Company had challenging quarter due to the low demand in overseas markets, however consol. income increased by 33%, 85% increase in EBITDA and 95% increase in PAT. Growth largely driven by domestic operations.
Steel industry demand is feeling the impact of high inflation and high interest rates, and most markets have curtailed investment in new projects.
Domestic steel industry is expected to grow driven by infrastructure in four key areas, national highways, railways, water infrastructure and government housing.
In November Company will inaugurate new and now completed state-of-the-art research and technology centre at manufacturing location in Odisha. This will enable the company to improve its own material and intellectual property database, expand its products and improve its technological approach to sustainable material and technology development
Per Management, approximately 75% of the Indian steel growth is projected to come from Odisha only.
Company is also diversifying to the non-ferrous industry, such as cement, petrochemical, copper and other industries.
Odisha and Kandla capex in final phases of completion and Vizag capex expected to be ready by Mar’24.
On an annual basis, Company expects stable 15% EBITDA margins at standalone level and 12% EBITDA margins at consolidated level going forward.
Steel growth in India has been consistently over 7%-8% over the last 10 years. Company does not see any affect of any Chinese products coming in and distorting the markets.
There is no pricing power in refractory industry. It all depends on quality of the product.
Domestic export split pre covid was 40:60 which has now changed to 60:40.
Company planning to develop a new plant in Odisha, for which land allocation is expected by Nov-Dec 23.
*A very healthy quarter for the company with a 33% increase in our consolidated income, 125% increase in our PBT, 95% increase in PAT and 85% increase in EBITDA versus Q2 FY '22-'23.
The foundation of this great result was domestic operations, nstructural and investment focus has been in the last couple of years, and is now paying off .Domestic operations have been the main driver of the company’s success, with a 26% rise in consolidated income for the first half of the year.
The company is focused on improving and investing in its domestic manufacturing locations to strengthen its position in the market and expand its product line.
3 * The Indian steel industry is projected to maintain robust growth, with significant opportunities for growth in Odisha
4 * Expansion projects are underway in Germany, the USA, and the UK to improve capabilities and efficiency. The company is exploring synergies between Monocon and Sheffield Refractories. Plans for expansion into new areas may involve building new plants, forming associations, or acquiring new organizations.
5* Over the next seven to eight years, we expect Odisha to contribute an additional 80 million tons to 100 million tons of the country’s steel production growth, making it a major driver of growth in
India. Approximately 75% of the Indian steel growth is projected to come from Odisha only.
And this is why we are making a substantial investment in this region. The company is diversifying into non-ferrous industries such as cement, petrochemicals, and copper. The company is interested in expanding into new product areas outside of steel but maintains a strong focus on the steel industry.
6 * In Kandla, we have done almost 90% of the capex. We had announced about INR 50 crores capex there. In Vizag, we have completed almost 60% of the capex plan, and the balance would be spent by March '24.
