Strong demand, modest volume growth; capacity-constrained FY27-28, multi-year inflection FY29-30

59k tons sold, +6.5% YoY; revenue +12% YoY due to price increases

Delivered ₹10,760/ton (adjusted for Aichi fund gains), within range

Confirmed 255k tons target for FY27, vs 59k in Q1

6-7% direct exports, 5% indirect via Aichi, max ~10%; mgmt admits prior forecast off

FY28 raised to ₹8,000-12,000 (ceiling +₹1k), FY28-29 ₹9,000-12,000 (floor raised)

Prior: ₹8,000–11,000 current. Now: FY28 ₹8,000–12,000 (ceiling +₹1k), FY28–29 ₹9,000–12,000 (floor +₹1k). Drivers: volume spread, operating cost reduction, job work elimination, solar expansion.

Prior calls implied export-led growth; now capped at ~10% (6–7% direct + 5% indirect). Domestic demand so strong company refusing orders. Management admits prior assumptions were off.

Ingot casting commissioning Q3 FY27 (was not detailed before). Die steel, railway steel, windmill shafts production starts FY27–28 (import substitution of ₹1,000 Cr annual India imports). Increases FY28+ margin profile.

From ₹475 Cr budget, >10% savings confirmed (better terms, Indian equipment substitutes). Savings improve FY28+ ROI on capex.

Originally 500k–600k tons; now being reconfigured for 'significantly bigger' capacity with more testing lines. Cost per ton may be similar or higher due to Iran war metals inflation and rupee depreciation. Details by next quarter.

6–7% direct export, 5% indirect via Aichi trading arm = ~11–12% total. Admit prior estimates of direct exports were off; more demand is for components/forgings from India, not raw steel.

Well diversified, no concentration risk. Maruti currently ~10%; target to increase Maruti share. Not a concentration concern.

Applied for 3.6 lakh expansion; approval expected in 3–4 months. New plant: land finalized by mid-Sept, machinery also finalized by then. 5 lakh ton is steelmaking tons, not 5 million.

Forging project cost lower than ₹475 Cr estimate; >10% savings confirmed via better terms and Indian equipment substitutes. Commissioning Q4 FY27–28; revenue FY29–30 after 6–12 month customer ramp-up.

FY27: 255,000 tons. FY28: expect to cross 270,000 tons. Only 7–8% growth because current capacity limit is 300k license tons; non-auto diversification (die steels, railways) to drive second engine of growth.

Toyota global approval obtained via partnership. Maruti localization approval via partners. Quality/safety improvements ongoing. Toyota expanding in Sambhaji Nagar; need green steel, and we're only green steel player with approvals. Most OEMs target 30% green steel by 2030; circular economy focus.

Volume increase spreads fixed costs. Operating costs reduced, further reductions coming. Job work/outside processing to reduce from Q3 onwards. Fourth lever: new solar plant in ~1 year will add cost savings.

New solar capacity (not brownfield). Lower savings than Phase 1 because government now requires local cell manufacturing, raising panel costs vs imported panels in Phase 1.

No exact date, but should happen by later part of FY27. Samples sent; all work on track.

Land purchase, equipment orders, environmental clearance, plant progress, funding. Funding not an issue; ₹475 Cr capex funded via internal cash, Vardhman Group and Aichi commitments for equity, and debt from banks. Punjab government fully supportive.

If approval comes, will increase FY28 sales target from 270k to 290k tons (no capex needed initially). Beyond that, capex for another ~40-50k tons. By FY28–29, expect 330–340k tons.

Current average price ₹85k/ton. Die steels ₹2.5 lakh/ton (non-ESR), ₹3.5–4 lakh/ton (ESR). Volumes small but margins high. Ingot casting ready Q3; production starts FY27–28 within 300k ton license cap.

Exports 6–7% direct, max ~10% total. Aichi ~40% of exports. Admit prior assumption was wrong; domestic demand too strong to pursue exports aggressively.

Talking to a few, looking for more. Will be non-Aichi JV (Aichi focused on auto/stainless/die steels). Finding right partner will take couple of years. Separate company, JV structure because know-how requires equal partnership. Announcement when confirmed.

Q1 pricing settled with some OEMs; others still pending (likely to go higher). Q2 price increase asked for 1 July; Q2 process happens later. If Q1 settles higher, Q2 ask may come down slightly but Q2 numbers won't change (Q1 profit spills to Q2).

Reached 300k ton input capacity after Kocks Block. Team confident of hitting 330k ton capacity (10% higher production). Constrained by license today; running at full utilization.

Very gradual ramp. Already sending pre-qualified steel to Aichi, getting it forged, sending to customers for approval. Process approval shortens ramp timeline. But new business, customers need confidence, will take time.

No formal long-term order book system. Completely booked out, refusing orders. Demand very strong, all repeat business. Next volume increase from Maruti import substitution commercial production Q4 FY27.

Q2 will be higher prices (asking increase from 1 July). Q3 depends on raw material prices; no major change expected, may be same or slightly higher/lower. Q2 definitely higher.

No capacity constraint this year with current license capacity. In Q1, sold 59k tons; on track for full-year ~255k.

Depends on environmental approval for 360k ton capacity (expected in 3–4 months). If approved, can ramp to 290k without capex. Beyond that, requires new capex.

New 500k+ ton plant commissions FY29–30; assumes gradual capacity increase and new product ramp (forging, die steels). Execution risk on multiple projects.

Within stated range; achieved via price increases offsetting cost inflation, operational improvements from new furnace/Kocks Block.

Drivers: volume spread (270k+ tons), operating cost reduction (job work, yields), solar expansion impact in H2. NDT/peeling bottleneck relief (Q3) to improve product mix.

Floor raised by solar ramp (H2 FY27–28), new non-auto steels (die, railways) at higher margins, job work near-complete elimination. Execution dependent on non-auto ramp success.

TAA signed with Aichi Steel. Better terms negotiated, Indian equipment substitutes found. Commissioning Q4 FY27–28.

Originally budgeted 500k–600k tons; now being reconfigured for 'significantly bigger' capacity. Cost per ton TBD due to inflation (Iran war, rupee depreciation). Refined estimate by next quarter. Commission FY29–30.

Approval expected in 3–4 months. Capex phased; first phase 290k achievable without major investment, second phase (330k–340k) requires capex.

Current license capacity 300k tons; FY27 target 255k, FY28 expected 270–290k (depends on approval). Real inflection in volume (>10% growth) only when new plants come online FY29–30. Near-term growth limited despite strong demand.

Ingot casting to be commissioned Q3 FY27; stabilization by Q4. Die steel production to start FY27–28 within 300k ton license cap. But ingot casting is new process; production learning curve; customer qualification timelines unpredictable. Volumes could be <5% of total for years.

Forging plant commissioning Q4 FY27–28; management realistic on 6–12 month customer ramp (need approval, setup, volume commitment). Revenue contribution likely FY29–30 at earliest. If ramp slower than expected, ROIC on ₹475 Cr capex delayed.

Originally 500k–600k ton plant; now being reconfigured for 'significantly bigger' capacity due to market demand (continuous testing lines added). Cost per ton and total capex still being finalized. Iran war metals inflation and rupee depreciation raising costs. Commissioning FY29–30 is 2+ years out with execution risk.

Q1 price increases drove revenue growth; Q2 further increases asked for 1 July. But price pass-through depends on OEM cost indices. If steel/input costs soften, OEMs will resist price increases. Realized pricing in Q3/Q4 FY27 depends on raw material trajectory.