Q3 2024 Vardhman Special Steels Ltd Earnings Call Transcript
Key Points
- Vardhman Special Steels Ltd (BOM:534392) successfully completed planned shutdowns to enhance production capacity, adding two additional stands to the rolling mill, which will increase rolling production by 10,000 tons per annum.
- The company has made significant progress in its ESG initiatives, reducing its carbon footprint from 0.82 to 0.68 metric tons of CO2 per ton of steel, and has executed a power purchase agreement for a solar power plant.
- Collaboration with Aichi Steel is progressing well, with plans to increase exports to Aichi Forge in Southeast Asia to 13,000-15,000 tons next year.
- The company is on track to achieve its annual target of 200,000 tons of sales, with January sales aligning with the plan.
- Financial performance remains stable, with Q3 revenue and tonnage comparable to the previous year, and EBITDA per ton within the stated range of INR 8,900.
- Q3 sales were subdued due to shutdowns by automobile manufacturers and forging plants, resulting in a 6% decrease in sales tonnage.
- The company is lagging behind its nine-month sales target, having achieved only 142,000 tons out of the 200,000-ton annual target.
- EBITDA for Q3 appeared lower compared to the previous year due to the non-comparability of figures, including a GST refund and price reductions booked in different quarters.
- Export figures remain relatively low, with only 10% of sales attributed to exports in the last quarter, despite ongoing efforts to increase this percentage.
- The company faces challenges in obtaining approvals from new customers, such as Yamaha and Musashi, which are still in progress and may take additional time.
Ladies and gentlemen, good day, and welcome to Vardhman Special Steels Limited Q3- and nine-months FY24 earnings call. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Vatsal from Choice Equity Broking Private Limited. Please go ahead, sir.
Yes. Thank you, Tushar. Good morning, everyone. On behalf of Choice Equity Broking, welcome to the Q3- and nine-months FY24 post-results conference call of Vardhman Special Steels Limited. I also take this opportunity to welcome the senior management team.
On today's call, we have with us Mr. Rajendar Kumar Rewari, Executive Director; Ms. Soumya Jain, Executive Director; Mr. Sanjeev Singla, CFO. Kindly refer to the safe harbor statements on the second slide of the earnings presentation.
I will now invite the management for the opening remarks to be followed by Q&A session. Thank you, and over to you, sir.
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