Synopsis:
Vardhman Special Steels is in focus after laying out a strong expansion plan for the next few years, which will strengthen the company’s presence in its industry.
The shares of one of the leading steel manufacturers are involved in the manufacturing of Billets, Steel bars & Rods and Bright Bars of various categories of special and alloy steels are in focus after laying out a strong guidance plan. In this article, we will dive more into the details.
With a market capitalization of Rs 2,839 crore, the shares of Vardhman Special Steels Ltd made a day high of Rs 299.95 per share, up by 2 percent from its previous day closing price of Rs 292.90 per share. Over the past five years, the stock has delivered a multibagger return of 705 percent, outperforming NIFTY 50’s return of 110 percent.
Guidance
The company has outlined its profit and production plans for the upcoming years. For FY26, it is looking at an EBITDA of Rs 7,000-10,000 per ton of production, i.e., the company will earn between Rs 7,000-10,000 as an operating profit from each ton of production. From the next financial year, the same is expected to be between Rs 8,000 and Rs 11,000 per ton, showing an increase in profitability gradually.
In FY27, the company plans to produce about 2.45 lakh tons of material. By FY28, it anticipates operating at full capacity of 2.7 lakh tons, and its EBITDA per ton will be in the range of Rs 8,000-12,000, either slightly higher or at the same level.
So, the company will have an EBITDA of at least Rs 216 crore if everything goes according to plan. And if the good performance continues, the earnings will be around Rs 300 crore, implying a substantial increase in the business and stronger profit margins in the future.
Q2 Highlights
Vardhman Special Steels has reported an operating revenue of Rs 432 crore in Q2 FY26, representing a 13 percent decline as compared to Rs 495 crore in Q2 FY25. Additionally, on a quarter-on-quarter basis, it declined slightly by 0.46 percent from Rs 434 crore.
Regarding its profitability, it reported a net profit of Rs 35 crore in Q2 FY26, which is a growth of 35 percent as compared to Rs 26 crore in Q2 FY25. Additionally, on a quarter-on-quarter basis, it grew by 75 percent from Rs 20 crore.
Vardhman Special Steels Limited (VSSL), part of the well-known Vardhman Group, is a leading manufacturer of special and alloy steels used mainly in the automotive industry. The company produces hot-rolled and bright bars through an electric arc furnace process using recycled scrap. It has a melting capacity of 2.5 lakh MTPA and a rolling capacity of 2 lakh MTPA, serving top global automakers like Toyota, Maruti Suzuki, Hyundai, and Ford.
Written by Satyajeet Mukherjee
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
