Record EBITDA per ton masks soft YoY growth; FY27 delivery hinges on capex ramp

Delivered ₹262.1 Cr, +15.2% QoQ (corroborated), +4.9% YoY (slightly higher than claimed 3.6%)

Operating margin 10.7% implies ~₹28 Cr operating profit; EBITDA slightly higher at 11.06%. Per-ton figure supported by strong Pre-Painted utilization at 95.4%.

Delivered PAT ₹14.1 Cr, +162.5% QoQ. Exact match.

Export volume 18,221 MT (+65% of total). Revenue growth claims granular and consistent with strong export order book (₹450 Cr, 80% export).

Production of 27,941 tons Q1 vs 25,870 tons Q4. Modest sequential growth. 'Teething troubles' language suggests execution risk not fully in margin yet.

Structural shift from Q4 cost shock. Pricing discipline resets quarterly with customers. Credible mechanism but dependent on continued customer acceptance.

Q4 was hammered by sudden fuel spikes (₹60→₹200/kg LPG). Q1 all new orders now priced to cover current costs + margin buffer, addressing prior vulnerability.

Prior call: FY27 ₹1,300–1,350 Cr, FY28 ₹1,700–1,750 Cr. This call: identical. No upgrade despite record EBITDA per ton. Reflects cautious execution posture.

Pre-Painted export +25% YoY (vs revenue +4.9% YoY), 65% of total sales. Entered 4 new markets (Latvia, Brazil, Jamaica, Somalia). Demand visibility strong.

Q1 production 27,941 tons (+8% QoQ). Expecting 75–80% utilization in 3 months implies ~40,000+ tons per quarter. Current run rate suggests 15–20% upside, not full potential.

Sustainable, further upside from Alu-Zinc ramp, second CCL, and solar. Potential for additional 1–2% margin expansion. If execution succeeds, headroom to grow EBITDA margin further.

100% Alu-Zinc ramp-up. Very strong order book; company running behind execution, not demand. Teething troubles in early months; ramp trajectory improving every month.

Order book ₹450 Cr exceptional. One of smallest supply chain partners to long-term export customers; headroom to grow share. Infrastructure/auto/appliances tied to GDP growth. MoUs signed for annual offtake.

Orders repetitive from long-term customers (quarterly resets). Visibility 3–5 months on continuous basis. Expected order book INR350–450 Cr ongoing. MoUs indicate annual lifting commitments.

Both. Incremental EBITDA ₹1,000–3,000/ton from Alu-Zinc vs galvanized. Driven by cost savings in production + premium pricing for Alu-Zinc product.

Had 20-year trouble-free supply. Q4 disruption unprecedented. Now diversifying: PSU + private suppliers, LNG from multiple sources (USA, Canada, Australia). Planning GSPC natural gas pipeline addition for de-risking.

Mix of internal accruals, debt, equity. ₹140 Cr already deployed. Residual debt ₹15–20 Cr for current projects. Peak debt-to-equity expected ₹125–130 Cr (vs 1.0x current), peak leverage ~1.25x.

Current cycle ~75 days (including creditor tenor). After cold rolling: inventory cut to ~50% (from custom SKU stocking). WC cycle could compress to single-digit days through just-in-time flexibility.

Correct estimate. But Phase 2 (second Alu-Zinc line + backward integration) still in blueprint stage. Premature to estimate commissioning or ramp timeline. Will firm up after capital finalization.

Less complex than Alu-Zinc; faster ramp expected. H2 FY27 assume 50–60% utilization. Peak revenue ₹1,600–1,700 Cr from color coating alone at full capacity.

Back-to-back business model: sell finished product in advance (order book), then procure raw material at locked prices. Cost pass-through resetting every quarter with new orders. Insulates from commodity price volatility.

Not peak. Prior numbers were old product (galvanized). New Alu-Zinc product improves margin profile considerably. Further headroom from higher capacity, renewable energy, higher % Pre-Painted sales mix.

Difficult to put precise number. Margins recovered from 8–9% to 11%, improvements underway. Further 1–2% expansion possible. Timing and full reflection in FY27 TBD.

No margin dip expected. As CCL2 starts, can consume more captive Alu-Zinc output, sell more value-added product. Q2 order book clear; no reason for dip. Multiple levers (capacity, solar, Alu-Zinc ramp) independent.

Growth gradual as company proves capacity/capability to customers. Grew from ₹100–120 Cr lows to ₹400–450 Cr highs over couple of years. As FY27 capacity added, order book growth should accelerate.

Reiterated from prior call, not upgraded. Assumes Alu-Zinc ramp to 75–80%, second CCL commissioning Q2 and ramp to 50–60% by H2. Both dependent on capex execution. Implied 30%+ CAGR, but Q1 YoY only +4.9%.

Requires Alu-Zinc ramp and new CCL capacity to deliver. Currently 27.9k MT Q1 FY27, but guided based on 50–60% new CCL2 utilization and 75–80% Alu-Zinc. Historical ramp curves suggest risk.

Current 11.06% EBITDA margin supported by strong Pre-Painted utilization (95%), Alu-Zinc ramp benefit, and cost normalization (LPG ₹80 vs ₹200 peak). Solar savings (50–55% grid power offset) materialize post-Q2. Further margin expansion depends on Alu-Zinc reaching 75–80% and cost discipline holding.

Phase 1 capex ₹140 Cr largely in CWIP, capitalization imminent. Peak debt expected ₹125–130 Cr (vs current ₹115 Cr) as Phase 2 details finalized. Funding mix internal accruals + debt + equity.

Currently at 62% utilization. Targeting 75–80% within 3 months via 'teething troubles' resolution. Q1 volume (27.9k MT) down YoY despite order book, indicating execution constraints. If ramp delays, FY27 revenue ₹1,300 Cr target unachievable.

65% of Q1 sales and 80% of order book from exports. Pre-Painted export growing +25% YoY, driving momentum, but concentration creates demand cliff risk if major customer reduces orders or European demand softens.

EBITDA per ton at ₹10,400 (all-time high) driven by favorable cost environment (LPG down from ₹200 to ₹80/kg, still 25% above pre-war), favorable product mix (Pre-Painted + Alu-Zinc), and full Pre-Painted capacity utilization (95.4%). Any cost spike, demand softening, or mix reversion could erode margins.

₹140 Cr Phase 1 (Alu-Zinc upgrade, CCL2, solar) in CWIP as of Q1; capitalization imminent in Q2. CCL2 and solar promised Q2 FY27 (Sep 2026). Phase 2 (cold rolling + second Alu-Zinc line, ₹350 Cr) still in blueprint; funding mix yet to be finalized. Any delay cascades FY28 targets to FY29.

LPG spiked from ₹60/kg (pre-war) to ₹200/kg (Q4 FY26) due to Strait of Hormuz closure; now ₹80/kg (Q1 FY27), still 25% above pre-war. Galvanization process heavily LPG-dependent. Any geopolitical escalation (Iran war, closure of Hormuz) could spike costs and erode EBITDA unless pass-through is immediate.