Universal Autofoundry Ltd Management Discussions

1. Economic Outlook

The global iron casting market size was estimated at USD 117,435.1 million in 2024 and is projected to reach USD 172,662.0 million by 2030, growing at a CAGR of 6.8% from 2025 to 2030. The market growth is anticipated to be driven by the rising investments in the railway industry worldwide and the demand for iron cast pipes from water-related infrastructure projects and oil & gas.

KeyMarketTrends & Insights:

?€? In terms of region, Asia Pacific was the largest revenue generating market in 2024.

?€? The North America iron casting market is set to experience steady growth, driven by robust economic indicators and substantial investments in infrastructure.

?€? In terms of product segment, Gray cast iron held a revenue share of over 64.0% in 2024.

?€? Ductile cast iron is the most lucrative type segment registering the fastest growth during the forecast period.

Market Size & Forecast:

?€? 2024 Market Size: USD 117,435.1 Million

?€? 2030 Projected Market Size: USD 172,662.0 Million

?€? CAGR(2025-2030): 6.8%

?€? Asia Pacific: Largest market in 2024

Source: www.grandviewresearch.com

Link: https://www.grandviewresearch.com/industry-analysis/iron-casting-market-report

2. Industry Structure and Development

Foundries are pivotal to the casting industry, functioning as facilities where metals are melted, molded, and solidified to produce metal castings.

Indian foundry and casting sector is going through rapid technology transformation with automation, simulation tools, and sophisticated robotics being applied. Computer-aided design (CAD) and computer-aided manufacturing (CAM) systems make processes more efficient by reducing defects and increasing accuracy in casting. Furthermore, application of 3D printing technology to form patterns and mold production helps reduce product development time. Adoption of advanced melting and molding technology enhances efficiency as well as saves material wastage. These technologies result in enhanced quality, faster production, and enhanced competitiveness in both local and international markets. With the momentum for intelligent manufacturing with Industry 4.0 on the go, Indian foundries are embracing data analytics and predictive maintenance tools, making processes even more streamlined and reducing downtime.

Indias foundry industry is the worlds second largest, producing an estimated 12 million tonnes of castings annually. This sector is experiencing consistent growth, driven by rising demand from various industries like automotive, engineering, and infrastructure. The industry is comprised of approximately 4,500 foundries, employing over half a million people directly and indirectly,

World Casting Production (Million tonner per annum)

Source: Production-Census 2021-22, Modern Casting, USA

The India iron casting market size reached USD 4.5 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 6.5 Billion by 2033, exhibiting a growth rate (CAGR) of 4.3% during 2025-2033. The rising automotive and infrastructure development, growing industrial machinery demand, and expanding export opportunities. Technological advancements in casting processes, coupled with cost-effective production capabilities and supportive government policies, further boost market growth. Increasing global sourcing from India also strengthens the industrys momentum.

If we refer sector wise consumers of casting then, the automobile sector is the largest consumer of casting products in India, accounting for nearly one-third of total consumption.

3. Opportunities andThreats

Indias casting industry is set to grow due to the expanding automobile sector, supported by the PLI scheme and significant investments. By FY28, the auto industrywill invest USD 7 billion to localize components, reducing imports.

The Medium and Heavy Commercial Vehicle (M&HCV) industry is poised for growth, with CRISIL forecasting a 2-4% CAGR from FY24 to FY29, driven by industrial activity, agricultural output, and infrastructure development. Tractor production in India is expected to grow at a 4% CAGR, reaching approximately 1,326,000 units by FY29. This growth is driven by the agricultural sectors significance, government initiatives, technological advancements, and evolving farming practices. Challenges like dependence on monsoon and rural infrastructure investment remain which needs to be addressed for sustained tractor demand, supporting Indias agricultural economy.

However, casting industry may face the following threats:

?€? Fluctuating RawMaterial Prices:

The iron casting industry is susceptible to price volatility in raw materials like iron ore, impacting production costs and profitability

Intense Competition:

Competition from alternative materials like plastics and aluminum, as well as from other foundries, can put pressure on pricing and market share.

?€? Supply Chain Disruptions:

Disruptions in the supply chain, due to factors like natural disasters, geopolitical instability, or pandemics, can impact production schedules and deliverytimes.

?€? Energy Intensive Production:

The iron casting process can be energy-intensive, leading to higher operational costs and potentially impacting sustainability goals.

?€? Economic Downturns:

Economic recessions or slowdowns can reduce demand for iron castings across various industries, impacting market growth

?€? Shifting Consumer Preferences:

Changes in consumer preferences, such as a move towards electric vehicles or sustainable products, can impact demand for specific types of castings.

Addressing these issues is crucial for maintaining competitiveness and ensuring sustainable growth in a dynamic and challenging market environment.

4. CompanyOverview

The company is a globally recognized manufacturer and exporter specializing in Grey Iron, Ductile Iron, and SG Iron Casting. Our extensive product portfolio serves diverse industries including automotive, agriculture, railways, earthmoving, and international markets. The comprehensive range of components, such as Suspension Brackets, Differential Housings, Hubs, Brake Drums, Flywheels, Adjuster Nuts, Pulleys, and Dampers, play pivotal roles in commercial vehicles and engineering applications. The company has three integrated manufacturing facilities with a combined built-up manufacturing area of around 30000 sq. meters.

The company supplies intricate, cored, and fully machined cast components weighing from 5 to 150 Kgs, with a casting capacity of42000 metric tons peryear.

The companymaintains long-standing partnershipswith a diverse array of esteemed clients in prominent sectors.

5. Segment-wise and Product-wise Performance

During the financial year 2024-25, total sales for the Company registered a decline from Rs. 20321.02 Lakh in 2023-24 to Rs. 19388.90 Lakh in 2024-25. Profitabilitywas also impacted during the given period. Profit after Tax (PAT) for the period declined from Rs. 489.25 Lakh in 2023-24 to Rs. 235.37 Lakh in 2024-25.

More than two-thirds of the Companys revenues come from the domestic commercial vehicle and tractor industry.

Leveraging the wide product range and customization capabilities, the company has strategically diversified its presence across different industries to mitigate concentration risks. The company currently serves a wide variety of end-user industries. These include tractors, Commercial Vehicles, Heavy Earth Moving, Construction, Industrial Machinery etc. This strategic shift is aimed at ensuring sustainable growth and reducing dependence on any single industry

6. Financial Performance

Rs. in Lakh

Particulars	2024-25	2023-24
Total income	19388.90	20321.02
Earnings before interest, tax and depreciation	1698.67	1585.32
Depreciation	1040.47	633.01
Finance Cost	330.69	261.70
Profit before tax	327.51	690.61
Tax	92.14	201.37
Profit after tax	235.37	489.24
Other comprehensive income	10.71	(1.18)
Total other comprehensive income (including PAT)	246.08	488.06

7. Ratios

Particulars	31st March 2025	31st March 2024
Current Ratio	1.37	1.58
Debt- Equity Ratio	0.61	0.51
Debt Service Coverage Ratio	2.48	2.37
Return on Equity (ROE)	0.03	0.07
Inventory Turnover Ratio	8.66	9.44
Trade Receivables Turnover Ratio	4.97	4.76
Trade Payables Turnover Ratio	12.47	10.12
Net Capital Turnover ratio	10.56	9.65
Net Profit Ratio	0.01	0.02
Return on Capital Employed	0.05	0.09
Return on Investment	NA	NA

8. Internal Control Systems

The Company has adequate internal control system, commensurate with the size of its operations. Adequate records and documents are maintained as required by laws. The Company strives to put several checks and balances in place to ensure that confidentiality is maintained. The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations. TheAudit Committee gives valuable suggestions from time to time for improvement of the companys business processes, systems and internal controls.All efforts are being made to make the internal control systems more effective.

9. LookingAhead & Conclusion

With an installed casting capacity of 42,000 MT/Year, the company has recently added a third High-Pressure Molding Line, RHINO, further enhancing its production capabilities. In addition to this the Company has started commercial production of its 3.60 MW AC (5 MWp DC) Captive Solar PV Power Generation Plant located at Bikaner. By commissioning this facility, we not only expand our production capacity but also aim towards greener tomorrow.

The company has ambitious plans to significantly enhance its machining capacity by the end of FY26, reflecting its growth strategy and dedication to meeting the evolving needs of its customers. The company is well-positioned to improve its capacity utilization, leveraging its state-of-the-art facilities and experienced workforce and thereby improving profitabilitythrough operating leverage.