Bajaj Steel Inds - Bajaj Steel Inds

📊 BSE: 507944 🏢 Industrial Products 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

The Cotton Processing Machinery division is the primary driver, with revenue growing 136% from INR 163 Cr in FY22 to INR 385 Cr in FY25. In Q2 FY26, Cotton Processing Machinery grew 12% YoY, while other segments (Infrastructure, Electrical Panels, Heavy Engineering) recorded a combined growth of 20% YoY. Total consolidated revenue for FY25 reached INR 585 Cr, a 6.17% increase from INR 551 Cr in FY24.

Geographic Revenue Split

Exports now contribute over 50% of total revenue as of FY25, a significant increase from 14% in FY2016. The company operates in over 60 countries, with four wholly owned foreign subsidiaries in the USA, Uganda, and two newly incorporated entities in Brazil (Bajaj Continental LTDA and Bajaj Services LTDA) to target the Latin American market.

Profitability Margins

Net Profit Margin improved significantly to 14.42% in FY25 from 10.70% in FY24. On a standalone basis, Net Profit Margin rose from 9.34% to 13.97% YoY. Q2 FY26 PAT margin stood at 12.1%, up 75 bps from 11.3% in Q2 FY25, driven by a higher mix of high-margin export orders.

EBITDA Margin

EBITDA margin for FY25 was 15.7% (INR 92 Cr), up from 15.5% in FY24. In Q2 FY26, the EBITDA margin improved to 18.2%, a 158 bps increase YoY, reflecting better operational efficiency and a shift toward higher-value engineering products.

Capital Expenditure

The company has planned a capital expenditure of approximately INR 300 Cr over the next 2-3 years. This investment is intended to triple the revenue capacity of the Infrastructure Division and expand manpower and machinery across the Heavy Engineering and Electrical Panel verticals.

Credit Rating & Borrowing

CRISIL reaffirmed ratings at 'CRISIL A/Stable/CRISIL A1' in May 2025. The company maintains a strong financial profile with an interest coverage ratio of 24.96x in FY25 and a low adjusted debt-to-networth ratio of 0.16x. Total term debt was limited to approximately INR 23 Cr as of March 31, 2025.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include steel plates, structural steel, and electrical components for panels. While specific percentage breakdowns per material are not disclosed, raw material costs (Cost of Goods Sold) represented 47.4% of total revenue in H1 FY26 (INR 133.8 Cr out of INR 282.2 Cr).

Import Sources

Not explicitly disclosed in the provided documents, though the company operates 14 manufacturing units in Nagpur, Maharashtra, suggesting heavy domestic sourcing for steel and components.

Capacity Expansion

The Infrastructure Division is undergoing expansion to triple its revenue potential. The company is also aggressively expanding manpower and land parcels for its Heavy Engineering Division to meet growing international demand for custom-machined components.

Raw Material Costs

Cost of Goods Sold for FY25 was approximately INR 280 Cr. In Q2 FY26, COGS was INR 82.9 Cr, representing 47.5% of revenue. Procurement strategies focus on managing volatility in steel prices to protect the 15-17% EBITDA margins in the machinery division.

Manufacturing Efficiency

The company utilizes advanced technologies including Single Roller, Double Roller, Saw-Ginning, and Roto-Bar ginning. Its machines can process up to 200 bales per hour, which is cited as the highest capacity globally.

Logistics & Distribution

Logistics costs are a significant factor for the export business (>50% of revenue). Recent geopolitical tensions in the Red Sea have led to increased freight expenses, necessitating strategic adjustments in shipping and pricing.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth will be achieved through a three-pronged strategy: 1) Tripling capacity in the Infrastructure (PEB) division; 2) Geographic expansion into Latin America via two new Brazilian subsidiaries; and 3) Aggressive R&D to maintain the 35-40% global market share in cotton ginning machinery while diversifying into fire-fighting systems and heavy engineering.

Products & Services

Cotton ginning machinery (Single/Double Roller, Saw-Ginning), Pre-Engineered Buildings (PEBs), electrical panels, fire-fighting systems, steel safety and fire-resistant doors, and heavy engineering equipment.

Brand Portfolio

Bajaj, Continental Eagle (USA), IMPCO (Delinting Equipment).

New Products/Services

Expansion into high-capacity Saw-Ginning and Roto-Bar technologies following the Continental Eagle acquisition, and new fire-resistant steel doors for industrial applications.

Market Expansion

Targeting Latin American markets through new subsidiaries in Brazil established in FY25. The company is also expanding its presence in the USA and Uganda.

Market Share & Ranking

Global leader in cotton ginning machinery with a 35-40% global market share and a 50% domestic market share in India.

Strategic Alliances

Partnership with CIRCOT (ICAR, Govt. of India) for technological innovation in cotton processing.

🌍 External Factors

Industry Trends

The industry is shifting toward high-capacity, automated ginning solutions. BSIL is positioned as a leader by offering machines that process 200 bales per hour, the highest globally, and diversifying into PEBs to capture industrial infrastructure growth.

Competitive Landscape

Faces competition from the unorganized sector in the domestic Indian market, which has driven the company to focus more on high-margin international exports.

Competitive Moat

The moat is built on being the only global player with a complete technology portfolio (Single/Double Roller, Saw, Roto-Bar) and a 64-year legacy. This is sustainable due to high technical barriers and a global service network.

Macro Economic Sensitivity

Highly sensitive to global cotton production cycles and textile industry health. Domestic sales were noted as 'sluggish' in FY24 due to local market dynamics.

Consumer Behavior

Increasing demand for fire safety and sustainable infrastructure is driving the growth of the Steel Door and PEB segments.

Geopolitical Risks

Trade barriers and shipping route disruptions (Red Sea) pose risks to the export-heavy business model, impacting both delivery timelines and freight costs.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to Ministry of Textiles recognitions and compliance with the Companies Act 2013 and SEBI Listing Regulations 2015. The company issued 1.56 Cr bonus shares (3:1 ratio) in FY25 in compliance with Section 63 of the Act.

Environmental Compliance

The company maintains a CSR policy and committee in compliance with Section 135 of the Companies Act, 2013.

Taxation Policy Impact

Effective tax rate for H1 FY26 was approximately 24.8% (INR 9.5 Cr tax on INR 38.2 Cr PBT).

Legal Contingencies

The company confirms compliance with all applicable accounting standards and laws; no specific high-value pending litigation amounts were disclosed in the provided summaries.

⚠️ Risk Analysis

Key Uncertainties

Fluctuations in cotton prices and availability can impact the capital expenditure plans of ginning mill customers, potentially delaying orders. Operating margins are sensitive to international freight rate volatility.