JTL Industries Limited — Q3 FY25 earnings call

Call held 28 Jan 2025

Management summary

JTL Industries reported a mixed Q3 FY25, with total income of ₹453.5 crores and an EBITDA margin of 7.78%. Despite market challenges and price corrections, the company achieved a 14.3% YoY growth in 9M sales volume to 297,000 tonnes, driven by value-added products and doubled export volumes. Strategic initiatives like the Raipur plant expansion and the upcoming DFT line are expected to boost future capacity and margins, although the DFT commissioning was delayed to Q4.

Highlights

  • 9M FY25 Sales Volume reached 297,000 tonnes, a 14.3% YoY growth.

  • Value-added products contributed 21% to Q3 sales and 24% to 9M sales, aligning with higher margin strategy.

  • Export volumes doubled YoY, reaching 10% of total sales for 9M FY25.

  • Secured a ₹265 crore order for 36,000 metric tonnes of galvanized mild steel tubes for Jal Jeevan Mission.

  • Maintained a zero-debt position, with capex funded by internal accruals and recent capital raises.

Concerns

  • Q3 FY25 EBITDA margin at 7.78% and PAT margin at 5.5% reflect lower realizations due to market price correction.

  • Delay in DFT expansion from Q3 to Q4 FY25 impacted sales volume achievement for the quarter.

  • Subdued market demand and de-stocking activities led to price pressure and lower EBITDA per tonne (below ₹4,000).

Key financials

2 periods

Q3 FY25

  • Total Income
    ₹453.5 Cr
  • EBITDA
    ₹35.1 Cr
  • EBITDA Margin
    7.8%
  • PAT
    ₹24.9 Cr
  • PAT Margin
    5.5%
  • Sales Volume
    97,488 metric tonnes

9M FY25

  • Total Income
    ₹1,460.4 Cr
  • EBITDA
    ₹104.6 Cr
  • EBITDA Margin
    7.2%
  • PAT
    ₹82 Cr
  • PAT Margin
    5.6%
  • Sales Volume
    2,97,000 metric tonnes
    YoY +14.3%

What they filed

Q1 FY27: revenue up 6.3%, net profit up 81.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue480 452 466 504 371 −23%423 −6%500 +7%536 +6%
EBITDA30 35 17 21 29 −3%35 +0%39 +129%43 +105%
Net profit26 25 17 16 20 −23%26 +4%26 +53%29 +81%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

medium confidence

Inflow this quarter

₹265 Cr

The company secured a significant order for the Jal Jeevan Mission, highlighting its capability in value-added products for national infrastructure projects.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹300 Cr this quarter · ₹1,000 Cr (FY25) planned QIP and promoter preferential allotment, with internal accruals for working capital and capital needs.
    • Raipur plant expansion (doubled capacity to 2 lakh metric tonnes)
    • Mangaon DFT line installation (adding 2 lakh metric tonnes capacity)
    • Overall 1 million tonnes capacity expansion by FY25 end ₹1,000 Cr
    We are well equipped with the recent QIP and the promoter infusion that we have done for the expansion, the capital expansion that we have done and for the working capital that is needed. We might, going forward, only need certain working capital which our bankers are already behind us to take it forward. But, apart from that, there would be no long-term debts the Company intends to take. So, in the last decades, we have been debt-free. We intend to be debt-free for the next coming years as well. So, we are not taking any long-term debts, and we have a good cash position. We have a good internal accrual for financing our both, working capital needs and capital needs.
  • Debt Gross ₹0 Cr · Net ₹0 Cr · 0.0× EBITDA
    We are currently at zero debt position and going forward as well, we are well equipped with the recent QIP and the promoter infusion that we have done for the expansion, the capital expansion that we have done and for the working capital that is needed. We might, going forward, only need certain working capital which our bankers are already behind us to take it forward. But, apart from that, there would be no long-term debts the Company intends to take. So, in the last decades, we have been debt-free. We intend to be debt-free for the next coming years as well. So, we are not taking any long-term debts, and we have a good cash position.
  • M&A Nabha Steel Acquisition · Pending regulatory

    Solidified operational capabilities and market presence, emphasizing its role in growth strategy.

    Nabha Steel contributed 33,277 metric tonnes to our year-to-date volumes, emphasizing its role in our growth strategy. ... we have 67% share, we can only right now Nabha is a partnership firm. So, we are converting it into a subsidiary, and it will be a subsidiary ... our target is to get the consolidated accounts by the end of this year
  • Liquidity Cash ₹121 Cr The company has a good cash position and internal accruals to finance working capital and capital needs.
    We have a good cash position. We have a good internal accrual for financing our both, working capital needs and capital needs. ... current cash position is we have Rs. 121 crores at the moment

Guidance & targets

Sales Volume

  • Q4 FY25 Sales Volume Sales Volume · Q4 FY25 · High confidence 125,000 to 135,000 tonnes
    going forward, we are poised to achieve, say, 1,25,000 tonnes to 1,35,000 tonnes in the 4th Quarter and maintain the guidance, near to the guidance that we had given earlier at the starting of the year.

    — Dhruv Singla

  • FY25 Sales Volume (JTL + Nabha) Sales Volume · FY25 · High confidence 380,000 tonnes (JTL) + 20,000-25,000 tonnes (Nabha)
    keeping Nabha aside, we are targeting, say, another minimum lakh tonnes production in JTL and a level of about 380,000 tonnes would be what we will be achieving in JTL plus the Nabha volume of another 20,000 tonnes to 25,000 tonnes. So, a level of about 130,000 tonnes on a consolidated basis is our target in the next quarter.

    — Dhruv Singla

  • FY26 Sales Volume Sales Volume · FY26 · High confidence 5.5 lakh to 6 lakh tonnes
    So, we can achieve a higher sale on over that. So, it's easy to say that we will achieve sales over 5.5 lakhs tonnes, 6 lakhs tonnes in next year.

    — Pranav Singla

Capacity

  • Total Installed Capacity Capacity · End of FY25 · High confidence 1 million tonnes

    From 686,000 tonnes today

    by the end of this year, we will be reaching 1 million tonnes of capacity by the installation of DFT. At the starting of this year, we stood at 6,86,000 tonnes.

    — Dhruv Singla

  • Total Installed Capacity Capacity · End of FY27 · High confidence 2 million tonnes
    going forward, in the next two years, we will be up and running with the next million tonnes.

    — Dhruv Singla

Product Mix

  • Value-Added Products Contribution Product Mix · Next Financial Year (FY26) · High confidence 40% to 45%

    From 24% today

    We are at about 24% of value-added products with DFT, which is by inception only a value-added product. So, we are targeting about say 40% to 45% of value addition in the next financial year.

    — Dhruv Singla

  • Value-Added Products Contribution Product Mix · With 2 million tonnes capacity · Medium confidence 55% to 60%
    when we move towards 2 million tonnes of capacity with our other products, we will be targeting value added in a ratio of about 55% to 60%.

    — Dhruv Singla

Profitability

  • EBITDA per tonne Profitability · Next Financial Year (FY26) · High confidence ₹4,500, then 10-15% jump (₹4,950-₹5,175)

    From Below ₹4,000 today

    come back to normalcy levels of Rs. 4,500 and then 10% to 15% jump over that in the EBITDA per tonne is evident throughout the next year.

    — Pranav Singla

  • EBITDA Margin Profitability · Long-term · Medium confidence 7% to 8%
    Our target always remains to have a healthy EBITDA level of about 7% to 8%.

    — Dhruv Singla

  • EBITDA Margin (with DFT) Profitability · Post DFT commissioning · Medium confidence Close to getting to double digits

    From 7% to 8% today

    And with the coming of DFT, we are targeting it to be close to getting to double digits.

    — Dhruv Singla

Shareholding

  • Promoter Shareholding Shareholding · September 2025 · High confidence Close to 57%
    We will be touching close to 57%.

    — Pranav Singla

What to watch in Q4 FY25

DFT Commissioning & EBITDA Impact

Q4 FY25 / Next Financial Year (FY26)
Current Delayed to Q4 FY25, expected ₹200-250 uptick in EBITDA per tonne from current levels.
Target Commercial operation of DFT, realization of targeted EBITDA per tonne improvement.

Why it matters

DFT is a key strategic initiative for higher margins and value-added products, crucial for achieving profitability targets.

the CAPEX that was planned, the DFT which is planned to start in Quarter 3 got pushed to Quarter 4. ... we will be 20% of our capacity in DFT, it will be easier to say that a Rs. 200 to Rs. 250 upticks in the EBITDA level is achievable from there.

Risks & concerns

  • Market Challenges & Price Correction

    medium

    Subdued market demand, price corrections in HR coils (from ₹52-53k to ₹46k), and de-stocking activities impacted realizations and EBITDA per tonne in Q3 FY25.

    Management acknowledged

  • Delay in DFT Commissioning

    low

    The Direct Forming Technology (DFT) expansion, initially planned for Q3 FY25, was pushed to Q4 FY25, impacting Q3 sales volume.

    Management acknowledged

Q&A highlights

7 direct
Q4 Sales Volume Guidance Direct
what Pranav was continuing to say is that since our DFT expansion got delayed a little, and we were supposed to start in the third quarter but it delayed further to the 4th Quarter and will be soon starting it. Yes, its correct to say that our 4th Quarter run rate shall be a little higher than the third quarter. We've been maintaining a steady rate of about, say, 1 lakh tonne of volume per quarter. And going forward, we are poised to achieve, say, 1,25,000 tonnes to 1,35,000 tonnes in the 4th Quarter and maintain the guidance, near to the guidance that we had given earlier at the starting of the year.

Clarifies the impact of DFT delay on Q3 volumes and provides specific Q4 volume targets to meet annual guidance.

Asked by Aditya Walekar

Nabha Steel Financial Reporting Partial
Yes. Right now, Aditya ji, we have only shown the quantity inclusive of Nabha Steel, but there is no revenue that is showed in JTL of Nabha. ... As a profit share, we have a 67% holding in Nabha. So, we have the other income showed in the income, it is shown in other income.

Explains how Nabha Steel's contribution is currently reflected in financials (volumes included, profit in other income) before full consolidation.

Asked by Aditya Walekar

Capacity Expansion Plans Direct
by the end of this year, we will be reaching 1 million tonnes of capacity by the installation of DFT. At the starting of this year, we stood at 6,86,000 tonnes. In the third quarter, we went live with 1 lakh tonnes of production in our Raipur plant. And the 14,000 tonnes balance in Mandi Gobindgarh will also come by this end year. So, and another 2 lakh tonnes will come by the DFT line in Mangaon. So, we will be at 1 million tonnes of installed capacity at the end of this financial year. Going forward, in the next two years, we will be up and running with the next million tonnes.

Provides a detailed roadmap for capacity expansion, including specific timelines and locations for reaching 1 million and 2 million tonnes.

Asked by Aditya Walekar

Steel Pricing and Infrastructure Outlook Direct
the Q4, we have seen a considerable step from the government regarding the safeguard duty, which, when implemented, we are awaiting the decision in the budget or soon after. When implemented, we shall see a considerable rise in the prices of steel, so to say, which will entail that the cheap incoming material will not be available to the Indian market. ... we are riding on the horse of the growth story of India, and we are very poised for the development, and going forward also, we are very optimistic about the growth of the Indian infrastructure.

Highlights potential positive impact of safeguard duties on steel prices and expresses optimism about government-led infrastructure spending.

Asked by Aman Soni

Value-Added Product Mix and EBITDA Improvement Direct
We are at about 24% of value-added products with DFT, which is by inception only a value-added product. So, we are targeting about say 40% to 45% of value addition in the next financial year. As our KT offering and for when we move towards 2 million tonnes of capacity with our other products, we will be targeting value added in a ratio of about 55% to 60%. So, that is what our long-term targets and short-term targets are for the value addition.

Details the company's strategy to increase value-added product contribution and its expected positive impact on profitability and EBITDA per tonne.

Asked by Vikas Singh

Cash Position and Debt Strategy Direct
We are currently at zero debt position and going forward as well, we are well equipped with the recent QIP and the promoter infusion that we have done for the expansion, the capital expansion that we have done and for the working capital that is needed. ... We intend to be debt-free for the next coming years as well. So, we are not taking any long-term debts, and we have a good cash position. We have a good internal accrual for financing our both, working capital needs and capital needs.

Reassures investors about the company's strong financial health, zero-debt policy, and self-funding capabilities for future growth.

Asked by Vikas Singh

Nabha Steel Subsidiary Conversion Direct
We are in process of merging it. We shall be completing the merger. It would not be a merger, so to say, so since we have 67% share, we can only right now Nabha is a partnership firm. So, we are converting it into a subsidiary, and it will be a subsidiary ... our target is to get the consolidated accounts by the end of this year and portray them in the financial results of the Company by the end of the year.

Clarifies the process and timeline for integrating Nabha Steel into JTL Industries' consolidated financials.

Asked by Vikas Singh

Capacity Utilization and SKU Variety Direct
Pankaj ji, the optimal utilization in our industry is about 60% to 65% of the machine capacity. How it is devised is that a machine can produce a range of products, but the machine capacity is rated on a basis of a mean size and a mean thickness. But to offer our products in the market, we have to produce a number of SKUs, without which we are not able to just produce one SKU and just serve that within the market. That is the reason the production change time, the size change time, the downtime, the lower capacity utilization hits in that manner.

Explains the industry-specific reasons for optimal capacity utilization being 60-65%, attributing it to product variety and changeover times rather than lack of demand.

Asked by Pankaj

3 min read 7 chapters

Detailed narrative

Q3 FY25 Performance Overview

JTL Industries reported a total income of ₹453.5 crores for Q3 FY25, with an EBITDA of ₹35.1 crores, translating to an EBITDA margin of 7.78%. Profit after tax stood at ₹24.9 crores, achieving a PAT margin of 5.5%. For the nine months of FY25, total income was ₹1,460.4 crores, with EBITDA at ₹104.6 crores (7.24% margin) and PAT at ₹82 crores (5.61% margin).

Sales Volume and Product Mix Strategy

The company achieved a sales volume of 97,488 metric tons in Q3 FY25. For the nine-month period, sales volume reached 297,000 tonnes, marking a 14.3% year-on-year growth. Value-added products contributed 21% to the Q3 sales mix and 24% to the nine-month sales mix, aligning with the strategy for higher-margin offerings. Export volumes doubled year-on-year, accounting for 10% of total sales for the nine-month period.

Strategic Capacity Expansion and DFT Implementation

JTL Industries is on track to achieve 1 million tonnes of capacity by the end of FY25 with the installation of the Direct Forming Technology (DFT) line. The Raipur facility's capacity has already doubled to 2 lakh metric tonnes per annum, with 50% dedicated to value-added products. The DFT line at Mangaon, delayed to Q4 FY25, will add another 2 lakh tonnes and is crucial for producing square and rectangular sections from HR coils, enhancing product range and export opportunities. A further 1 million tonnes expansion is planned by FY27.

Future Growth and Profitability Targets

The company aims to significantly increase the contribution of value-added products to 40-45% in the next financial year and 55-60% once the 2 million tonnes capacity is fully operational. This shift is expected to significantly improve EBITDA per tonne, with management targeting a return to ₹4,500 and then a 10-15% increase for FY26, aiming for double-digit EBITDA margins with DFT.

Financial Health and Funding for Growth

JTL Industries maintains a zero-debt position, relying on internal accruals and recent capital raises for its expansion plans. The company raised ₹300 crores through a QIP and ₹675 crores via preferential warrants, totaling ₹1,000 crores for its 1 million tonne capacity expansion. Approximately ₹300 crores has been spent on CAPEX, with the remaining funds from the preferential allotment expected by September 2025. The current cash position stands at ₹121 crores.

Market Outlook and Challenges

Management expressed optimism about demand for structural steel driven by infrastructure investments, anticipating a potential rise in steel prices due to safeguard duties. Despite market challenges, including price corrections in HR coils and de-stocking that impacted EBITDA per tonne (below ₹4,000) in the current year, the company expects stability and growth, particularly with new government projects and a favorable policy environment.

Nabha Steel Integration and Consolidation

JTL Industries is in the process of converting Nabha Steel, in which it holds a 67% share, from a partnership firm into a subsidiary. The company aims to consolidate Nabha's accounts into JTL's financial results by the end of the current financial year. This integration is expected to further solidify JTL's operational capabilities and market presence.

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