VMSTMT - VMS TMT

📊 NSE: VMSTMT 🏢 Iron & Steel Products 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

The company reported a 2-year CAGR of approximately 33% in total operating income. Revenue stood at INR 872.96 Cr in FY2024, a slight decrease of 1.03% from INR 882.01 Cr in FY2023, but a significant 76.8% increase from INR 493.73 Cr in FY2022. For 7MFY2025, the company achieved provisional revenue of INR 534.57 Cr.

Geographic Revenue Split

100% of the company's revenue is derived from the state of Gujarat, specifically from the sale of hot rolled TMT bars, creating a high level of regional concentration risk.

Profitability Margins

Profitability showed significant improvement; PAT margin increased from 0.49% (INR 4.34 Cr) in FY2023 to 1.52% (INR 13.28 Cr) in FY2024. This 206% increase in PAT was driven by lower raw material costs and the implementation of a coal automation plant.

EBITDA Margin

EBITDA margin improved from 2.52% (INR 22.27 Cr) in FY2023 to 4.71% (INR 41.15 Cr) in FY2024, representing an 84.8% increase in core operational profitability due to better cost management and backward integration.

Capital Expenditure

The company recently completed major capex including a coal automation plant in FY2024 and a captive billet division in October 2024. Future financial risk is expected to improve as there are no major debt-funded capex plans currently scheduled.

Credit Rating & Borrowing

Credit rating was upgraded to IVR BBB/Stable (Long Term) and IVR A3+ (Short Term) in January 2025. The company utilizes approximately 90.75% of its fund-based limits, indicating a moderately high reliance on bank borrowing.

⚙️ Operational Drivers

Raw Materials

Key raw materials include steel billets (now produced via a captive division) and coal (managed via a new automation plant). Raw material cost declines were a primary driver for the 84.8% increase in EBITDA during FY2024.

Import Sources

Not specifically disclosed in available documents, though the company operates primarily within Gujarat and sources materials to support its Bhayla manufacturing unit.

Key Suppliers

Not disclosed in available documents; however, the company has a royalty agreement with Kamdhenu Limited for brand usage and technical assistance in material supply.

Capacity Expansion

Current installed capacity is 2,00,000 MTPA at the Bhayla unit. A captive billet division became operational in October 2024 to enhance vertical integration and margin control.

Raw Material Costs

Raw material costs are highly volatile; however, the company mitigated this in FY2024 through the installation of a coal automation plant and the transition to captive billet production, which helped double the EBITDA margin to 4.71%.

Manufacturing Efficiency

Efficiency is supported by the captive billet division and coal automation. The company maintains an operating cycle of 43 days, reflecting efficient conversion of raw materials into finished TMT bars.

Logistics & Distribution

Distribution is handled through a vast network of distributors and dealers under the Kamdhenu brand royalty agreement, allowing for premium pricing in the Gujarat market.

📈 Strategic Growth

Expected Growth Rate

33%

Growth Strategy

Growth is targeted through vertical integration, specifically the new captive billet division (Oct 2024) which reduces external procurement costs. The company also leverages the 'Kamdhenu' brand to command premium pricing and utilizes a coal automation plant to maintain cost leadership in a competitive market.

Products & Services

Hot rolled TMT bars, specifically marketed as Kamdhenu Nxt TMT Bars and Kay2 TMT Bars.

Brand Portfolio

Kamdhenu Nxt TMT Bars, Kay2 TMT Bars.

New Products/Services

The captive billet division is the primary new operational addition, expected to enhance profitability margins in the medium term rather than introducing a new consumer product line.

Market Expansion

The company currently focuses on the Gujarat market; no specific plans for expansion into other Indian states were detailed in the documents.

Market Share & Ranking

Not disclosed in available documents; however, the industry is described as heavily fragmented and unorganized.

Strategic Alliances

Royalty agreement with Kamdhenu Limited for brand usage and supply chain assistance.

🌍 External Factors

Industry Trends

The downstream steel industry is growing but remains fragmented. There is a shift toward branded TMT bars (like Kamdhenu) which allow for better margins. The industry is currently characterized by high volatility in raw material prices and intense competition from both organized and unorganized players.

Competitive Landscape

Intense competition from a large number of organized and unorganized players in the fragmented downstream steel sector.

Competitive Moat

The company's moat is built on its association with the reputed 'Kamdhenu' brand and its recent backward integration into billets. This brand-led moat is sustainable as long as the royalty agreement remains in place and the company maintains quality standards.

Macro Economic Sensitivity

Highly sensitive to the cyclical nature of the steel industry and infrastructure spending in India, particularly within Gujarat.

Consumer Behavior

Increased preference for branded, high-quality TMT bars for construction safety, benefiting the company's Kamdhenu-branded products.

Geopolitical Risks

Exposure is limited due to domestic focus, but global steel price fluctuations impact local raw material costs.

⚖️ Regulatory & Governance

Industry Regulations

Subject to manufacturing standards for TMT bars and environmental norms for steel plants; the company recently upgraded to a coal automation plant which likely assists in operational efficiency and compliance.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of raw material prices and the cyclical nature of the steel industry, which can rapidly fluctuate the 4.71% EBITDA margin.