellence tools to standardise its processes and activities and ensure efficient systems to delight customers. With the Lean philosophy, focusing on people participation and engagement through initiatives like Kaizen Factory, the Company is becoming more flexible to take new challenges in customer satisfaction. This creates a healthy competition with rewards & recognition, enhancing the culture of continuous improvement. These initiatives are very well backed by innovative engineering practices and solutions. Foseco India has constantly carried out improvement initiatives to maintain and upgrade its manufacturing facilities through revenue expense and capex.
Human Resources
Foseco Indias strength lies in its blend of exceptional talent and cutting-edge technology, which together create significant value for our customers. Our dedication to being "partners in performance" has positioned us as both a preferred employer and a supplier of choice. This success is driven by our commitment to our CORE Values and people practices. The Human Resources function has consistently acted as a catalyst, helping to build and reinforce this foundation through people strategy with our organizational goals.
During the year, we have successfully attracted and onboarded competent talent for critical and strategic roles, including key support functions and field sales for further strengthening our business performance and reinforce our market leadership. In addition, we have maintained a strong focus on building our talent pipeline by continuing to recruit young Graduates from reputed engineering colleges. The Graduate Engineering program, which was initiated in 2021, has now evolved into a comprehensive initiative, successfully transitioning graduates through structured training and deployment in key roles within the organization.
Additionally, we have prioritized career development opportunities for our homegrown talent, enabling them to step into elevated roles within the organization. Our initiatives, including internal job postings and employee referral programs, have not only strengthened our brand internally and externally but have also contributed to successfully filling 25% of our open positions through internal promotions and referrals.
Our people development initiatives, including advanced technical program for Sales Marketing and Technology team, Quality Management, and workshop to the align senior leaders with the 2025 business priorities, and prepare for future challenges and drive profitable growth ambition of the company. These programs have been instrumental in enhancing leadership capabilities and fostering a forward-thinking mindset across the organization.
HR has placed a strong emphasis on initiatives designed to boost employee engagement, resulting in measurable improvements in absenteeism, safety, product quality, productivity and industrial relations. By prioritizing consistent communication, HR practices, employee wellbeing, and responding to annual feedback with actions, HR has fostered a culture of support and responsiveness.
This dedication to engagement has resulted into our re-certification as a "Great Place to Work". We also have achieved very strong Employee Engagement score, survey conducted by Mercer Sirota, we have again set benchmark within Foundry Business of Vesuvius Group.
By nurturing a culture of continuous improvement and high performance, we are not only strengthening our current foundation but also ensuring long-term organizational success and resilience as we move into 2025 and beyond.
Corporate Social Responsibility Initiatives
During the year, the Company continued its CSR initiatives in the areas of education, healthcare, social causes and environment with greater zeal. The Companys CSR activities are primarily focussed on the disadvantaged, vulnerable and marginalised segments of society.
The Company has partnered with renowned NonGovernmental Organisation (NGOs) to fulfil its CSR objectives. CSR projects are undertaken with the aim of uplifting the social lives of the people living in the rural areas, providing education to the deprived and skill building.
The continued association with Jehangir Hospital for detecting juvenile diabetes in young boys and girls and supporting their families by distributing medicine and diabetics kits for the treatment of diabetes has started bearing fruits with the results that the children are having access to better treatment and medicine from the hospital. The Company is sensitive towards environment and social requirements. It had supplied biomass cookstoves under the banner of "Happy Family Kit" to the deserving and needy families in the slum, rural, and semi-urban communities. This project is gaining in popularity as it has helped women in rural areas to cook food without burning excess fuel thereby take care of the environment. The Company is actively working on its novel project of providing modern amenities and infrastructure to a village near the Companys plant, which is deprived of basic necessities. The village has a school which is in need of a library and other infrastructure, which is being built by the Company.
In the area of education, the Company is building infrastructure in a residential school near the Companys plant. The school provides free education and boarding at its premises to children of migrant workers and labourers residing nearby. In the previous year, the Company provided bunk-beds to the school with the aim of providing recreation to the residential students. The Company is glad to inform that these initiatives is drawing more children living in the vicinity of the school to take admission in the school and avail these facilities.
During the year, some ambitious projects were completed, at the same time we undertook new projects in partnership with Rotary Foundation, for performing cardiac surgeries, cataract surgeries, anaemia detection etc., for the poor and the needy. The Company will keep working on social projects that fall within the scope of its CSR Policy, which will provide significant assistance to society in the long run.
Information Technology
The Companys IT systems are very robust and are running seamlessly to lend support to people working from anywhere. The IT processes of the Company are accredited to ISO 9001:2015.
Internal Control Systems and Their Adequacy
The Company adopts a rigorous system of Internal Control and Risk Management to ensure all assets are safeguarded and protected against loss from unauthorised use or disposition and that transactions are authorised, recorded, and reported quickly. In addition, the Company has a well-structured system of risk assessment and risk reporting.
The Companys internal controls are supplemented by an extensive programme of internal audits, review by management and documented policies, guidelines and procedures. The internal controls are designed to ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets. During the year, due care has been exercised by the Company with respect to all the requirements of the Company Law and Listing Regulations.
Cautionary Statement
Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results might differ materially from those expressed or implied. Important developments that could affect the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in government regulations, tax laws, and other factors such as litigation and industrial relations.
For and on behalf of the Board of Directors | |
Ravi Moti Kirpalani | |
Place: Gurugram | Chairperson |
Date: February 28, 2025 | DIN: 02613688 |
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