According to ibm.gov, India’s Ferro & Silica Manganese sector is a vital component of the steel industry, with production reaching 3.5 million tonnes in FY ’24. The market for silico manganese surged from $680 million in 2020-21 to $1.47 billion in 2022-23, reflecting significant growth despite recent challenges.
With a market capitalization of Rs 5,001.28 crore, the shares of Indian Metals & Ferro Alloys Ltd were trading at Rs 926.95 per share, decreasing around 0.22 percent as compared to the previous closing price of Rs 928.95 apiece.
Matter Explanation
As of December 2024, a prominent ace investor Dolly Khanna has bought fresh 6,23,464 equity shares which is equivalent to 1.16 percent of the company. Moreover, Mukul Agrawal also holds 5,99,329 equity shares, representing 1.11 percent of the company.
Financial performance
Analyzing a company’s financial performance, revenue decreased by 0.1 percent from Rs 693 crore in Q2FY24 to Rs 692 crore in Q2FY25, during the same time frame, the company’s net profit increased significantly by 40 percent from Rs 89 crore to Rs 125 crore.
In Q2 FY25, production cost was ₹69,600/ton, with EBITDA at ₹176 crores and a margin of 25.38%. Key cost variables included power at ₹3.85/unit and coke at ₹16,545.
Operational Insights
IMFA is a leading integrated Ferro Chrome manufacturer in India, relying on in-house chrome ore and power production. As one of the top exporters, its diverse operations include chrome ore mining, electricity generation, and Ferroalloy smelting. With a capacity of 284,000 tons, it produces 65,000 tons per quarter.
Market Outlook
Management expects stable demand and pricing in the coming quarters, supporting steady performance. The company is optimistic about maintaining margins over the next two quarters but remains cautious about long-term predictions due to market uncertainties.
Expansion Plans
IMFA plans a 40% production capacity expansion, adding 100,000 tons by FY26 in phase one and another 100,000 tons via underground mining by FY28-29. A ₹2,000 crore CAPEX over 6-7 years will fund new furnaces and mining operations to drive growth.
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Ethanol Project
IMFA is entering ethanol production with an initial 120 KLD capacity, aiming for ₹300 crores in sales. The ₹140 crores CAPEX project has a 6-year payback period, with plans for capacity expansion based on performance, offering the potential for substantial future revenue growth.
Management comments
Management remains confident in the company’s resilience, focusing on sustainable growth and operational efficiency. Key strategies include expanding the liquid detergent segment, reclaiming dishwashing market share, addressing PFAD cost pressures, and enhancing liquid adoption in household insecticides.
Company Overview
Indian Metals and Ferro Alloys Limited is a producer of ferro chrome in India. It operates through three segments: Ferro Alloys, Power, and Mining. The Company has established two captive mines, located in Sukinda and Mahagiri in Jajpur, Odisha.
Written by Abhishek Singh
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