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Alicon castalloy - decent results. For full year, sales up 17%, earnings up 37%, mcap 800 cr, pe 15. RoE 17% and RoCE 19%.
Company offers end to end solutions across spectrum of aluminium casting needs for various industries. Operates one of the largest aluminium foundries in India.
5 year revenue cagr 17%, ebitda cagr 21%, PAT cagr 23%. Caters to key sectors of the economy - automotive, infra, aerospace, medical, energy, agriculture.
Exports to 18 countries. 4 manufacturing locations. 2 in India and 2 intl (Austria and Slovakia). Diversified customer base across auto and other industries. Not reliant on a single anchor customer. No customer contributes > 15% of sales.
Diversified revenue mix. Non auto 11%. Exports 20%. In Q4, exports were 24%.
Company is confident of meeting the long term strategic plan of Rs 2000 cr consol sales by FY22. FY19 sales at 1182 cr. Company needs to do 19% cagr for next 3 years to meet the target.
Margin expansion should add to the net earnings growth which should exceed topline growth. Enhanced proportion of innovation based products in the mix helped report improved margins.
Alicon seeks to be amongst the top 5 global foundries by FY22. Even though FY19 sales were below expectations (hit by overall slowdown in auto sector), the company is confident of growing faster than industry players. EV should be a growth driver going forward.
With a 14-15% revenue growth and margin expansion, the company can compound earnings by 20% for next 3 years. In the end, it all comes down to execution. If that happens as per plan, this stock is a decent compounder with low/medium risk. Can be accumulated on declines.
