Electrosteel Castings Limited sees strong growth in H1FY25, despite Q2 slowdown

Electrosteel Castings Limited (ECL), a key player in Ductile Iron Pipes (DI Pipes) and Fittings, has reported significant financial growth in the first half of FY25, despite facing a decline in its Q2 performance. The company, renowned for its vast operations and exports spanning over 110 countries, noted a 6.5% year-on-year increase in its total consolidated income for H1FY25, reaching INR 3,885 crores. Notably, consolidated EBITDA surged by 31.8% to INR 666 crores, showcasing an expanded EBITDA margin of 17.2%, up 329 basis points compared to the previous year.

Q2 Performance Overview

ECL’s Q2FY25 revenue was impacted, recording a total income of INR 1,849 crores—a 4.6% decline year-over-year. This drop was attributed to a planned shutdown at the MBF at the Srikalahasthi unit, affecting production and sales. EBITDA for the quarter stood at INR 289 crores, with a margin decrease to 15.6%, while profit after tax (PAT) dropped 11.1% year-over-year to INR 155 crores. Despite these challenges, the company maintained a PAT margin of 8.4%.

Steady Growth in H1FY25

The first six months of FY25 highlighted the company’s resilience, with total income growing to INR 3,885 crores, up from INR 3,650 crores in H1FY24. This growth was propelled by enhanced operational efficiencies and strategic market positioning. The EBITDA margin for this period increased to 17.2%, marking a significant improvement from 13.9% in H1FY24. Profit after tax saw a notable rise of 52.8% year-over-year, reaching INR 381 crores, with the PAT margin expanding by 297 basis points to 9.8%.

Standalone Performance Insights

ECL’s standalone figures further reflected its robust performance, despite Q2 pressures. Standalone total income for H1FY25 rose 4.3% to INR 3,564 crores, supported by an EBITDA increase of 21.0% year-over-year to INR 623 crores. PAT surged by 37.2% to INR 364 crores, demonstrating the company’s capability to navigate operational challenges effectively.

Export and Production Highlights

The company reported that DI Pipes sales volumes in Q2FY25 amounted to 1.76 lakh metric tonnes (MT), while the half-year figure reached 3.68 lakh MT, showcasing stability against 3.56 lakh MT in H1FY24. Exports made up 14% and 13% of DI Pipe volumes in Q2FY25 and H1FY25, respectively, indicating a strong international demand for ECL’s products.

Expert Insights on Strategic Growth

Industry experts pointed to ECL’s strategic focus on diversification and technological advancements as critical drivers behind its sustained growth. The company’s investments in integrated facilities across India, particularly in West Bengal, Tamil Nadu, and Andhra Pradesh, have solidified its position as a leader in high-quality DI Pipes production. Analysts emphasized that despite temporary setbacks, such as the planned maintenance shutdown in Q2, ECL’s long-term growth trajectory remains positive due to its export capabilities and strong domestic market hold.

Outlook and Competitive Position

As ECL navigates the latter half of FY25, maintaining momentum in sales and operational efficiency will be crucial. The company’s ability to adapt, expand market reach, and enhance production capacities positions it well against competitors in both domestic and global markets.