Prospect for Indian automotive aluminium die-casters to recover from 2016-17

Auto-casting manufacturers in India have ended 2015-16 fiscal on a weak note. Monsoon was below average which slowed down demand from rural areas inhibiting offtake by domestic two-wheeler and tractor manufacturers. The cascade effect was reflected in decline in sales in these two segments as well as that for the OEMs including ferrous and aluminium auto casting manufacturers.

The realisation was also brought down by the falling iron and aluminium prices in the global market, limiting revenue growth.

However, outlook for 2016-17 seems brighter for both ferrous and aluminium auto casting manufacturers. Met offices had forecasted a normal monsoon for the fiscal. Going by the trend as of now, rural demand for tractors and two-wheelers seems to be back on track soon boosting growth prospects for ferrous and non-ferrous (aluminium) automotive casting manufacturers.

According to the global research and analytics firm CRISIL, the steady focus on lighter vehicles will boost demand for non-ferrous castings, especially aluminium automotive die-castings, in the next decade.

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