- JTL Industries is a growing company with three decades of industry experience.
- They have four plants with a total capacity of 6 lakh tonnes.
- In Q2 FY24, they achieved a 56% growth in sales volume compared to Q2 FY23 and 55% growth in H1 FY24 compared to H1 FY23.
- Value-added products (VAP) now make up 40% of their sales, with a target of 50% by FY25.
- Revenue increased by 37% in Q2 FY24 and 38% in H1 FY24.
- EBITDA grew by 16.3% in Q2 FY24 and 53% in H1 FY24, despite some margin pressure due to volatile steel prices in Q2.
- They reduced their working capital cycle from 71 days in FY23 to 57 days in H1 FY24.
- Inventory holding period was reduced from 45 days in FY23 to 28 days in H1 FY24.
- EBITDA per ton remained around Rs. 4,600 in H1 FY24 despite fluctuations in steel prices.
- They expect strong demand for structural steel in the coming years due to infrastructure projects.
- Plans to reach a total manufacturing capacity of 1 million tonnes by adding capacity in Maharashtra and Chhattisgarh.
- Raised Rs. 384 crores through fully convertible warrants to fund expansion.
- Aiming to increase international sales from 9% to around 15%.
- Future growth plans include increasing dealer distribution, adopting DFT technology, and expanding product offerings.
- Anticipating a 30-35% increase in volumes for the full year.
- EBITDA per ton is expected to be in the range of Rs. 4,800 to Rs. 5,300 for the full year.
- No demand slowdown is expected in the second half.
- Anticipating increased demand as infrastructure projects progress.
- Working on increasing VAP share with the introduction of DFT technology.
- Short-term borrowings have increased in line with higher working capital requirements.
- Plans for long-term growth beyond 1 million tonnes are in the pipeline, with a focus on organic expansion.
- JTL Industries doesn't foresee any gap in demand; demand is exceeding supply.
- They plan to ramp up capacities organically to meet the high demand.
- The demand for ERW steel pipes is strong in India due to various usages and infrastructure development.
- They are part of the growth story of India, driven by initiatives like the Jal Jeevan Mission.
- EBITDA per tonne has remained stable despite varying revenue due to fluctuating realization per tonne.
- They focus on maintaining a healthy EBITDA margin and intend to continue doing so in a volatile market.
- JTL is implementing cost-saving initiatives, including greener processes and lean manufacturing.
- They hold 8-9% market share in the industry, aiming to double it after expansion.
- The government projects constitute around 24% of their sales.
- JTL is investing in DFT technology to increase capacity utilization and expand its range of value-added products.
- The expansion CAPEX is approximately Rs. 320 crores, with Rs. 70 crores already invested.
- Capacity utilization is currently around 60%, and they aim to reach 65% for the full year.
- The new DFT technology will contribute to capacity utilization and EBITDA after it's fully operational.
- They primarily focus on ex-works sales, resulting in minimal freight costs of around Rs. 300-400 per tonne.
- Sales per tonne for FY24 may see some increase, but it's hard to predict exact numbers.
- The 4 lakh-tonne expansion will be fully operational by the end of FY25, with the first 2 lakh tonnes coming online in the first quarter.
- The expanded capacity is expected to yield higher sales and EBITDA per tonne, especially with a growing share of value-added products.