The shares of this firm which falls under the sector of steel saw its share price climb by 4.5 percent to an Intraday high of Rs 1,094 apiece from its previous close after it received permission from the Chattisgarh Environment Conservation Board to establish a 2 million ton pellet plant for the expansion of Iron ore production capacity.
Share price movement:
With the market capitalization of Godawari Power & Ispat Limited standing at Rs 14,362.59 crores, the shares were trading around 2 percent higher around Rs 1,070 levels around 1.30 pm on Monday’s session. The stocks have generated a return of 86 percent over the past year and 43 percent over the past 6 months.
What happened:
As per the BSE exchange filings published by Godawari Power & Ispat Limited the firm has received official permission from the Chattisgarh Environment Conservation Board to build a new pellet plant in Raipur. This plant will increase Godawari Limited’s iron ore pellet production capacity from 2.7 million tons per year (MTPA) to 4.7 million MTPA and will also include facilities for grinding ore, improving ore quality, and coal processing.
The filings also mention that the pellet plant will be financed using the company’s own funds and it is expected to start operations by Q1FY26.
Financials:
Examining the financials of Godawari Power & Ispat Limited the sales made by the firm declined by 5 percent from Rs 5,745 crores in FY23 to Rs 5,455 crores in FY24. For the same period, the net profits generated by the firm increased by 18 percent from Rs 793 crores to Rs 936 crores.
Ratios:
As for the return ratios generated by Godawari Limited as of FY24, the return on equity and the return on capital employed stood at 20.80 percent and 26.76 percent respectively. Also for the same period, the net profit margin of the firm stood at 16.90 percent.
Future Capex plans:
Godawari Power & Ispat Limited’s future capital expenditure includes several key projects. The company plans to build an integrated steel plant, anticipated to be completed within 36 months of receiving environmental approval. Additionally, a crushing and beneficiation project is expected to be finished within 15 months of its environmental clearance. Furthermore, a new mining project will expand the existing capacity from 2.35 million MT to a total capacity of 6.00 MT, pending the receipt of environmental clearance.
FY25 Volume guidance:
For the fiscal year 2025 (FY25), the company has provided its volume guidance production targets as follows: 3.0 million MT of iron ore mining, 2.44 million MT of iron ore pellets, 0.594 million MT of sponge iron, 0.50 million MT of steel billets, 0.08 million MT of ferroalloys, and 0.325 million MT of rolled products.
Asset portfolio:
Godawari Limited boasts a large portfolio of long-life assets which include The Siltara Integrated plant in Chattisgarh, The Pelletisation plant in Odisha, The solar power plant in Bemetara, The Ari Dongri Iron ore captive mine in Chhattisgarh, etc.
Production capacity:
Godawari Power & Ispat Limited saw a 20 percent increase in sponge iron production, rising from 494,991 MT in FY23 to 593,991 MT in FY24. However, during the same period, the production capacity for iron ore mining and iron ore pellets decreased. Iron ore mining capacity fell by 11 percent from 2,595,953 MT in FY23 to 2,307,075 MT in FY24, while iron ore pellets capacity declined by 7 percent from 2,616,500 MT to 2,438,950 MT.
Utilization capacity:
As of FY24 the utilization capacity of Iron ore minings, Iron ore Pellets, and Sponge Iron stood at 76 percent, 90 percent, and 99.99 percent respectively.
Shareholding Pattern:
As of June 2024, the promoters and the public held 63.26 percent and 27.27 percent of Godawari’s stakes respectively. Also, the foreign institutional investors held 7.50 percent of the firm while the domestic institutional investors held 1.96 percent stakes in Godawari Limited.
About the Company:
Incorporated in 1999 and Headquartered in Raipur, Godawari Power & Ispat Limited is mainly engaged in the business of Mining Iron Ore and Manufacturing Iron Ore Pellets, Sponge Iron, Steel Billets, Wire Rods, H.B. Wire and Ferro Alloys with generation of Electricity.
Written By Zahal
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