💰 Financial Performance

Revenue Growth by Segment

Total operating income from the steel business reached INR 747.49 Cr in FY25, a 1.24% increase from INR 738.29 Cr in FY24. H1 FY26 revenue grew 3.25% YoY to INR 386.9 Cr. Brand sales turnover, which includes franchisee sales, grew to approximately INR 22,156 Cr in FY25.

Geographic Revenue Split

Not explicitly disclosed by percentage, but the company operates a pan-India network with a manufacturing plant in Bhiwadi, Rajasthan, and over 80 franchisees across various states to reach underserved Tier II and Tier III cities.

Profitability Margins

Gross Profit margin improved to 32.9% in H1 FY26 from 29.3% in H1 FY25. Net Profit (PAT) margin increased significantly to 10.4% in H1 FY26 compared to 8.4% in H1 FY25, driven by higher royalty income and zero debt servicing costs.

EBITDA Margin

PBILDT margins remained stable at approximately 8.18% in FY24. Core profitability is heavily supported by royalty income which averages INR 350-450 per tonne, acting as a high-margin buffer against volatile steel prices.

Capital Expenditure

The company maintains a 'capital-light' model. Significant debt-funded capex is not planned; however, it raised INR 45.52 Cr through a preferential issue of convertible warrants by March 2025, with an additional INR 10.59 Cr in Q1 FY26 for operational requirements.

Credit Rating & Borrowing

The company holds a 'CARE A; Stable' issuer rating as of July 2025. Borrowing costs are minimal as the company reported nil bank debt as of March 31, 2025, having repaid all bank facilities.

⚙️ Operational Drivers

Raw Materials

Steel ingots and billets are the primary raw materials, accounting for 70-75% of the total operating income.

Import Sources

Raw materials are sourced domestically from states including Odisha, Karnataka, Chhattisgarh, and Uttar Pradesh.

Key Suppliers

Sourced from various regional manufacturers and traders; specific company names like SAIL or Tata Steel are not listed, but the strategy involves multi-state procurement to mitigate regional supply risks.

Capacity Expansion

Current total brand capacity includes Steel Rebars at 40 Lakh MTPA, Structural Steel at 10 Lakh MTPA, and Colour Coated Sheets at 2.5 Lakh MTPA. The Bhiwadi plant specifically has a capacity of 120,000 TPA for TMT bars and 22,500 TPA for ingots.

Raw Material Costs

Raw material costs represented approximately 67% of revenue in H1 FY26 (INR 259.7 Cr out of INR 386.9 Cr). The company manages volatility by passing on price increases to customers and relying on fixed-margin royalty income.

Manufacturing Efficiency

Volume sold in FY25 was 36 Lakh MT against a total brand capacity of approximately 52.5 Lakh MTPA, indicating a capacity utilization of roughly 68.5% across the brand umbrella.

Logistics & Distribution

Distribution is decentralized through 80+ franchisee units located near consumption centers, reducing freight costs and improving delivery speed to retail customers.

📈 Strategic Growth

Expected Growth Rate

14%

Growth Strategy

Growth is targeted through the expansion of the franchisee network (currently 100+) and deepening retail presence in Tier II and III cities. The company uses a 'brand-first' strategy to generate royalty income (INR 139 Cr in FY25) which is ROCE-accretive and requires minimal capital outlay.

Products & Services

TMT bars (Kamdhenu Nxt), structural steel (angles, channels, beams, flats), MS pipes, Kamdhenu Colour Max (roofing/cladding), and Shresth GC Sheets.

Brand Portfolio

Kamdhenu, Kamdhenu Nxt, Kamdhenu Colour Max, Kamdhenu Shresth.

New Products/Services

Focusing on value-added products like Colour Coated Sheets (2.5 Lakh MTPA capacity) and specialized TMT bars to increase the premium product mix.

Market Expansion

Targeting increased penetration in the retail segment across India, leveraging a network that already spans 10,000+ dealers to capture infrastructure-led demand.

Market Share & Ranking

Ranked as India's largest branded TMT bar player in the retail segment.

Strategic Alliances

Operates through 80+ manufacturing franchise partners who produce under the Kamdhenu brand in exchange for royalty payments.

🌍 External Factors

Industry Trends

The industry is shifting toward branded retail consumption. While steel prices are cyclical, the 14% historical CAGR suggests steady demand growth driven by India's infrastructure momentum.

Competitive Landscape

Faces intense competition from both large organized players (JSW, Tata Steel) and numerous unorganized regional rolling mills.

Competitive Moat

The moat is the 'Kamdhenu' brand and the decentralized franchise network. It is sustainable because it allows for rapid scaling without the debt burden associated with building integrated steel plants.

Macro Economic Sensitivity

Highly sensitive to the construction and infrastructure sectors. GDP growth and government spending on housing directly impact the demand for TMT bars.

Consumer Behavior

Increasing preference for branded, quality-certified TMT bars in individual home building (retail segment) over unbranded local steel.

Geopolitical Risks

Global trade tensions and high imports can pressure domestic steel prices, as seen in FY24 when increased imports impacted local realizations.

⚖️ Regulatory & Governance

Industry Regulations

Subject to Bureau of Indian Standards (BIS) for steel quality and environmental norms for its Bhiwadi manufacturing unit.

Environmental Compliance

The company ensures compliance with environmental safety regulations, avoiding industrial discharges and adopting residue disposal methods; specific costs are not disclosed.

Taxation Policy Impact

Effective tax rate was approximately 26% in H1 FY26 (INR 14.2 Cr tax on INR 54.3 Cr PBT).

Legal Contingencies

The company successfully completed a demerger process via NCLT in 2022; no major pending litigation values are disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

Steel price volatility (75% cost exposure) and the cyclical nature of the industry are primary risks. A decline in royalty income below INR 80 Cr is a key negative rating sensitivity.

Geographic Concentration Risk

While pan-India, the company has a strong historical base in Rajasthan where its primary 120,000 TPA plant is located.

Third Party Dependencies

High dependency on 80+ franchisee partners for manufacturing volumes and 10,000+ dealers for retail distribution.

Technology Obsolescence Risk

Low risk in basic steel products, but the company mitigates this by providing updated technical manufacturing expertise to its franchise partners.

Credit & Counterparty Risk

The company faces credit risk from its dealer network, reflected in its focus on managing the collection period and monitoring expected credit losses (INR 4.36 Cr write-back in FY24).