Alicon Castalloy Limited is one of India’s largest integrated manufacturers of aluminum castings, operating as a full-service provider from design and prototyping to full-scale commercial manufacturing, machining, and assembly. Utilizing a **"Smart Foundry"** model that integrates **AI, IoT, and robotics**, the company serves a diversified global customer base across **16 segments**. With a strategic pivot toward high-value electrification and structural components, Alicon is transitioning from a traditional two-wheeler supplier to a technology-agnostic solutions partner for global Passenger Vehicle (PV) and Commercial Vehicle (CV) OEMs. --- ### **Strategic Transformation: From "As-Cast" to High-Value Solutions** Alicon is executing a multi-year transformation to enhance margins and diversify its revenue streams. This is driven by five strategic pillars: * **Scaling Strategic ICE Products:** Expanding the portfolio of critical parts, such as **cylinder heads**, for the traditional Internal Combustion Engine (ICE) segment. * **Carbon-Neutral Technology:** Targeting high-growth opportunities in **EV, Hybrid, Fuel Cell, and Hydrogen Cell** technologies. * **Structural & Technology-Agnostic Parts:** Developing components (chassis, suspension, braking) that remain essential regardless of the vehicle's powertrain. * **Non-Auto Diversification:** Leveraging casting competencies to enter **Defense, Aerospace, Railways (DAR)**, Energy, and Healthcare. * **Enhanced Wallet Share:** Moving from "as-cast" parts to **fully machined and assembled solutions**. The machining mix stood at **61%** in FY24, with a goal to increase this further to capture higher value addition. --- ### **Revenue Mix and Market Segmentation** The company has successfully reduced its historical over-dependence on the two-wheeler (2W) segment, shifting focus toward the higher-margin Passenger Vehicle (PV) sector. | Segment | Q2 FY26 Mix | FY24-25 Mix | FY23-24 Mix | | :--- | :---: | :---: | :---: | | **Two-Wheelers (2W)** | **44%** | **34%** | **40%** | | **Passenger Vehicles (PV)** | **41%** | **39%** | **33%** | | **Commercial Vehicles (CV)** | **10%** | **21%** | **19%** | | **Non-Auto** | **5%** | **6%** | **8%** | *Note: Recent CV contribution was impacted by North American demand volatility and global rare earth magnet shortages.* --- ### **Product Portfolio and Technological Leadership** Alicon operates at the forefront of aluminum casting technology, utilizing **Gravity Die Casting (GDC)**, **Low-Pressure Die Casting (LPDC)**, and **High-Pressure Die Casting (HPDC)**. * **Cylinder Head Leadership:** Cylinder heads constitute **56%** of total production. Alicon has manufactured **122 different types** over four decades. * **E-Mobility Expansion:** The company supplies nearly **90 components** to the EV industry, including e-Axles, motor housings, battery trays, and cooling boxes. The EV/Hybrid segment contributed **19% of revenue** in Q1 FY26 (up from **12%** in FY24). * **Friction Stir Welding (FSW):** A first-mover in India, Alicon uses this patented solid-state joining process for complex EV battery housings, recently securing a **₹90 crore order** from a European customer. * **Thermal Engineering:** Specialized in advanced cooling solutions; notably developed a high-complexity **e-Axle** for **Jaguar Land Rover (JLR)** that reduced component weight by **7 kg**. * **Prototyping:** Implementation of **3D printing for sand moulds** has significantly reduced lead times from design to prototype. --- ### **Global Manufacturing Footprint and Capacity** Alicon operates **4 modern manufacturing plants** strategically located "close-to-demand" to optimize logistics and time-to-market. * **India:** Facilities in **Shikrapur (Pune)**, **Chinchwad (Pune)**, and **Binola (Haryana)**. * **Europe:** A manufacturing plant and tool room in **Slovakia** (Illichmann), supported by an International Marketing Office in **Austria**. * **Capacity Utilization:** Total capacity exceeds **50,000 tonnes**, with current utilization levels stabilized around **73-75%**. The company is evaluating a new location at its **Khed City** land bank as existing plants approach full capacity. * **Vertical Integration:** Capabilities include tool design, simulation, casting, machining (**70% in-house**), sub-assembly, and surface treatment. --- ### **Financial Performance and Growth Targets** Alicon maintains a robust executable order book of approximately **₹9,100 - ₹9,500 crore** through **FY29**. | Particulars (₹ Crore) | FY 2022-23 | FY 2023-24 | FY 2024-25 (Est) | FY 2028-29 (Target) | | :--- | :---: | :---: | :---: | :---: | | **Total Revenue** | **1,405** | **1,563** | **1,724** | **~3,500** | | **EBITDA Margin** | **11.2%** | **12.7%** | **~12-13%** | **14.0%** | | **PAT** | **51** | **61** | **46** | **-** | | **ROCE** | **12.7%** | **14.5%** | **-** | **-** | * **Capex:** Incurred **₹141 crore** in FY25; projected **₹125 - ₹130 crore** for FY26, with **₹25-30 crore** dedicated specifically to **robotics and automation**. * **Dividend Policy:** Strong track record with a **150% dividend (₹7.50/share)** in FY24. * **Working Capital:** Targeted net cycle of **7 to 10 days**. --- ### **Key Customer Relationships** The company maintains a diversified client base where no single customer exceeds **15% of turnover**. * **Maruti Suzuki:** Supplies cylinder heads; volumes tripled Y-o-Y in late 2024. * **Toyota:** **100% share of business** for cylinder heads used in their Indian hybrid portfolio; recipient of the **Zero PPM Quality award**. * **Stellantis:** Single-source supplier for cylinder heads at their Hosur engine hub. * **Global Premium OEMs:** Active programs with **JLR (eAxle)**, **Daimler (structural parts)**, **Ferrari**, and **Volkswagen (ADAS components)**. --- ### **Sustainability and Governance** * **Green Energy:** Over **50-55%** of total power consumption is sourced from **solar and wind** energy via captive plants. * **Certifications:** Holds a "committed" certification from **EcoVadis**, ranking in the **top 35%** of companies globally. * **Leadership:** Transitioning to new leadership with **Mr. Sumit Bhatnagar** (CEO-Designate) set to take over in **March 2026**. * **Digital Security:** Implementing **ISO 27001** and **ISO 27002** for cybersecurity and PIMS for data privacy (DPDP Act/GDPR). --- ### **Risk Factors and Mitigation** Alicon operates in a complex global environment with several key sensitivities: * **Geopolitical & Tariff Risks:** Faces a **50% effective tariff** on certain exports to the U.S. (25% base + 25% penalty related to trade involving Russia). This has led to a **19% de-growth** in U.K. exports and **2%** in North America as of Q3 FY26. * **Supply Chain Disruptions:** China’s restrictions on **rare earth magnets** and **semiconductors** continue to impact global OEM production schedules. * **Operational Leverage:** Upfront investments in automation have increased fixed costs. Margin expansion is heavily dependent on the ramp-up of major projects, such as the **JLR eAxle**, expected to reach full utilization by **mid-2026**. * **Regulatory Changes:** Recent Indian **Labour Code** transitions resulted in a one-time exceptional charge of **₹5.00 crore** due to revised wage definitions. * **Raw Material Volatility:** While **60% of aluminum price hikes** are passed through to customers, timing lags can impact quarterly gross margins.