💰 Financial Performance

Revenue Growth by Segment

Total Net Sales grew 42.8% YoY, reaching INR 218.73 Cr in H1FY26 compared to INR 153.17 Cr in H1FY25. The growth was driven by a 40-45% jump in revenue and volumes, specifically a 12% volume jump on a half-year basis.

Geographic Revenue Split

The North Zone is the primary contributor at 57%, followed by the West Zone at 16%, South Zone at 16%, and East Zone at 11% as of H1FY26.

Profitability Margins

Profitability saw a significant decline in H1FY26; Gross margins dropped due to high-priced inventory. PAT margin fell from 9.41% in H1FY25 to 1.68% in H1FY26. The company targets a long-term blended margin of 12% to 13%.

EBITDA Margin

EBITDA margin compressed to 4.66% in H1FY26 from 14.97% in H1FY25, a decrease of 1,031 basis points. This was primarily due to the consumption of high-priced inventory purchased in previous periods.

Capital Expenditure

The company has no major capex planned in the near future as per credit reports, though it is currently expanding capacity to 24,000 MTPA. IPO proceeds of INR 66.72 Cr were primarily utilized for working capital requirements.

Credit Rating & Borrowing

Credit rating was upgraded in December 2024 to CARE BBB; Stable (Long Term) and CARE A3+ (Short Term). Borrowing costs for bill discounting are approximately 50-60 basis points above the Cash Credit (CC) limit.

⚙️ Operational Drivers

Raw Materials

CRGO (Cold Rolled Grain Oriented) steel is the primary raw material, with cost of materials consumed representing 82.8% of total revenue (INR 181.17 Cr) in H1FY26.

Import Sources

Raw materials are sourced from both domestic and international mills, as well as through traders and stockists. Specific countries are not disclosed, but the company holds a Star Export House certification.

Key Suppliers

The company procures from various mills, traders, and stockists to maintain flexibility in payment terms and supply consistency.

Capacity Expansion

Current installed capacity for Unit I & II is 18,060 MTPA and Unit III is 1,200 MTPA, totaling 19,260 MTPA. The company is expanding to a total of 24,000 MTPA by the end of the calendar year.

Raw Material Costs

Raw material costs increased significantly in H1FY26, with the cost of materials consumed rising 49.2% YoY to INR 181.17 Cr. The company uses a pass-through model to transfer cost volatility to customers.

Manufacturing Efficiency

Total production in H1FY26 was 7,934 MT (7,692 MT from Units I/II and 242 MT from Unit III). Average month-end utilization of fund-based limits was low at 43.24%.

📈 Strategic Growth

Expected Growth Rate

40-45%

Growth Strategy

Growth will be achieved by expanding CRGO processing capacity to 24,000 MTPA, diversifying into the manufacturing of Transformers and Core Coil Assemblies, and entering the EPC segment which has a target margin of 8-10%.

Products & Services

CRGO cut steel cores, laminations, Transformers, Core Coil Assemblies, and EPC (Engineering, Procurement, and Construction) services for the power sector.

Brand Portfolio

Jay Bee Laminations; the company is also launching a new brand for its transformer division.

New Products/Services

Transformers and Core Coil Assemblies are new manufacturing lines; the EPC division is expected to contribute with margins of 8-10%.

Market Expansion

The company is leveraging its Star Export House certification to increase international sales and is expanding its domestic footprint beyond the North Zone (currently 57%).

🌍 External Factors

Industry Trends

The industry is seeing growing demand for CRGO cut steel cores from transformer manufacturers. JBLL is positioning itself as a multi-segment player rather than just a CRGO processor to capture more value.

Competitive Landscape

The company competes with other industrial product manufacturers in the capital goods sector; it uses bill discounting to maintain flexible payment terms with suppliers to stay competitive.

Competitive Moat

Moat is based on 40+ years of promoter experience, established relationships with global steel mills, and critical certifications including ISO, BIS, and PGCIL approval.

Macro Economic Sensitivity

Highly sensitive to the power infrastructure sector and industrial capital goods demand, which drives the requirement for transformers and CRGO laminations.

Consumer Behavior

Demand is driven by utility companies and transformer manufacturers requiring high-efficiency cores for power distribution.

Geopolitical Risks

As a Star Export House, the company is subject to international trade regulations and potential barriers in the global steel and transformer markets.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by BIS (Bureau of Indian Standards) and PGCIL (Power Grid Corporation of India Limited) manufacturing standards and certifications.

Taxation Policy Impact

The effective tax rate for H1FY26 was approximately 20.9% (INR 0.97 Cr tax on INR 4.66 Cr PBT).

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility is the primary risk, with potential margin impact exceeding 10% if high-priced inventory cannot be cleared quickly.

Geographic Concentration Risk

High geographic concentration in the North Zone, which accounts for 57% of total revenue.

Third Party Dependencies

Dependency on steel mills and traders for CRGO supply; the company uses non-fund based limits (90.29% utilization) for these procurements.

Technology Obsolescence Risk

The company is upgrading its manufacturing capabilities to include core coil assemblies to stay ahead of technology shifts in transformer manufacturing.

Credit & Counterparty Risk

Trade receivables stood at INR 78.14 Cr in H1FY26, indicating significant credit exposure to transformer manufacturers and utilities.