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Conference Call Overview • Date: August 5, 2024 • Key Executives: • Brij Bhushan Agarwal (Vice Chairman) • Deepak Agarwal (Executive Director) • Focus: Financial performance and strategic direction
Financial Performance • Q1 FY 2025 Results: • Revenue: INR 3,612 crores (8.4% growth) • EBITDA: INR 488 crores (18% increase) • Profit After Tax: INR 276 crores (37% increase) • EBITDA Margin: 13.5% • Net Cash Position: INR 1,338 crores • Capital Expenditure: • Total spent: INR 4,948 crores • Target for current and next financial year: INR 2,000 crores
Strategic Initiatives • Business Expansion: • Focus on aluminum foil and stainless steel • Targeting 80% revenue from value-added products in five years • Significant growth potential in stainless steel due to government projects • Production Goals: • Stainless Steel: 0.7 to 0.8 million tons target • Aluminum: Doubling foil capacity due to high demand
Market Outlook • Revenue Projections: • Target of INR 25,000 crores by FY 2026-2027 • Sustainable EBITDA growth expected at over 30% CAGR • Market Conditions: • Stable outlook despite short-term metal price fluctuations • Anticipated price recovery post-Diwali
Q&A Highlights • Government Policies: • Minor impact from reduced stamp duty on ferroalloys • Demand Insights: • Decent demand for stainless steel despite monsoon delays • Specialty Products: • Supplying intermediate products to defense companies • Cost Management: • Stable coal prices; slight correction in iron ore prices • Future Projects: • DI pipe plant commissioning in FY26 • New foil plant utilizing recycled materials planned
Additional Notes • Electric Vehicle (EV) Focus: • Signed MOUs for EV battery foil; full-scale operations expected by FY25-FY26 • Supply Chain Enhancements: • Plans for a new foil plant near existing facilities • Distribution Network: • Growing steadily with a focus on executing existing projects
Conclusion • The call concluded with management expressing optimism about future growth and strategic initiatives while addressing various inquiries from participants.
Conference Call Overview • Date: February 7, 2024 • Focus: Audited financial results for Q3 and nine months ending December 31, 2023 • Key Management: Vice Chairman Brij Bhushan Agarwal, CFO Deepak Agarwal
Financial Performance Highlights • Q3 Performance: • EBITDA increased by 83% year-on-year • PAT increased by 94% year-on-year • Consolidated revenue: INR 3,315 crores (13.5% YoY growth) • Operating EBITDA: INR 1,128 crores (5.2% increase)
• Nine-Month Performance: • Revenue: INR 9,589 crores (3.9% increase) • EBITDA margin improved to 11.8% • Net cash position: INR 1,209 crores after QIP
Strategic Developments • Qualified Institutional Placement (QIP): • Raised INR 1,385 crores, improving financial position to net cash positive
• Acquisition: • Mittal Corp acquired for INR 351 crores, entering the stainless steel segment
• Management Changes: • Appointment of Mr. Sheetij Agarwal as Whole Time Director
Future Plans and Investments • Planned capital expenditures: INR 4,332 crores over the next three years • Expansion of energy capacity and reduction of carbon footprint through solar initiatives • Target revenue for Mittal Corp: INR 1,500 to 1,800 crores for the next year
Operational Insights • Significant growth in long product production (80% increase YoY) • Cost control measures and improved coal availability expected to enhance margins • Plans for a green aluminum foil plant and collaborations in lithium battery foil production
Market and Growth Expectations • Projected growth of 12% to 15% for FY'25 • Focus on high-value foil production and EV battery manufacturing collaborations • No plans to dilute promoter stakes in the near future
Closing Remarks • Management expressed gratitude to participants • Call concluded with a Q&A session addressing various operational and strategic queries.
Earnings Performance • Date of Call: July 28, 2023 • Quarter Ending: June 30, 2023 • Consolidated Operating Revenue: ₹3,307 crore (3% YoY increase) • EBITDA: ₹405 crore (33% decline), EBITDA margin at 12.25% • Profit After Tax (PAT): ₹235 crore (43% decline), PAT margin at 7.11% • Financial Rating: CRISIL AA stable for long-term borrowing
Strategic Developments • CAPEX Plan: ₹3,915 crores approved for future growth, focusing on: • Enhancing power capacity • Downstream facilities • Renewable energy investments • Board Changes: New statutory auditors appointed and changes in Board composition
Market and Operational Insights • Product Mix: Revenue from roll products increased to 48% • Seasonal Factors: 10% decline in long steel volumes attributed to monsoon and maintenance activities • Expansion Plans: Targeting production of 500,000 tonnes of flat products, particularly in specialty steel and stainless steel
Future Outlook • B2C Market Penetration: Successfully entering the B2C market with value-added steel products • Renewable Energy Shift: Aligning with ESG goals, offering financial benefits • Revenue Growth Target: Anticipated growth of 15-20% CAGR from new CAPEX
Financial Management • Cash Flow: Reported at ₹300 crores for the quarter • Future CAPEX Projections: • FY24: ₹2,100 crores • FY25: ₹2,300 crores • FY26: ₹1,000 crores • Debt Management: Planned financing strategy to minimize debt
Key Projects and Developments • Ongoing Projects: Modifications at Mittal Corp focusing on specialty alloys and stainless steel • Aluminum Foil Segment: 65-70% of production exported; plans to develop battery foil for EVs • Upcoming Completions: Key projects like blast furnace and coke oven plant expected by December 2023
Investor Engagement • Q&A Highlights: • Management addressed inquiries on cash flow, CAPEX, renewable energy, and revenue expectations from Mittal Corp. • Discussions on promoter's financial involvement in upcoming fundraise are ongoing.
Company Adaptability and Strategic Focus • Geopolitical Challenges: Highlighted adaptability amidst high energy costs. • Value Chain Progress: • Lower-value products decreased from 63% (FY2019) to 31% (FY2023). • Finished steel contribution increased from 17% to 48%. • Expansion Plans: • Targeting import substitution in aluminum foil operations with 11,400 tonnes produced. • Ongoing projects include CRM plant and low carbon ferrochrome facility.
Financial Performance Overview • Q4 FY2023 Results: • Consolidated operating revenue: Rs. 3,380 Crores (18% YoY increase). • EBITDA: Rs. 413 Crores (86% rise QoQ, 38% decline YoY). • EBITDA margin improved to 12.2%. • FY2023 Results: • Total revenue: Rs. 12,610 Crores (21% growth). • EBITDA: Rs. 1,486 Crores (43% decline). • Improved working capital days from 43 to 24.
Strategic Acquisitions and Projects • Mittal Corp Acquisition: • Expected revenue generation of Rs. 1,700-1,800 Crores next year. • Focus on stainless steel production, particularly the 200 series. • Iron Ore Mines: • Secured high-grade iron ore mines in Maharashtra (66-67% Fe content). • Development in due diligence phase with no immediate production targets.
Future Growth and Financial Guidance • Volume Growth Expectations: • Anticipated growth of 15% to 17% in total steel sales. • Long products expected to grow over 20%. • Tax Rate: • Anticipated tax rate of 27% to 30% for FY2024. • Aluminum Production: • Projected production of 17,000 to 18,000 tonnes for FY2024. • Current capacity utilization at 55% to 60%, with plans to increase to 90%.
Operational Insights and Future Plans • Depreciation and Asset Additions: • Decrease in Q4 depreciation attributed to asset value. • Significant commissioning of assets expected, including 1.2 million tonnes of pellets and a 90 MW captive power plant. • Promoter Holding: • Plans to increase promoter holding to 75% without immediate equity dilution. • Iron Ore Mine Timeline: • 10-year timeline for operationalizing the iron ore mine with a capacity of 250 to 300 million tonnes.
Conclusion • The call concluded with a Q&A session addressing various financial and operational queries, emphasizing the company's focus on growth, diversification, and risk management.
Company Overview • Date of Call: February 15, 2023 • Key Executives: Brij Bhushan Agarwal (Vice Chairman), Sanjay Kumar Agarwal (Joint Managing Director) • Focus: Unaudited financial results for Q3 and nine months ending December 31, 2022
Financial Performance • Revenue: • Q3 FY23: INR 2,921 crores (13% YoY increase) • Nine months FY23: INR 9,230 crores (22% YoY increase) • EBITDA: • Q3 FY23: INR 222 crores (65% decline) • Nine months FY23: INR 1,072 crores (45% decline) • Revenue Composition: Steel products now account for 70% of total revenue (up from 60% previous year).
Strategic Updates • New Appointments: N.G. Khaitan as Independent Director • Acquisitions: Ramsarup acquisition • Capital Investments: • New cold rolling mill and enhancements to existing plants • Total capex plans of INR 600 crores in two phases
Production Capacity Expansion • Steel Billet Capacity: Increased from 0.9 million tons to 1.7 million tons, targeting 2 million tons by June 2023. • Long Product Capacity: Increased from 0.8 million tons to 1.67 million tons, also targeting 2 million tons by June.
Market Insights • Coal Prices: Slight decline noted; current costs around INR 12,500 to INR 13,000 per ton. • Iron Ore: Inventory buildup acknowledged; no significant price changes expected. • Aluminum Foil Business: Strong growth, contributing 9% of revenue from exports.
Future Outlook • Operational Efficiency: Focus on improving operational efficiency and cost optimization. • Product Diversification: Emphasis on stainless steel and cold rolling mills. • Investment in DRI Production: Aiming to address market deficits and enhance energy generation.
Financial Metrics • Interest Expenses: Increased from INR 675 crores to INR 1,377 crores. • Volume Sales: Decreased from 8.5 lakh tons to 7.6 lakh tons due to strategic shifts. • Growth Expectations: Anticipated 30% growth in overall volume supported by increased capacity.
Conclusion • Strategic Focus: Emphasis on organic growth, enhancing existing capabilities, and cautious approach towards acquisitions. • Management Confidence: Executives expressed confidence in operational skills and long-term sustainability.