Vardhman Special Steels Ltd

- Talks are ongoing with Aichi regarding an increase in their stake in Vardhman Special Steels Limited. - Timing for Aichi's stake increase is expected within the next 1 to 2 years, potentially linked to the announcement and progression of the new plant project. - With the new plant announcement and plans in next 1-2 years, promoter equity infusion is also expected to prevent excessive dilution of stakes. - The new plant capex will be funded partly through this equity infusion from promoters and likely increased stake by Aichi. - No specific mention was made of new debt fundraising during the call. - Management plans to finalize project contours and potentially announce the new plant and related fundraising details by April 2025.

- Ongoing capex of INR160-180 crores primarily related to rolling mill upgrades including Kocks Block and reheating furnace; to be capitalized in FY 2025-26. - Installation of a second Non-Destructive Testing (NDT) line starting FY 2025-26, commissioned in the following year to support high-quality and sophisticated product testing. - Environmental and furnace-related investments pending but relatively minor (less than INR 10 crores). - Solar power project: Vardhman holds 26% equity (~INR 19 crores) in the group captive solar plant, expected to be ready by March-April 2025, to reduce power costs. - New greenfield steel plant planned in Punjab (Ludhiana district), with land negotiations underway; major planning expected by April 2025 and announcement targeted at April Board meeting. - Discussions with Aichi regarding increased stake and equity infusion aligned with new plant capex. - Forging business expansion plans expected to materialize within 1-2 years. - Capex largely to end by FY 2025-26, after which only normal maintenance capex expected.

- Current year (FY '25) sales volume guidance: ~215,000 to 220,000 tons, on track despite shutdowns. - Next year (FY '26) volume expected around 225,000 to 230,000 tons, focusing on stabilization and consolidation. - By FY '27, volume target is approximately 245,000 to 250,000 tons. - Capacity expansion to 270,000 tons rolling capacity expected to support growth over next 3-4 years. - EBITDA per ton guidance: INR7,000 to INR10,000 for FY '25; INR8,000 to INR11,000 for FY '26 and '27. - New projects including Kocks Block and reheating furnace to enhance capacity and quality, final commissioning by FY '26. - New greenfield plant planned in Punjab with announcement expected by April, supporting longer-term growth. - Talks on forging business indicate potential diversification and additional growth avenues in 1-2 years.

- FY '25 Q4 EBITDA guidance: INR 7,000 to INR 10,000 per ton, maintaining previous range amid adverse market conditions. - FY '26 EBITDA guidance: Target INR 8,000 to INR 11,000 per ton, with confidence to hit this range by FY '26-'27. - Volume growth: Current capacity tested at 300,000 tons; planned to reach 270,000 tons of rolling capacity by end of FY '25-'26, enabling 3-4 years of growth runway. - Planned capacity expansion and stabilization expected to improve margins and earnings post FY '25. - New projects (Kocks Block, reheating furnace) to complete by FY '25-'26, enhancing quality and reducing costs. - Board expected to announce new plant project in Punjab by April 2025, possibly leading to further growth and equity infusion. - Power cost savings from solar plant expected to improve margins from FY '26 onward. - Strategic efforts in forging business could contribute to growth in next 1-2 years.

- Vardhman Special Steels Limited has secured an order win with a large Indian OE where the company will be a Tier 1 supplier, replacing Japanese steel imports. - Supplies to this OE are expected to start within a year. - There is progress in shifting some orders from imported steel (from Korea) to local supply, where VSSL acts as a Tier 2 supplier. - Expansion projects (Kocks Block and reheating furnace) are underway to enhance capacity, supporting current and future order fulfillment. - Discussions with European large OEs for potential new inquiries driven by low carbon credit demands are ongoing but still at a preliminary stage. - The company aims to announce a new project with clearer timelines in the April meeting, which may further impact future orderbook visibility.