Alicon Castalloy Experiences Revision in Its Score Following Strong Q2 FY24-25 Performance

Alicon Castalloy, a small-cap player in the auto ancillary sector, has recently experienced an adjustment in its evaluation by MarketsMOJO. The company has reported positive financial performance for the second quarter of FY24-25, marking a notable achievement with four consecutive quarters of positive results. Key financial metrics indicate a robust operating cash flow of Rs 157.36 crore and a significant growth in profit after tax, which has risen to Rs 35.85 crore, reflecting a growth rate of 49.38%.
The return on capital employed (ROCE) stands at an impressive 14.85%, showcasing the company's attractive valuation with a favorable enterprise value to capital employed ratio. Despite these positive indicators, Alicon Castalloy faces challenges, including a high debt-to-EBITDA ratio of 2.84 times, which raises concerns about its ability to service debt. Additionally, the company's long-term growth appears limited, with net sales and operating profit growing at annual rates of 9.12% and 7.55%, respectively, over the past five years.

In a notable development, the stock has been added to MarketsMOJO's list, reflecting a shift in its market position. However, the technical outlook remains mildly bearish, with several indicators suggesting caution. Promoter confidence has also waned, as evidenced by a slight decrease in their stake in the company.