Soft quarter masked by recovery; 20% growth target intact, Speciality scaling

Delivered ₹1,167.9 Cr, growth 24.4% YoY

Blended Q1 was 4–4.5 ₹/kg; first 45 days hit at 2 ₹/kg, rest at 7–8 ₹/kg. Trajectory aligns, but Q1 result confirms hit.

PAT down 47.9% YoY and NPM collapsed to 1.8% despite 24.4% revenue growth; confirms deep margin compression in H1 Q1

Q1 volume +8.7% QoQ to 112k MT (vs 104k prior year); demand soft H1 Q1 per management. Capacity 680k tonnes with 20–25% buffer built in.

Operating cash flow ₹121 Cr reported, validates working capital discipline

From ₹150–200 Cr combined (FY27–28) to ₹200–250 Cr annually. Signals confidence despite soft Q1; management scaling Speciality faster.

20% growth for rest of FY27 reaffirmed; not cut despite Q1 demand slowdown. Assumes recovery from June.

First trial from leading tire manufacturer. Qualification typically 6–8 months; de-risks import substitution thesis.

Q1 contribution 10% of sales (vs 5–10% guidance); margins 20–30% higher than B2B. Doubled YoY, now a material hedge.

First 45 days absorbed ₹2/kg margin hit; new orders repriced. By May 15, back to ₹7–8/kg. Model holds if no further shocks.

Split Q1: first 45 days, absorbed ₹5k/tonne cost spike; 30–40 days of inventory hit (₹7→₹2 ₹/kg EBITDA). H2 Q1 recovered to ₹7–8 ₹/kg on new orders. From May 15, back to normal. Rest of year, 20% growth on track with demand improving, market share gains from B2C.

Trial stage now. 4 trials expected, 2–3 months each = 6–8 months to confirmed order. Some customers skip field trial, go direct to bulk trial. More trials expected this quarter from other customers.

EBITDA guidance stays 20%. Started quarter with higher base, but 3 quarters left; uncertainty. Comfortable with 20%, if we gain 20% volume, EBITDA will also grow at least 20%, if not more. But hedging for safety.

IHT + OHT combined 9k tonne capacity now, 15k by year-end. Next month targeting 50% utilization. 80% customer approvals in IHT. Per-tonne EBITDA ₹10–20 ₹/kg in IHT, similar range for OHT once optimized (70–80% util.). Much higher than regular business.

B2C in low-carbon wires (50–55% of total volume). Ambition: 50% of low-carbon from B2C = 25% of total sales. Currently 10% (from 5%). Margin 20–30% higher than B2B per tonne. Doubled YoY despite lower base.

FY26 target was ₹250 Cr, delivered ₹330 Cr. FY27 target ₹350 Cr, Q1 delivered ₹115 Cr cash flow despite challenges. Initiatives paying off. Targeting ₹200–250 Cr/yr going forward.

Speciality Wire EBITDA ₹600–800 Cr on ₹2–2.5k Cr invest. That's good ROCE. Also improving core business ROCE to 25% via B2C and cost initiatives, reducing capital base. Target 25% ROCE in core + Speciality combined.

20-year track record of 20% annual growth. Growth splits thirds: 1/3 market share with existing customers, 1/3 existing customers grow, 1/3 new products. R&D develops 20–25 SKUs/month, 250/year. Historically 85–90% is sweet spot for capital efficiency. We have capacity headroom and 25% excess planned.

70–80% of inventory is hedged against firm orders. Price up or down, passes to customer. Inventory loss also passes. Seen many crises before, come out flying. One quarter loss, next quarter recovers because orders already locked.

Yes, we see demand from almost all sectors now. Auto still strong, exports improving. B2C and Speciality initiatives helping. 2nd and 3rd Q generally weaker in infra, but overall positive in most sectors.

Export not viable due to raw material cost premium (₹10–15 Cr/kg higher in India). Can match Chinese on equal cost basis, but not viable. Target India market exclusively. At 2 lakh tonnes, targeting 45–50% share of Indian market currently 60–65% import-served. Big opportunity domestically.

Intentionally pay suppliers in advance to keep negotiating leverage (largest wire-rod purchaser). Gives price advantage. Other initiatives: receivables down, inventory down, channel financing rising. Payable financing is one tool, not the primary lever.

Q1 was soft due to geopolitical shock; demand recovering. Historical 20% track record. Rest of year assumes normal environment.

New annual capex framework replaces prior two-year pool. Anchored to 20% volume growth needs; flexibility via in-house equipment manufacturing.

Current EBITDA base ₹57 Cr (Q1 compressed). Management targeting ₹7–8 ₹/kg going forward (vs ₹4.5 blended Q1). 20% growth guidance hedged despite margin recovery potential.

IHT and OHT currently 35–40% utilized, breakeven at 60%. Timeline to 70–80% is H2 FY27–FY28. Steel Cord still in trial, revenue unlikely FY27.

Supports 20–25% annual volume growth. Backward integration in equipment manufacturing (50% in-house) provides flexibility; 6-month lead time vs industry 12–18 months.

Q1 saw gas costs triple in some plants, 1.5x blended. Cost-plus model lags; 30–40 day order book created ₹6–7 Cr hit when costs spiked suddenly. If West Asia tensions continue, gas/energy costs remain elevated.

Q1 saw subdued demand despite 24% revenue growth; management attributed to customer de-stocking. If infra or automotive cycle weakens further, 20% volume growth target will miss. Q2–Q3 historically softer; risk extends.

Steel Cord at trial stage; 6–8 month timeline to confirmed order is optimistic. IHT/OHT ramp assumes 70–80% utilization by H2 FY27; currently ~35–40%. If trials extend or customer approvals slow, revenue contribution misses FY27–FY28 targets. Margin assumptions (₹10–20 ₹/kg IHT/OHT, ₹600–800 Cr EBITDA at 2 lakh tonne Steel Cord) are unproven.

Capex raised to ₹200–250 Cr annually for organic growth + Speciality ramp (2 lakh tonne vision = ₹2–2.5k Cr over 5 years). With current EBITDA ₹57 Cr (Q1 compressed, assume ₹250 Cr run-rate), cash flow buffer is tight if demand misses or interest rates spike.

Largest wire-rod purchaser in India; pays suppliers in advance for leverage. But if global steel prices remain elevated, cost-plus may not fully recover due to competitive pricing pressure or customer pushback. Speciality wires especially sensitive: ₹10–15 Cr/kg raw material premium in India vs China makes exports unviable, constrains margins.