Ifgl refractories ltd


IFGL REFRACTORIES is a manufacturer of Specialised refractories and requisite operating systems for steel industry. The company markets its products worldwide with operations in India, Brazil, China, Czech republic, Germany, UK and USA.

The company has recently ventured into bio ceramics which entails manufacturing artificial implants like hip joints etc.




Indian promoters hold 56.83 % stake while foreign promoters hold 14.47% stake. Total promoter stake is 71.3%.

Debt â As on march 12, long term debt is around 64 crores while short term debt is around 49 crores. Cash and equivalents is around 19 crores.






















The company has a lot of subsidiaries with the ones in US and Germany seemingly doing well.

Most of the details and investment merits and risks have been discussed in details in the attached HDFC report.

Technically on weekly chart the stock seems to be breaking out from a rounding bottom formation which could provide further upsides from current levels of 43-44.

the following link provides recent research reports on the company posted on company website.


views invited.

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Ashish Chugh recommends this as “hidden gems”.

Isnt this co a good pick as the promoters hv walked the talk over last few years ,with PE still a single digit level,capex done,multi location manfg operations,better prospects for steel in India n abroad?

P Bajoria MD.Highlights of the call byCapital Mkt:

In June 2014 quarter consolidated sales grew 13% to Rs.205.2 crore.EBITDA grew 28% to Rs 31 crore.EBITDA margins grew 133 basis points to 15%.PAT grew 24% to Rs 18.40 crore.On a standalone basis, sales grew 0.38% to Rs 81.80 crore.EBITDA grew 21% to Rs 12.5 crore.PAT grew 29% to Rs 7.0 crore

Rationalization of costs and stable Rupee against major foreign currencies helped improving margins for the Indian business.USA benefited due to improved realization of per unit of EIC and Germany benefited due to improved capacity utilization and product realization.Subsidiaries in USA, U K and Germany continued to record satisfactory performance. Revenue from operations outside India increased to Rs 20.2 crore (up 20%). Similarly, PAT grew 49% to Rs 3.8 crore.

Indian subsidiary, IFGL Exports Ltd stabilized its operations in FY14. The company continues to remain positive on this division and is doubling capacity by year end. Revenue increased by Rs 6 0 crore, up 101%. PAT. PAT stood at Rs 1.5 crore against loss of Rs 30 lakh.

The management is seeing early signs of recovery in the Indian Economy. The management believes the commitment of the government towards infrastructure building which in turn will improve the demand for iron and steel in the country will lead to increased consumption of refractoriness thereby making IFGL a direct beneficiary of the infrastructure impetus.Iron & Steel Industry will benefit from Government's increased focus & spend on Infrastructure. Easing financing options for Infrastructure projects will propel economic growth.

On the global front the management is seeing a steady recovery led by USA and Europe. The company's cost efficient production and presence in more than 50% of the steel producing countries will enable the company to enhance its performance. Its capacity expansion programme in USA continues to be on track and the management is positive of incrementally improving its sales performance from America.There has been no significant increase in price of the products.

Margins outside India improved but there will not be any significant shift in margins. Germany subsidiary (Hoffman Ceramics) did well in June 2014 quarter.Gross long term debt is Rs 57 crore.FY 2015 growth prospects targeting sales growth as shown in the past few years of around 15%. For EBITDA margins, the company would not like to give any guidance but it would like to maintain the margins.

Nothing much impact on Depreciation on consolidation level due to change in policy.In its product segment it commands market share of 15%. Its competitors are Vesuvius, Orient Refractoriness and OCL.Increasing capacity utilization levels in International Business along with completion of expansion in USA and Gujarat facility remains key focus area for IFGL.The company will double its capacity of the USA (EI Ceramics) subsidiary.It is Tripling Kandla SEZ Capacity to service exports market through Kandla SEZ facility and freeing up capacity in Orissa facility to cater to Indian Steel demand.

USA subsidiary's increased capacity should commission by FY 2015 end and Gujarat subsidiary (in Kandla) should start commissioning by Q1 of FY 15-16. Capex for both these subsidiaries were around $ 2.5 milion capex.The company has added 2-3 new customers in the last 6 months.

Highlights of the Concall by Capital Mkt;

Consolidated Performance:Total revenues fell 1.2% on a consolidated basis to Rs 199.8 crore for Q2FY'15 compared to Q2FY'14 while EBITDA fell 18% to Rs 25.07 crore. PBT was down 22% to Rs 19.84 crore while PAT was lower 27% to Rs 13.89 crore.EBITDA margin for the quarter on a consolidated basis fell to 13% in Q2FY'15 from 15% in Q2FY'14. PAT margin was down to 7% from 9%.

Exports forms 82% of total consolidated sales in Q2FY'15 as well as in H1FY'15.For H1FY'15 revenues rose 5% on a consolidated basis to Rs 404.95 crore compared to H1FY'14 while EBITDA increased 1% to Rs 56.08 crore. PBT was flat at Rs 45.73 crore while PAT was lower 5% to Rs 32.33 crore.EBITDA margin on a consolidated basis for H1FY'15 fell to 14% from 15% in H1FY'14. PAT margin was down to 8% from 9%.

This quarter, Rupee has been more or less stable against Dollar. It however, significantly appreciated against Euro & Pound Sterling, which are the major currencies for the company for exports as well as consolidation. Loss on account of Foreign Exchange Translation for three ended on 30/09/14 was Rs.1.06 cr. Gain on account of Foreign Exchange Translation for three ended on 30/09/13 was Rs.4.20 cr.

Standalone Performance:On a standalone basis sales rose 2% to Rs 85 crore while EBITDA rose 35% to Rs 12.7 crore.PAT was up 48% to Rs 7.1 crore.Exports forms 57% of total standalone sales in Q2FY'15 and 55% in H1FY'15.EBITDA margin for the quarter on a standalone basis rose to 14.87% in Q2FY'15 from 11.39% in Q2FY'14. PAT margin was up to 8.36% from 5.74%.

For H1FY'15 revenues rose 2% on a standalone basis to Rs 167 cr compared to H1FY'14 while EBITDA increased 27% to Rs 25.2 cr. PAT was up 38% to Rs 14.2 cr.EBITDA margin on a standalone basis for H1FY'15 rose to 15% from 12% in H1FY'14. PAT margin was up to 8% from 6%.The company has taken forward cover against Euro and that has given positive effect unlike loss in previous year on account thereof. Profitability would have been better further had Rupee not appreciated against Euro.

Others:IFGL refractories expansion in USA remains on track and should be able to commercialize the increased capacity by March 2015.Indian subsidiary, IFGL Exports also remains on course with its expansion program tripling Kandla SEZ capacity which should be on stream by H1FY2016.The company is yet to see policy announcements of the Government trickle down in terms of increased infrastructure activity on ground However, the overall environment remains buoyant. India is likely see close to 40 million tonne of steel capacity addition in the next 2-3 years and this shall immensely benefit the Refractory Industry

The company is keeping a close watch on developments taking place globally because of which scenario continues to remain benign and could impact Steel companies.TechNavio research forecasts the Refractory Material market in India to grow at a CAGR of 9.85 percent over the period 2013-2018.Good quality refractory getting manufactured in India due to the advent of Global majors and this will benefit the Indian Steel industry.The company feels geopolitical tensions in Eastern Europe and slower recovery in Western Europe is a cause of concern.Raw material prices are stable and the company expects no major fluctuation in prices or availability.

**Call add by P Bajoria MD & R Agarwal Company Secretary.**Highlights by Capital Mkt;

Consolidated Ebidta is about 100 bps lower compared to standalone Ebidta margin of around 14.8% due to product mix and losses in some of the regions in EU. Also international subsidiaries are operating at much lower capacities. There is an ample scope of better economies of scale both in Indian and in international operations.

As per the management, new products, new customers and increase in market share both in India and in international markets will drive grwoth. Higher economies of scale and better product mix will help to offset any margin pressure coming from steel companies, given the fall in steel prices. As per the management, if the prices of steel remains stable, there will be increase in output and demand which has remained sluggish, will come back.

In EU market, in Germany the volume was impacted and losses was reported due to generally weak quarter and overall sluggish EU market. However, with ECB infusion of funds, management expects EU subsidiary to perform better.

US subsidiary continues to perform better and by end of March 2015, the capacity of refractory will almost double to 1.6 lakh tons.

In India, the Kandla Sez capacity will be operational by Dec’15 and will be ready to serve the exports market which will release the capacity in Orissa facility which will be used to cater the Indian steel demand.

Overall capacity utilization stands at around 60% on an average basis at consolidated level.

Overall debt is steady at around Rs 100 crore and management expects to repay some of the debt going forward.Overall, management expects steady growth going forward.

Highlights of the Concall by Capital Mkt;Consolidated Performance
Total revenues fell 3% on a consolidated basis to Rs 195.4 crore for Q4FY’15 compared to Q4FY’14 while EBITDA fell 34% to Rs 19 crore. PBT was down 40% to Rs 14.5 crore while PAT was lower 48% to Rs 8.4 crore.EBITDA margin for the quarter on a consolidated basis fell to 9.7% in Q4FY’15 from 14.6% in Q4FY’14. PAT margin was down to 4.3% from 7.8%.Exports forms 78% of total consolidated sales in FY’15.For FY’15 revenues rose 2% on a consolidated basis to Rs 793.5 crore compared to FY’14 while EBITDA decreased 12% to Rs 98.9 crore. PBT was down 14% to Rs 78.7 crore while PAT was lower 17% to Rs 53.1 crore.EBITDA margin on a consolidated basis for FY’15 fell to 12.5% from 14.5% in FY’14. PAT margin was down to 6.7% from 8.2%.
Standalone Performance
On a standalone basis sales rose 7% to Rs 87.25 crore while EBITDA fell 17% to Rs 11.63 crore.PAT was down 18% to Rs 5.97 crore.Exports form 52% of total standalone sales in FY’15.
EBITDA margin for the quarter on a standalone basis fell to 13.3% in Q4FY’15 from 17.1% in Q3FY’14. PAT margin was down to 6.8% from 9%.For FY’15 revenues rose 3% on a standalone basis to Rs 338.2 crore compared to FY’14 while EBITDA increased 5% to Rs 48.9 crore. PAT was up 10% to Rs 26.9 crore.EBITDA margin on a standalone basis for FY’15 rose to 14.5% from 14.2% in FY’14. PAT margin was up to 8% from 7.4%.
The company has been able to grow its volume and improve its market share in the global refractories space despite tough global environment.Volatile currency has its bearing on inventory and margins as well for international business.The company USA based subsidiary, El Ceramics, has completed initial expansion of manufacturing facilities in Sharonville and Fairfield ohio in December 2014. This has resulted in a capacity increase to the main line Sharonville ISO plant from previous 85000 pcs per annum to a new current level of 126000 pcs per annum. Also in Fairfield the company has installed a completely new plant for the manufacture of the clay graphite foundry stoppers with a capacity of 10000 pcs per annum
German subsidiary, Hoffman ceramic GmbH engaged in the manufacture of foundry ceramics performed well in as much as PBT and PAT has increased by 93% and 104% respectively on a YoY basis.
India business continues to be stable. Cost control measures and product mix have proved to be beneficial with margins moving up substantially. The company is seeing slow signs of recovery in Indian Economy and is hopeful that government infrastructure focus will improve demand scenario for industry.
The company is hopeful of turning around for the steel industry in FY16 and is bullish on Indian steel industry.Margins fell because of strengthening of the rupee against the euro. However, going forward the company is trying to improve marginsin FY’16 by using alternate raw materials, also the cost of energy has come down and some other raw material prices have dropped.

Highlights of the Concall by Capital Mkt
Total revenues fell 9.5% on a consolidated basis to Rs 185.8 crore for Q1FY’16 compared to Q1FY’15 while EBITDA fell 15.8% to Rs 26.1 crore. PBT was down 18.9% to Rs 21 crore while PAT was lower 17.4% to Rs 15.2 crore.EBITDA margin for the quarter on a consolidated basis fell to 14% in Q1FY’15 from 15.1% in Q1FY’15. PAT margin was down to 8.2% from 9%.
Monocon Group, Company’s UK operations, reported Income of GBP 6.18 million for O1’FY16. EBIDTA came in at GBP 0.35 million with a margin of 5.7%. PAT was recorded at GBP 0.22 million. Utilisation levels are continued to be improved at plants while reducing debt levels.
Hoffman Ceramics, Company’s German Business, reported Income of Euro 2.85 million for O1’FY16. EBIDTA came in at Euro 0.36 million with a margin of 12.6% an improvement of 220 bps YoY. The increased servicing levels coupled with lower traded goods sales have improved financial efficiency. PAT was recorded at Euro 0.22 million with a margin of 7.7%
Ei Ceramics, Company’s USA Business, reported Income of $3.51 million for O1’FY16. EBIDTA came in at $0.23 million with a margin of 6.4%. PAT was recorded at $0.07 million. Increased imports of Steel from China in USA, has led to lower production causing low utilization levels at plants.
IFGL Exports, company’s Indian subsidiary focused on Exports market and operating in SEZ from Kandla in Gujarat, reported Income of Rs.11.3 crore for O1’FY16. EBIDTA came in at Rs.2.94 crore with a margin of 26%. PAT was recorded at Rs.1.62 crore with a margin of 14.3%. Favourable currencies inexports have led to better realisation.Standalone Income stood at Rs.80.7 crore, while EBITDA stood at Rs. 11.9 crore with a margin of 14.7%. Profit after Tax was recorded at Rs.6.38 crore for the quarter. Domestic sales increased 5% YoY.In 2014, World Crude Steel Production grew 1% whereas India saw a growth of 4.3%Cheap imports of Steel in India remains a cause of concern however the recent intervention by Government of India to raise import duties shall provide some reliefDemand for refracting material is expected to be better in emerging countries such as China, Brazil, Russia, India and South Africa while the demand is likely to be constant 14 for developed nationsResearch & Development continues to be an area of focus for players in therefractories industry globally.Good quality refractory is getting manufactured in India due to the advent of Global majors and this will benefit the Indian Steel industry.

Highlights of the Concall by Capital Mkt
Total revenues fell 8% on a consolidated basis to Rs 372.4 crore for H1FY’16 compared to H1FY’15 while EBITDA before provision for exceptional item fell 14.4% to Rs 48 crore. The provision of Rs 6.29 crore has been made on account of bankruptcy of one of customers in UK. PBT was down 31.7% to Rs 31.2 crore while PAT was lower 34.7% to Rs 21.1 crore.
EBITDA margin for the quarter on a consolidated basis fell to 12.9% in H1FY’16 from 13.8% in H1FY’15. PAT.Standalone Income stood at Rs. 165.9 crore. EBITDA is Rs. 23.5 crore. EBITDA margin is 14.2%. Profit after Tax is Rs.12.66 crore for H1 FY16. Performance on standalone basis continues to be stable. The recent measures of Gol coupled with execution phase of India has begun which would lead to infrastructure creation and should improve performance of domestic steel producers
Monocon Group, UK subsidiary, reported Income of GBP 14.05mn for H1FY16. Profitability was impacted owing to one-time provision of GBP 0.64 mn in Q2FY16 on account of bankruptcy of UK based Sahaviriya Steel Industries, UK (SIS, UK), being British subsidiary of leading Thai Steel maker
Ei Ceramics, USA Business, reported Income of $ 7.67mn for H1FY16. EBIDTA came in at $0.61mnwith a margin of 8%. H1FY16 PAT was recorded at $ 0.25mn. . Lower domestic production of Steel in USA due to increased imports impacted the performance
Germany performance continues to have stable performance. Hoffman Ceramics, German Business, reported Income of Euro 5.35mn for H1FY16, EBIDTA came in at Euro 0.61mn with a margin of 11.47% an improvement of 91bps YoY.PAT was recorded at Euro 0.38mn with a margin of 7.18%
IFGL Exports, Indian subsidiary focusing on Exports market and operating in Kandla SEZ in Gujarat, reported Income of Rs. 23.30 crore for H1FY16. EBIDTA is Rs.6.1 crore with margin of 26%. PAT is Rs. 3.48 crore with margin of 14.95%. Favourable currencies led to better realisations. Phase 2 of expansion will now be completed in FY17.
Net Gearing stands reduced to 0.14x as on 30.09.2015 from 0.19x on 31st March 2015.
During quarter ended on September, 2015, Steelmakers continued to reel worldwide due to several macros likeslowdown in Chinese Economy, geopolitical conflicts, financial market turbulence, low investments, dumping of iron and steel by China. Global Steel production also fell by approx. 2.8% in H1FY16.Chinese Steel Exports increased by 28% in first 6 months of the year.
The World Steel Association has forecasted demand improvement in 2016. The company expects it to percolate down to its businesses, and expect better performance going forward, being directly related to iron and steel industry.
Domestic Steel makers in India are also under lot of stress. However few measures initiated by Central Government has given some respite to Indian steel makers- 1) To counter rising imports, 20% safeguard duty in September on steel imports from all countries to be valid for 200 days, 2) Import duty on base metals hiked, including iron and steel by 2.5% to counter cheap imports from China after Yuan devaluation and 3) Anti-dumping duty of up to USD 316 per tonne imposed on imports of certain steel products from three countries, including China.

Hi Hitesh,

are you still positive on this stock @77

CONFERENCE CALL - from Capital Markets

Management expects FY’17 to be better than FY’16

The company held its conference call on 18th May’16 and was addressed by Key management

Key Highlights

  • In CY’15, the company saw a drop in Steel production in US and depreciating Euro, both affected the realization and margins for refractory business. Overall, steel production was lower by more than 4% in CY’15. However for CY’16, Worldsteel organisation projects a 2% increase in world steel production excluding China and another 4% increase in production in world steel excluding China in CY’17.

  • With the outlook of Steel production expected to improve worldwide particularly in countries like South East Asia, IFGL will get major benefits as its already present in more than 50% of the steel producing countries of the world.

  • Domestically, increase in spend on infrastructure segment and increase in exports will lead to higher steel demand and higher refractory demand and better realization.

  • Of the total consolidated net sales, around 33% came from EU (excluding UK), 24% came from US, 22% from India, 12% from Asia (excluding India) and rest from UK.

  • At consolidated level, net sales for Mar’16 were lower by around 9% due to lower volumes and realizations. Excluding Rs 6 crore of provisions in UK subsidiary which is a one off item, Ebidta was hovering around 12.2%, lower by around 50 bps. Management expects the Ebidta to improve with expected increase in volumes and economies of scale benefits.

  • In FY’16, US performance both volumes and realizations were under pressure due to Chinese dumping. Net sales stood at US $ 15.4 for year ended Mar’16 as compared to US $ 16.6, with PAT of US $ 0.8 M as compared to US $ 1.5 M for Mar’15 period. However, actions were taken by the US government in form of anti dumping duties, which should help in reviving the domestic production in US in FY’17.

  • Germany markets showed healthy demand and improved product mix which resulted in higher margins and profitability for the company. Net sales for year ended Mar’16 stood at 10.6 M Euro as compared to 10.2 M Euro for Mar’15 period while PAT stood at 0.8 M Euro compared to 0.6 M Euro for Mar’15 period. Management expects the improvement in profitability to continue with better economies of scale.

  • Monocon Group in UK financials was affected due to onetime closure charges and lower volumes. However despite the additional expenditure, the UK subsidiary reported profits. Net sales stood at 22.8 M Pounds for 12 months ended Mar’16 as compared to 27.4 M Pound for 12 months ended Mar’15.

  • IFGL Exports reported strong profits due to higher exports to EU markets and stable currency. While net sales stood at Rs 46.5 crore, up by around 8% for Mar’16, PAT jumped to Rs 6.6 crore from Rs 0.4 crore for 12 months ended Mar’15 period.

  • All international operations are profitable and self sustainable in terms of generating cash flows to manage debt and fund their internal expansions. At consolidated level, the capacity utilization on an overall basis is around 65% and as per the management there is plenty of scope of economies of scale benefits to come going forward.

  • While, some of the signs of recovery of steel and actions on anti dumping duty already taken by the government is visible on the grounds domestically, management wants a further clarification which it expects by end of H1 FY’17 to receive to forecast the volume growth expected for FY’17. Overall, management expects FY’17 to be better than FY’16 but its quantification is difficult.

  • The company has been paying debt constantly and will be a net debt free company in next 12-15 months

  • Not much capex planned by the company in FY’17 except some capex in IFGL Exports.

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This company definitely looks interesting with EV/EBITDA of 10 times, and that too at bottom of cycle.

The peers trade at much higher valuations.

The latest ppt is attached for reference

Good report

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What a company ! Near 90 cr cash generation per year. Indian Capex over next two years will be relatively profitable compared to overseas companies. available @ 500cr mcap. Highly valuable.

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Monarch Networth Capital Ltd: Investment Idea – IFGL Refractories Ltd. – Coming of Age and ready to re-rate

MCap: Rs9.5bn | Fair Value: Rs600| CMP: Rs265

~Blowout earnings growth after 4years of Consolidation: IFGL Consol EBITDA is expected to double due to
i.) several proactive steps taken by the management (capacity expansion at Kandla/Orissa/Vizag and recruitment of industry veterans from peers at key positions),
ii) gain in market share in domestic refractory business through increased product offerings and better customer reach (already visible in 9MFY21 nos as IFGL has added several clients in both mini-mills and large mills in the last few years) and
iii) favourable demand scenario from end-user industry of steel globally.
iv) We expect IFGL’s overseas subs (all 100% owned) to do very well in next two years as those markets recover from Covid.

~Net Cash balance sheet and superlative cash flow generation track record => High payout on the cards: IFGL has ~Rs2.4bn net cash on BS as at Dec’20 (accounting for >25% of current Mcap) and we see high probability of increased payouts through dividends and/or buyback. IFGL has best cash flow generation track record in the industry (well ahead of MNC peers) with cumulative OCF/FCF of Rs4.1bn/Rs2.7bn over FY16-20 vs cumulative EBITDA of Rs4.6bn which implies >100% EBITDA to OCF conversion (post tax basis).

~Market’s perception on low return ratios changing leading to re-rating - IFGL has traditionally traded at large discount (as high as 65-70%) to other MNC refractory companies (Orient Refractories and Vesuvius) led mainly by low return ratios of IFGL which in turn were impacted due to large goodwill on the books. We see the discount narrowing led by 1. Lowering of impact of goodwill as IFGL has been writing down Rs27cr of goodwill every year (5 years already done and 5 more are left), 2. Large earnings growth aiding return ratios and 3. Better performance by IFGL vs MNC peers on most metrics from FY21 getting noticed by the investors.

~Ready to re-rate - The stock is trading at extremely compelling valuations of 3.3x/2.6x FY22E/23E EV/EBITDA for a niche business which has been throwing consistent cash flows and is in midst of strong earnings break-out. The current multiples of IFGL imply a discount of 65-70% vs MNC peers even though they are expected to deliver much lower growth vs IFGL. We see high probability of markets spotting this anomaly sooner than later leading to re-rating for IFGL. We see fair value of IFGL at Rs600 based on 8.5x FY23E EV/EBITDA.

Research Report: http://bit.ly/3qPKTtp

Disclaimer: https://bit.ly/39derdz


Near-term triggers - Monarch Networth capitals Research report.
• Volume growth from existing and new customers backed by growth in steel demand 25-30 mnt of new steel capacities in India in next 3 years) and new product addition precast
• Price hikes from customers as a pass on of high raw material cost to elevate margins New Vizag capacity is superior in terms of cost vs Kandla and Kalunga due to freight benefits, port location and a modern and efficient plant
• One time write off of goodwill amortisation to magnify profit and return ratios, thereby warranting a re-rating.
Full report: Buy IFGL Refractories For 75% Upside Potential Says Monarch Networth (MNCL) - Goodreturns

Disclaimer: Not invested., in watch list.

Snippets of concalls from 2021 till now. i have noted down the most important details, these are management excerpts. makes a good read and helps you to understand the company better.

Market Share

12%, 13% of the market in which we operate. It will be anywhere between 12% to 15%. There is no authentic data available in the refractory but on thumb rule basis I think we should be anywhere between 12% to 15% level


I think the competition is there from Vesuvius, RHI, you have Tata Refractories, you have OCL, quite a number of competition, in fact the large refractory players, Calderys India is there, though they are not our direct competitors, but there were a number of refractory space. Worldwide also these names are there, Vesuvius, RHI, Krosaki.

EBITDA Margin Guidance


New Recruitment

we have Mr. James McIntosh, our Managing Director. James has been appointed as the Managing Director in September. Before becoming Managing Director, he was our President of our US subsidiary EI Ceramics and MCI


flow control refractories primarily

Our refractories are more consumable. It is only after they commission the plant we come in, not at the capex side, once if that running our refractories continues.

we are into nonferrous in a very, very small manner.

We could do lot of improvements and earlier we had only ISO not only ISO was the major product basket. Now in the last few years last couple of years we have tried to increase the other product ranges also like Slide Gate, Purging, Precast and the monolithic side and this year the percentage of these products have grown much faster than ISO

We are talking of a few product introductions and some expansion in the existing product mix. One is the precast shapes. It will basically be large shapes which we want to introduce in Vizag so that plant is under construction right now and then we would also go into brick business. We are not into brick in a big way. We have a small pilot production in our existing plant in Odisha so we will get into that business just to take care of our existing flow control business to that extent and we would expand our capabilities of the bone flux, which we manufacture in Rourkela so we will have more automated fully automated plant in Vizag. (Magnesia carbon bricks.)


Mini Mills contribute around 10% to the total revenue

For 1 ton of steel you require anywhere between 10 kgs and 12 kgs of refractories.

Certainly India is the number two producer of steel in the world. I think in 2022 the production will grow about 6.5% to 7% and in 2023, hese are levels which are much higher than any other country in the world. Steel increase is directly related to our refractory business because IFGL is 100% in the steel industry

I think our presence is majorly to the large steel mills and the medium sector

it talks of going to about 300 million metric tonnes by 2030-2031 from a current capacities of 140 to 145 million metric tonnes, which is a significant growth anywhere between 7% to 8% or 9% CAGR

Customer Concentration

The company’s customer profile remains well diversified with its top five customers driving 30-35% of its total sales.

Tata could be somewhere around 10% of our domestic sales

s. But on the large side we have added few customers like Tata BSL which was the Bhushan Steel earlier, we have added JSPL Angul which is a very new large customer

Our business can increase the various customers like Bhushan Power and Steel which is now JSW Group, we have had new businesses with JSW Dolvi and then JSW Salem.

SAIL yes we are maintaining some share but in some segment


Its exports account for 55-60% of its total sales.

Out of our exports from India, it could be about 50% of that into the Europe


with new capacities in place following the completion of its greenfield capex in Vizag and additional capacities in pipeline to be operational by the second half of FY2023

IFGL Odisha Plant Rs. 50 Cr in FY23 & FY 24 (including Research & Technology Centre at Kalunga, Odisha for an estimated cost of Rs.20 crores) - Odisha, this is a combination of both the expansion of capacity in our manufacturing but also Rs. 20 crores of the expenditure is for the research and technology center.

Isostatic product, Slide Gate product which is exclusively made in Kalunga only. So we would like to increase the capacities there. So that’s that that will be our major product line where we will spend money

IFGL Kandla Plant Rs. 44 Cr in FY23 & FY 24 - e Kandla plant, because it is based in the SEZ, our objective for that plant is more or less export

Visakhapatnam Project Rs. 65 cr by FY23 & FY 24 - Visakhapatnam are in new product areas for the company

Overseas business

IFGL’s operations are spread across China, Germany, India, the UK and the US through its various stepdown subsidiaries

ICRA has considered the standalone financials of IFGL Refractories Limited (IFGL) given the management’s stated intent of not providing any financial support to its overseas subsidiaries from the domestic business.


Cash at March 2022 stood at about Rs.263 Crores.

120 crores cash sitting idle in consolidated BS in current account not yielding any returns



Manufacturing Capabilities

Plants at Kalunga, Odisha, India

Plant at Kandla SEZ, Gujarat, India

Plant at Visakhapatnam, Andhra Pradesh, India – (Greenfield Expansion)

first phase of Vishakhapatnam plant built at a total cost of about Rs. 30 crores. Commercial production of monolithic has commenced from 1st of September 2021. The installed capacity of this Phase-I plant is 48,000 metric tonne per annum. 2-3 years to reach optimum levels

Contracts Tenure

The domestic contracts are generally on a 6 months to 1-year contract, but of late, it has been like a 3 to 6 months because the user industry wants a shorter term because of price volatility

In the domestic market, we call it along with application so application and supply contracts would constitute about 60% to 70% of the total domestic business

Overseas, there is no application contract with us. It is the purely supply

So if it is one year contract it is almost a fixed price contract and if it is three year contract at the end of the first year you can ask for the trial increase with proper justification.

Capacity Utilization

75% on consolidated basis

Raw Materials

Magnesia, Alumina, Zirconia

I think in value terms in the past, it used to be about 50% imports and 50% domestic. Now, it could be like 60% is imports and 40% domestic, because the rupee has depreciated against the dollar

Steel Export Duty Impact

I think what is our understanding is that this export duty is just to control the prices and the inflation and I think this should be pretty short term may be one month to three months’ time. It should not affect any performance of the industry as such and we have not heard any deferment of any capex plan


Out of it Rs.25 Crores to Rs.30 Crores are stuck in Ukraine and Russia so would it be recoverable or that is already into provision and all?

We have had a provision of Rs.13.8 Crore. we hope that once the situation resumes we will be able to because they are our long term customers. I think once they resume their operations, we should be in a position to recover that.

Goodwill & Tax Implication

Exceptional Item is the Impairment of Goodwill pertaining to German operations

And so this goodwill which is there with us how much is left more to be written-off?

Kamal Sarda : I think it should be about four and a half years left for write-off.

The tax impact of this is any ways taken on our books, right, last year.

Kamal Sarda : Tax impact is from 1st of April 2020, it is finished.

“Following the merger of erstwhile IFGL Refractories with the company under the amalgamation scheme goodwill of 267 Crores had arisen in the books of the holding company in 2016, which was being depreciated or amortized over a period of 10 years. As per the amendments in the Finance Act 2021 goodwill on amalgamation is no longer a depreciable asset and depreciation on goodwill is not allowable expenditure effective April 1, 2020. Company has therefore recognized one time deferred tax charge of 21.6 Crores for Q4 FY2021 and 20.2 Crores for year consequent to the reduction of depreciable amount of goodwill for the tax purpose to nil. This deferred tax charge does not involve any cash outflow either the current year or in the future also”