The shares of this steel and iron manufacturing company rose nearly 2 percent following the announcement of ₹350 crore in capital expenditure plans and robust financial results.
Share Price Variation
In Tueday’s trading session, the share price of Jai Balaji Industries Ltd. reached an intra-day high of Rs.950 per share from its previous close of Rs.932.75 apiece. The stock gained nearly 2 percent in the session.
Rationale for the Rise
With a market capitalization of Rs.16,967 crores, the company reported total consolidated revenue from operations of Rs.1,718.31 crore for the quarter ending June 2024. This figure represents a 16 percent increase from Rs.1,482.56 crore in the same quarter of the previous year. However, there was a 7 percent decline from Rs.1,845.6 crore in Q4 FY24.
Profit After Tax (PAT) for Jai Balaji Industries Ltd. increased by 22.5 percent year-over-year, reaching Rs.208.82 crore in Q1 FY25, up from Rs.170.43 crore in the June 2024 quarter. Conversely, PAT decreased by 23.5 percent from Rs.272.98 crore in Q4 FY24.
Key Financial Ratios
The company reported strong financial ratios for the quarter ending June 2024. The Return on Capital Employed (ROCE) is 51.55 percent, and the Return on Equity (ROE) stands at 58.48 percent.
Additionally, the share price reflects an impressive Earnings Per Share (EPS) of 53.23 and an Operating Profit Margin of 15.29 percent.
Capacity Enhancement
Jai Balaji’s ongoing capital expenditure (Capex) plan of Rs.1,000 crores is expected to be completed in the next 12 months. Out of which Rs.605.2 crores have been already utilized from internal accruals. The production capacity for DI (Ductile Iron) Pipes is projected to increase by 120 percent, and the capacity for Ferro Alloys is expected to grow by 14 percent.
Jai Balaji Industries Ltd’s production capacities after the expansion are anticipated to be approximately 6,60,000 tons per annum (TPA) of DI Pipes, over 1,90,000 TPA of ferro alloys, around 7,50,000 TPA of Blast Furnaces, and more than 12,08,000 TPA of Sinter.
Management Guidance
The management’s guidance for FY25 projects a revenue growth of 25-30 percent and an EBITDA margin increase of 17-18 percent over the year. They anticipate capital expenditure will total Rs.350 crores by the end of the fiscal year.
Additionally, the capacity for DI Pipes is expected to surpass 4 lakh tons, reflecting significant expansion in production capabilities.
The management’s emphasis on products such as Ductile Iron Pipes and Specialized Ferro Alloys is expected to drive margin expansion and ensure sustainable profitability.
Shareholder Composition
As per the shareholding pattern of June 2024, the Promoters hold a 64.8 percent stake in the company, Foreign Institutional Investors (FII) hold a 2.9 percent stake, while Retail Investors and Domestic Institutional Investors (DII) hold a 32.2 percent and 0.1 percent stake in Jai Balaji Industries Ltd., respectively.
Company Overview
Jai Balaji Industries Limited is engaged in the business of manufacturing iron and steel products. The company’s products include sponge iron, pig iron, ductile iron pipe, ferro chrome, billet, thermo mechanically treated (TMT), coke, and sinter with a captive power plant.
It has eight integrated steel manufacturing units spread across India in the states of West Bengal, Chhattisgarh, Orissa, and Jharkhand and a diverse portfolio of value-added products
Written by – Siddesh S Raskar
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