Alicon Castalloy Has Gained 109% in 2021; Sharekhan Says More to Come

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Alicon Castalloy Has Gained 109% in 2021; Sharekhan Says More to Come

By Aditya Raghunath -- Alicon Castalloy Ltd (NS: ALIO ), a leading integrated manufacturers of aluminum castings in India, has seen its share price move up almost 109% in 2021 so far.

The company reported its numbers for Q1 FY22. Total income came in at Rs 211.68 crore compared to Rs 53.66 crore in Q1 FY21. It reported a net loss of Rs 4.2 crore compared to a net loss of Rs 43.99 crore in Q1 FY21.

Rajeev Sikand, Group CEO, Alicon Castalloy said, “We have reported a resilient performance in the quarter despite challenges in the operating environment in India caused by the severe second wave. During this period, we witnessed subdued offtake by OEMs and other customers, which impacted our volumes, particularly in the months of April and May. However, as restrictions eased, there was a hint of a revival in June which has gained further traction in July. On the exports front, we reported a strong sustained growth led by continued demand in key geographies.

Sharekhan is bullish on the stock and has a target of Rs 1,056 with a buy call. It said, “Q1 FY2022 results were below expectations, marred by lower sales and higher-than-expected contraction in EBITDA margin. However, the company continues to grow its order book strongly. We have increased our earnings estimates by 29.2% and 28% for FY2022E and FY2023E, respectively, to build in the company's multi-year order wins and increased share of high-margin machined components.”

Alicon Castalloy was also one of the top small-cap stocks bought by mutual funds in July.

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