VMSTMT

VMS TMT Limited reported a strong Q4 FY26 with total revenue of INR241 crores and a full-year FY26 revenue of INR840 crores. EBITDA for Q4 stood at INR11.94 crores, contributing to an annual EBITDA of INR62.31 crores. The company's net profit for Q4 was INR2.29 crores, culminating in a full-year net profit of INR21 crores, reflecting consistent growth driven by operational efficiency and stable demand across core markets.

The company's billet manufacturing facility, a key strategic initiative, has significantly improved its cost structure. By procuring scrap at INR35,000 per ton instead of billets at INR42,000 per ton, and eliminating reheating costs of INR1,500-2,000 per ton, margins have improved by INR1,000-1,500 per ton. This integration benefit is expected to be sustained throughout FY27, contributing significantly to enhanced profitability.

VMS TMT is investing INR45-50 crores in a 15-megawatt captive solar power project. The commissioning of 12 MW is expected in June 2026, with the remaining 3 MW by August/September 2026. This project is projected to generate annual savings of approximately INR5 crores on the power bill, further reducing the cost of production and improving overall margins, with a payback period of five years.

The company is focused on deepening its presence within the Gujarat market, which offers substantial untapped potential with 4.5-5 lakh tons of TMT sold annually, against VMS TMT's current 15,000 tons per month. The distribution network, comprising 227+ dealers and 3 distributors, is being continuously expanded within Gujarat, supported by loyal dealers and efficient 24-hour logistics, including a fleet of 50 trucks.

Current capacity utilization for both TMT and billet manufacturing stands at 70-75% of installed capacity, indicating significant headroom for improvement. Management is focused on optimizing this utilization to drive further growth and profitability. The company holds existing environmental clearances for up to 3 lakh tons of TMT and billet production within its current premises, providing ample scope for future expansion without immediate greenfield investments.

The outlook for TMT demand in Gujarat and across India remains very positive, fueled by significant infrastructure development, including high-rise projects (e.g., permissions for 60-floor buildings) and government initiatives related to events like the 2030 Commonwealth Games and the 2036 Olympics bid. This robust demand environment is expected to be a key growth driver for the company, supporting its confidence in sustaining growth.

The company has strengthened its financial position by paying off a significant portion of its borrowings in the last year, which has resulted in savings on financial interest and improved return on equity and capital employed. This focus on internal accruals and cost optimization is expected to contribute to a stable long-term financial position and improving margins.