Your understanding is exactly correct. I got IPO allotment in the company but wanted to research more for increasing the position size. I had a talk with their IR team, and they’re targeting 500cr revenue by 2030 I think.
The reason they’re expanding into transformers and other markets is bcz the size of Furnace market isn’t large. Most steel companies use BOF method bcz the quality produced is better. More importantly the entire steel industry is undergoing a CAPEX right now, which means this is the best time for the company but still most expansion is happening through BOF route. Tata Steel tried to get a plant in UK switch to EAFs but they’re facing huge protests.
Overall, I think the promoters are really honest and diligent so if they figure something out by cracking new product lines, that could be great. But the total market size of the business is extremely small. Infact, total size for EAFs is around 700cr out of which megatherm takes around 160cr, electrotherm takes 200cr and a few other players occupy the market and there isn’t much scope for expansion/growth.
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