Manaksia Coated Metals & Industries Ltd

- The company is currently looking to raise equity for CAPEX needs. - The expected equity dilution post-money is around 14% to 15%. - Long-term CAPEX investments will be primarily funded through equity, not debt. - For working capital, the company will utilize existing banking facilities with minimal additional debt. - The company does not intend to increase long-term debt and aims to improve its debt-to-equity ratio with the equity raise. - The total CAPEX planned for FY25 and FY26 is about Rs. 90 crore, with further CAPEX planned for FY27-28 for backward and horizontal integration. - The company aims to keep leverage under control and prefers equity financing for growth. This strategy indicates a preference for equity fundraising rather than increasing debt to fuel expansion.

- Current FY25-FY26 CAPEX: Rs. 90 crore split approximately 50-50 between these two fiscal years. - Breakdown: Rs. 40 crore for Aluzinc project (capacity enhancement and upgrade from galvanized steel to Aluzinc) and Rs. 50 crore for second pre-painted steel line. - Aluzinc commissioning expected by February 2025 with full capacity utilization targeted from FY26. - Future CAPEX planned beyond FY26 for growth to 3 lakh tons capacity from current 1.32 lakh tons, including backward and horizontal integration, expected in FY27-28. - Additional CAPEX after FY26 includes cold-rolling complex for raw material optimization, Inventory reduction, and potential further capacity expansions. - CAPEX to be primarily equity funded to avoid long-term debt increase. - Rs. 8-9 MW solar power plant planned for sustainable energy use, reducing power cost by up to 70%. Overall, phased and strategic investments aim at 3x production growth, improved ROCE, and margin expansion.

- The Company targets a topline growth of 10% to 15% minimum in the current fiscal year driven by a strong export order book of over Rs. 320 crore. - Volume growth is expected to be higher, with a 23.74% increase in volumes year-on-year in H1 FY25. - With the commissioning of the Aluzinc project by Q1 FY26, production capacity will increase from 1,30,000 tons to 1,80,000 tons, targeting 80% to 85% capacity utilization. - Sales volumes are expected to nearly double due to this capacity expansion, with significant revenue growth owing to higher-value Aluzinc products. - Incremental turnover from a Rs. 90 crore CAPEX planned for FY25 and FY26 is projected between Rs. 500 to Rs. 700 crore. - Longer term, the Company plans to grow capacity 3x to 3.5x over current levels by FY27-28, with further CAPEX planned beyond FY26. - Export growth will remain a key focus, supported by strong OEM relationships and the large European order signed in September 2024.

- The Company expects significant revenue growth driven by increased capacity and export orders, especially the Rs. 200 crore European contract effective from October 2024. - EBITDA margins are anticipated to expand by 40-50% due to the introduction of higher-margin Aluzinc products and operational efficiencies. - Net profit margins improved to 1.45% in H1 FY25, with a 150% YoY surge in net profit, expected to grow further with capacity utilization improvements. - ROCE is projected to rise from current 15-16% to low 20% post Phase-I CAPEX (FY25-FY26) of Rs. 90 crores. - After Phase-II (FY27-28), with cold-rolling complex and inventory reduction, ROCE could potentially exceed 30%. - EPS has already increased by 118% to Rs. 0.72 per share in H1 FY25 and is expected to grow substantially alongside profitability. - The Company plans to use equity to fund CAPEX, aiming to strengthen the balance sheet and reduce leverage, supporting sustainable profit growth.

- Current export order book stands at approximately Rs. 320 to Rs. 325 crore. - There are existing domestic orders worth around Rs. 200 crore. - Orders are primarily from long-term, repetitive OEM customers with relationships spanning 6 to 12 years. - Export customers include reputed European OEMs with strong credit ratings, supported by secured payment instruments such as letters of credit. - Domestic customers include Indian OEMs and multinational companies with manufacturing in India. - The Rs. 200 crore European order signed in late September 2024 kicks in from October 2024, with execution planned over 9 to 12 months. - This order contributes significantly to export sales growth in Q3 and Q4 of FY25.