1. capex

• defence building work is going on and commercial production in q1 next financial year in which forging would be done for this only they made subsidiary company

• here they will make artilery and aerospace material

2. profitability

• have increased accross the board and bottomline has grown faster than topline due to margin expansion

3. industry tailwinds –

• expect good demand from solar rooftop projects as framing is required

4. management –

• guidance stays intact

• fy24 -3500+, fy25 4000+ , fy26 -4500+

• margin this year 8.5% , next year 9%+ , fy26 9.5% plus the defence margins

5. business details

• business now bearing fruits of the seeds sown in the past

• mix changing towards high VAP

• exports are 25% , even in difficult times of export we have nbeen able to grow exports and maintain last years rate

  • additional capacity in gujarat is just on time that we can make up value added products

  • secundarabad new hydraulic tubing plant will also cater majorly to exports will give good boost to export

• auto tube will have improved demand as and when more and more EVs comes

• 7000 tonnes of fabrication done in railways

• auto sector – entering constriuction machinery by making hydraulic tubes of 15 mm thickness thus replacing seamless tubes , one of the few plants in world

• conducting RND continously

• new software is helping

• upgrading and changing tube mills to make different sizes to cater to export demand

• company has made significant in roads in road safety sector by adopting european desiogn but reducing cost of ncrash barrriers

• segment wise revenue

  • structural pipes – 50%

  • precision (erw, cdw) precision tube -25%

  • structure division 10%

  • forging -15%

• defence can give 350-400 crs revenue but only after rampup from h1 of fy25 this 350-400crs will only come from fy26

  • INTO FORGING

  • only 2-3% of revenue

  • margin profile in defence should be 20% + ebitda

• measures to reduce power cost

  • 30-40% of requirement is coming from 30 mw plant

  • agreement to get at 4rs per unit by signing 6 MW in up

• railways –

  • new notification of building FOB(foot over bridges)

  • getting into stainless steel FOBs

  • will get good portion of fabrication if LNT or any big players bag the contract

• revenue split with en user industries

  • infrastructure 60% many thing structure tubing , solar structure, railways. electrical towers , telephone towers

    • margins in railways and electrical line margin 9-10%

    • structure tube – 3-4%

  • forging 15% 12-15%

  • auto – 25% 12-15% , hydraulic tubes, precision tubes

• major defence business will come in fy26

• in bridges and railway business they get the material from 70% of their suppliers so the supplier fincance the WC

6. one time events

• fund raise of 200 crs via QIP

• red sea-

  • only 75% exports throgh red sea and out of this 70% is FOB value so not effected so effect is minimal

They did simulations (like running a computer program with data) which were inconclusive and now they wanted to run a real Proof of concept with real-world experiments, in deciding on the potential benefits of coupling, so they are now going to have software(which Grid India will develop in next 2 months) and all exchanges will share data with Grid India and the experiment will be carried out.
As per my understanding, the CERC and GOI seem adamant about implementing Market coupling and nothing has been shelved, Unless the real-world experiments yield results that are absolutely garbage.
This is not a question of if but when

though they have been saying the company is debt free, why are they paying almost rs 400cr interest per year? I have tried to understand their complicated scheme of arrangements, but not clear why isnt the debt reduced as they claim. And was the JK house built really out of company’s cash, and it is more like chairman’s and family residence? that really shows the governance in poor light…

Hi Sajal,

Thanks for sharing this. This document seems to suggest that the question of market coupling seems to be shelved for now. Is that truly what is means? I am bit confused since this document tells the simulations and tests are already done whereas there was this news couple of days ago about doing simulations for 4 months. Aren’t these 2 conflicting?

Can you please share the link of this document?

Thanks!

Yes. Case link has been given by @Ragnar_Danneskjold. But I am not sure how many days NCLT takes to approve after the meeting.