💰 Financial Performance

Revenue Growth by Segment

Total revenue was stable at INR 389 Cr in fiscal 2024, supported by a 12% rise in sales volumes which offset lower market prices. Segment-specific percentage growth for billets and sponge iron is not disclosed.

Geographic Revenue Split

Not disclosed in available documents, though 100% of manufacturing operations are located in Raipur, Chhattisgarh.

Profitability Margins

Net Profit Ratio was 2.09% in FY25, representing a 9.90% decrease from 2.32% in FY24. Operating margins have remained stable between 5-6% over the last four fiscals through March 31, 2024.

EBITDA Margin

Operating margins were estimated at 5.7% in Q1 FY25. Return on Capital Employed (ROCE) was 7.20% in FY25, a 44.43% decrease from 12.96% in FY24 due to a significant increase in capital employed.

Capital Expenditure

The company is undertaking a major capital expenditure of INR 115.2 Cr for the installation of a 30MW solar power plant to improve operating efficiency and reduce power costs.

Credit Rating & Borrowing

Assigned IVR BBB/Stable for Long Term Bank Facilities (INR 168.75 Cr) and IVR A3+ for Short Term Bank Facilities (INR 65.00 Cr) as of July 14, 2025. Bank limit utilization is low at 34.17%.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include iron ore and coal, which are essential for the production of sponge iron and mild steel billets. Specific cost percentages for each were not disclosed.

Import Sources

Sourced primarily from the Raipur, Chhattisgarh region, benefiting from the strategic location in the Siltara industrial hub which provides ease of access to raw material clusters.

Capacity Expansion

Current installed capacity is 66,000 MTPA for MS Billets and 90,000 MTPA for Sponge Iron. The company is planning an expansion of billet manufacturing capacity over the medium term.

Raw Material Costs

Profitability is highly susceptible to volatility in raw material prices. The company uses backward integration, including captive power plants, to mitigate these cost fluctuations.

Manufacturing Efficiency

Sales volumes increased by 12% in FY24, indicating improved capacity utilization. Manufacturing efficiency is expected to rise following the completion of the 30MW solar project.

Logistics & Distribution

The manufacturing facility is strategically located at Siltara, Raipur, which is well-connected by road and rail to major cities, facilitating efficient distribution of steel products.

📈 Strategic Growth

Growth Strategy

Growth will be achieved through backward integration initiatives, specifically the 30MW solar plant to lower input costs, and the proposed expansion of billet manufacturing capacity to increase market scale.

Products & Services

Mild Steel (MS) Billets and Sponge Iron.

Brand Portfolio

Vaswani Industries Limited (Vaswani Group).

Market Expansion

Targeting growth in the iron and steel segment by leveraging the established Vaswani Group presence and expanding billet capacity over the medium term.

🌍 External Factors

Industry Trends

The steel industry is currently characterized by intense competition and cyclicality. VIL is positioning itself for the future by investing in renewable energy (solar) to lower its carbon footprint and operational costs.

Competitive Landscape

Faces intense competition from both large integrated steel players and numerous secondary steel producers in the MS billet and sponge iron segments.

Competitive Moat

Moat is derived from 30+ years of promoter experience and a strategic locational advantage in Chhattisgarh's industrial hub. Sustainability is supported by low gearing (0.3x) and promoter capital infusions.

Macro Economic Sensitivity

Highly sensitive to economic developments within India and globally, as steel demand is closely linked to GDP growth and infrastructure spending.

Geopolitical Risks

Exposed to global market conditions that influence international steel prices and raw material availability.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental pollution norms and manufacturing standards applicable to the iron and steel industry in India.

Environmental Compliance

Investing INR 115.2 Cr in solar power to align with environmental standards and reduce reliance on traditional power sources.

Taxation Policy Impact

The company faces uncertain tax positions regarding matters under dispute, which are considered a Key Audit Matter for the FY25 audit.

Legal Contingencies

Pending litigations exist regarding tax disputes and other matters as disclosed in Note 30 of the financial statements; specific case values were not provided.

⚠️ Risk Analysis

Key Uncertainties

Key risks include project stabilization risk for the new solar plant and billet expansion, which could impact profitability if delayed. A 20% revenue decline is cited as a major downward rating factor.

Geographic Concentration Risk

High geographic concentration with 100% of manufacturing facilities located in Siltara, Raipur, Chhattisgarh.

Technology Obsolescence Risk

The shift toward solar power indicates a digital and technological transformation to maintain cost competitiveness against more modern plants.

Credit & Counterparty Risk

Liquidity is adequate with a current ratio of 2.7x and cash accruals of INR 15-18 Cr, which are sufficient to cover term debt obligations of INR 2-11 Cr.