Detailed Narrative
Performance Highlights for H2 & FY25
Jay Bee Laminations reported a significant increase in total production volume for FY25, reaching 12,400 metric tons, which is a 32% year-on-year growth compared to FY24. The company's revenue also saw a healthy increase of 21% year-on-year, totaling ₹368 crores for the full fiscal year. The average realization for FY25 was ₹296 per kg. However, H2 experienced a considerable decrease in gross and EBITDA margins due to raw material price fluctuations and the consumption of higher-priced inventory.
Capacity Expansion and Utilization
The brownfield expansion of Unit II was completed in October 2024, contributing to an overall capacity utilization of approximately 75%. The company has also conceived Unit III, which is expected to start commercial operations in May 2025 with an initial capacity of 1,200 metric tons. With further optimization in Unit II, the total installed capacity is projected to reach 23,340 metric tons within FY26, up from the current 18,060 metric tons.
Strategic Initiatives and Future Growth
Jay Bee Laminations is actively pursuing higher-value segments, having secured PGCIL approval for 400 kV class in March 2025. Orders worth ₹17 crores have been received for PGCIL, with another ₹15 crores under negotiation. The company aims to achieve NABL accreditation for its CRGO testing lab by H1 FY26 to reduce reliance on third-party testing. Unit III will focus on moving up the value chain by producing core coil assemblies and special transformers for export customers, targeting ₹3-4 crores in FY26 and ₹40-50 crores in FY27 from this segment.
Margin Dynamics and Raw Material Volatility
The company faced significant margin pressure in H2 FY25, primarily due to volatility in CRGO raw material prices. An inventory of ₹90 crores, purchased at higher prices in H1, was consumed in H2, coinciding with a market correction where prices dropped from ₹255/kg to ₹230-235/kg. This necessitated passing on lower selling prices to customers. Despite these challenges, management reiterated a long-term EBITDA margin guidance of 12-13% on a full-year basis, aiming to stabilize margins through better inventory management.
Order Book and Approvals Pipeline
The company has received orders worth ₹17 crores for PGCIL's 400 kV class and has an additional ₹15 crores in orders under negotiation. For FY26, the target for 400 kV class orders is ₹100 crores. Management is also eyeing further approvals from NTPC and Torrent Power, and an upgrade to PGCIL 765 kV class, which will be pursued after establishing a strong track record in the 400 kV segment. The current monthly run rate is about 1,300-1,350 metric tons, with a target to reach 1,500 tons.