Indian Metals

IMFA demonstrated resilience in Q4 FY25 amidst a challenging global ferrochrome market. The company's EBITDA cost per metric ton was INR 76,980, reflecting a slight reduction from Q3 FY25's INR 77,800. Key cost components included met coke at INR 15,150 per metric ton and chrome ore at INR 7,500 per ton. Power variable cost for the quarter was INR 4.09. The net ferrochrome realization for Q4 FY25 was INR 87,021, a decrease from INR 96,943 in the December quarter and INR 101,771 in Q4 FY24, indicating pricing pressure.

The 96,000 metric ton per annum Greenfield ferrochrome expansion project in Kalinganagar has commenced, with orders placed for civil, structural works, major furnace equipment, and power transformers. The first furnace is scheduled for commissioning in June 2026, followed by the second in September 2026. The total capital expenditure for this project is now estimated at INR 840 crores at base level, potentially reaching INR 900 crores including capitalizable trial run expenses, an increase from earlier estimates of INR 650-700 crores due to equipment quality and cost escalation over 2.5-3 years.

IMFA has significantly advanced its renewable energy strategy by signing power purchase agreements for 110 MW of hybrid renewable power. This includes 70 MW with JSW Green Energy Group and 40 MW with Ampin Energy Utility One Private Limited. Both agreements are for 25 years, with commissioning expected by June 2026. The tariffs are competitive, with JSW at INR 3.84 per unit and Ampin at INR 3.75 per unit, aiming to enhance energy security and reduce the company's carbon footprint.

The company's chrome ore raising reached a record 7 lakh metric tons in FY25. IMFA is strategically building up chrome ore inventory in anticipation of the Kalinganagar project, currently holding over 4 months of inventory at plant sites and 2.5 months at mines. The plan is to increase ore production to 8.25 lakh tons and eventually reach 1.2 million tons by FY31. The Sukinda underground mines expansion is on track, with major contracts awarded for decline, ventilation shafts, and main shaft works.

For the full fiscal year FY25, IMFA reported a PAT of INR 378 crores and generated INR 430 crores in free cash flow before dividend payout. The company maintained a healthy net cash balance of approximately INR 535 crores (after INR 372 crores in working capital borrowings). Management anticipates a more stable FY26 with early signs of pricing recovery, particularly from April onwards. They expect Q1 FY26 ferrochrome realization to improve to INR 92,000-93,000 per metric ton, despite a 1.5-2 month lag in price realization.

The scheme of amalgamation of Utkal Coal Limited with IMFA was approved by the Regional Director, Eastern Region, with an appointed date of March 28, 2025. Financial entries for this merger have been passed in Q4 FY25. Additionally, the 120 KLD ethanol project is progressing, with necessary statutory clearances received and all major equipment orders placed. The boundary wall for the project has been completed, and the total project cost is estimated at INR 150 crores.