Jai Balaji Industries LtdQ4 FY25Ferrous Metals

Jai Balaji Industries Ltd

Q4 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 1

Fundraise

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Revenue guidance

Category 2

→FY25: Full commissioning of expansion in DI pipes and ferroalloys expected.
→FY26: Revenue potential projected at Rs. 9,500 to 10,000 crores at current prices with 90-95% capacity utilization.
→DI pipes capacity to increase from 2.4 lakh tons to 6.6 lakh tons; target 90% utilization by FY26.
→Ferroalloy capacity expanding from 1.3 lakh tons to 1.9 lakh tons, expecting ~75% utilization in FY25.
→Focus on increasing exports: DI pipes exports to rise from 2% to 10% turnover in 24 months; ferroalloys exports from 40% toward 50% by year-end.
→Targeting sustainable EBITDA margins of 18-20% by FY26, driven by higher value-added products and operational efficiencies.
→Market growth expected at 13-15% CAGR, with historical growth exceeding 18-20% in some years.
→Large domestic demand fueled by schemes like Jal Jeevan Mission, AMRUT, and irrigation projects; expansion to African and Middle East export markets ongoing.

Category 1

→Jai Balaji Industries aims to expand DI pipes capacity by 175% to 6.6 lakh tons and ferroalloys by 46% to 1.9 lakh tons, targeting up to 90% utilization.
→Revenue for FY26 expected at ₹9,500-10,000 crore at current prices, assuming stable realizations.
→EBITDA margins projected to improve to 18%-20% by FY26, up from 15% in 9 months FY24, driven by higher value-added products and operational efficiencies.
→PAT for 9 months FY24 surged 756%; Q3 EBITDA rose 96% YoY, indicating robust profitability growth.
→Target to become net debt free within 18 months, strengthening financial health and supporting growth.
→Export contribution to ferroalloys expected to increase to 50% by year-end, enhancing margins.
→Ramp-up in capacity and improved product mix expected to drive quarter-on-quarter revenue growth, with a 20% QoQ increase anticipated in Q4 FY24.
→Cost-cutting and economies of scale expected to further support margin expansion.

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→Jai Balaji Industries Limited does not envisage raising any term loans or debt to finance its CAPEX plans.
→The planned capacity expansions will be funded entirely through internal accruals.
→The company aims to become net debt free within the next 18 months.
→Current debt is around ₹560 crores with repayment terms of about 36 months on recent Tata Financial loans.
→Strong and improving EBITDA and cash flows support the company's ability to service debt and fund expansions internally.
→No mention of any planned equity fundraising in the presented information.

→Jai Balaji Industries Limited maintains order books for DI pipes and ferroalloys.
→The current DI pipe order book is approximately ₹1,800 to ₹2,000 crores.
→The ferroalloys order book stands at around ₹400 crores.
→There is strong demand with large orders in hand, especially in ferroalloys.
→Some production in ferroalloys was affected due to furnace maintenance, but supply is expected to improve in the upcoming quarters.

Yes

→Total expected CAPEX is around Rs. 1,000 crores (Rs. 10,000 million), fully funded through internal accruals.
→Rs. 380.8 crores has already been incurred; the balance will be spent over the next 18 months.
→DI Pipes capacity to increase from 2.4 lakh tons to 6.6 lakh tons in two phases (already enhanced to 3 lakh tons).
→Specialized ferroalloys capacity planned to increase to 1.9 lakh tons from 1.3 lakh tons, with 36,000 tons additional capacity commissioning by FY24 and remainder by FY25.
→Revamp of existing blast furnaces to increase hot metal capacity from 5 lakh tons to 7.5 lakh tons.
→Setting up of a 6 lakh ton iron ore beneficiation plant.
→Installation of a 35 tons BFG boiler.
→Capacity expansions expected to achieve ~90% utilization with margin improvements and higher EBITDA.

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