Any current/future new fundraising through debt or equity?

Vardhman Special Steels plans to finance the new greenfield plant (INR 2,000 crores capex) through a mix of equity and debt. The company has already engaged with at least 3 banks that have expressed support for loans related to this project. Equity issuance is expected in due course as part of the funding strategy. The company's partners at some stage will increase their stake, which will serve as one source of funding. The promoter may also contribute equity if required. If additional funds are needed, the company may consider a Qualified Institutional Placement (QIP) as another funding optio

Any current/future capex/capital investment/strategic investment?

Completing reheating furnace capex (~INR 55-60 crores) by December FY'26 to reach 250,000 tons rolling mill capacity; no major further capex on existing plant after this. Left-out capex for FY'26 and FY'27 including rolling mill equipment, non-destructive testing line, R&D equipment, environmental expenses totaling INR 175 crores. Planned greenfield plant investment of about INR 2,000 crores in Punjab targeted to start production by FY'29-30, featuring green steel and solar power for a lower carbon footprint. Greenfield plant funded through a mix of equity and debt, with partners expected to i

Future growth expectations in sales/revenue/volumes?

Targeting 225,000 tons sales volume in FY '26, a marginal increase limited by current rolling mill capacity. Bigger jump to 250,000 tons volume planned for FY '26-'27 as capacity expansions stabilize. New plant expected to start contributing from FY '28-'29 with potential to increase capacity and product size range. No new product launch but minor variations and chemistry changes expected to meet customer requirements. Export mix currently low (~5%), with no significant increase forecasted in near term. Expectation of good traction from Maruti Suzuki and Toyota post Aichi tie-up, with import s

Future growth expectations in earnings/operating earnings/profits/EPS?

FY '25 sales volume was 215,000 tons with EBITDA per ton around INR 8,200 within a target range of INR 7,000 to 10,000. For FY '26, production target is about 225,000 tons, with marginal capacity increase due to rolling mill limits. Significant capacity expansion planned for FY '26-'27 targeting 250,000 tons. New greenfield plant expected to start production in FY '28-'29, with capacity expansion up to 130 mm diameter steel (currently max 90 mm). EBITDA per ton for existing plant targeted to improve to INR 8,000 to 11,000 in FY '26-'27. New plant profitability expected to be comparable to exis

Current/ Expected Orderbook/ Pending Orders?

Vardhman Special Steels is currently in the development queue for new products, especially with foreign companies like Maruti Suzuki and Toyota, following their partnership with Aichi Steel. Orders from these customers are expected to start coming in from the next fiscal year. The company aims to capitalize on import substitution opportunities with these OEMs. No specific current order book size is disclosed in the call. The new greenfield plant's production is expected to start by FY'29-'30, suggesting the orderbook growth tied to that project will materialize later. The company is optimistic

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Vardhman Special Steels LtdQ1 FY25Industrial Products

Vardhman Special Steels Ltd Q1 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹279P/E: 22.2Market Cap: ₹2.7K CrSector: Industrial Products

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Targeting 225,000 tons sales volume in FY '26, a marginal increase limited by current rolling mill capacity.
→Bigger jump to 250,000 tons volume planned for FY '26-'27 as capacity expansions stabilize.
→New plant expected to start contributing from FY '28-'29 with potential to increase capacity and product size range.
→No new product launch but minor variations and chemistry changes expected to meet customer requirements.
→Export mix currently low (~5%), with no significant increase forecasted in near term.
→Expectation of good traction from Maruti Suzuki and Toyota post Aichi tie-up, with import substitution opportunities.
→Long-term domestic alloy steel market expected to grow from ~4 million tons to 10 million tons over 10 years, presenting growth opportunities.
→Cost-saving initiatives (e.g., solar power plant) to improve EBITDA, supporting revenue growth.

Margin guidance

Category 3

→FY '25 sales volume was 215,000 tons with EBITDA per ton around INR 8,200 within a target range of INR 7,000 to 10,000.
→For FY '26, production target is about 225,000 tons, with marginal capacity increase due to rolling mill limits.
→Significant capacity expansion planned for FY '26-'27 targeting 250,000 tons.
→New greenfield plant expected to start production in FY '28-'29, with capacity expansion up to 130 mm diameter steel (currently max 90 mm).
→EBITDA per ton for existing plant targeted to improve to INR 8,000 to 11,000 in FY '26-'27.
→New plant profitability expected to be comparable to existing plant at full capacity.
→Cost savings from solar power plant (commissioned in FY '25) will enhance EBITDA.
→Outsourcing to reduce significantly by '26-'27, improving EBITDA per kg.
→Export growth forecasts revised down; focus remains on domestic automotive OEMs.
→Overall, moderate volume growth and improved efficiency expected to drive better earnings over the next 2-3 years.

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Fundraise plans

Yes

→Vardhman Special Steels plans to finance the new greenfield plant (INR 2,000 crores capex) through a mix of equity and debt.
→The company has already engaged with at least 3 banks that have expressed support for loans related to this project.
→Equity issuance is expected in due course as part of the funding strategy.
→The company's partners at some stage will increase their stake, which will serve as one source of funding.
→The promoter may also contribute equity if required.
→If additional funds are needed, the company may consider a Qualified Institutional Placement (QIP) as another funding option.
→No specific timeline given for the equity issuance or debt drawdown, but land purchase and project approvals are expected in the next 2-3 months.

Order book

→Vardhman Special Steels is currently in the development queue for new products, especially with foreign companies like Maruti Suzuki and Toyota, following their partnership with Aichi Steel.
→Orders from these customers are expected to start coming in from the next fiscal year.
→The company aims to capitalize on import substitution opportunities with these OEMs.
→No specific current order book size is disclosed in the call.
→The new greenfield plant's production is expected to start by FY'29-'30, suggesting the orderbook growth tied to that project will materialize later.
→The company is optimistic about expanding business and increasing orders over time, though precise pending orders data is not provided.

Capex plans

Yes

→Completing reheating furnace capex (~INR 55-60 crores) by December FY'26 to reach 250,000 tons rolling mill capacity; no major further capex on existing plant after this.
→Left-out capex for FY'26 and FY'27 including rolling mill equipment, non-destructive testing line, R&D equipment, environmental expenses totaling INR 175 crores.
→Planned greenfield plant investment of about INR 2,000 crores in Punjab targeted to start production by FY'29-30, featuring green steel and solar power for a lower carbon footprint.
→Greenfield plant funded through a mix of equity and debt, with partners expected to increase stake; land purchase completion expected in next 2-3 months.
→Implementation of Kocks block at existing plant to improve quality, reduce inventory, and increase rolling mill capacity.
→Solar power plant commissioning planned for current year to cover 40-45% of power demand, aiding cost savings.

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