VSTL - Vibhor Steel

📊 NSE: VSTL 🏢 Steel - Medium / Small 📅 Last Updated: 12/14/2025 15:04

💰 Financial Performance

Revenue Growth by Segment

Total revenue decreased by 7.12% to INR 996.38 Cr in FY25 from INR 1,072.71 Cr in FY24. 9MFY25 revenue was INR 708.91 Cr compared to INR 782.49 Cr in 9MFY24, reflecting a decline due to lower realizations and regional election-related slowdowns.

Geographic Revenue Split

The company derives 88-92% of its revenue from domestic sales to Jindal Pipes Limited (JPL). It also exports finished goods under the 'Jindal Star' brand to approximately 10 countries globally to hedge against regional business concentration.

Profitability Margins

Profit After Tax (PAT) decreased by 33.57% to INR 11.77 Cr in FY25 from INR 17.72 Cr in FY24. Net profit margin is approximately 1.18% for FY25. Margins were pressured by a sharp decline in steel prices and inventory revaluation losses.

EBITDA Margin

PBILDT margins were 4.54% in FY24 (up from 4.10% in FY23) but declined to 3.71% in 9MFY25. The decline is attributed to raw material price volatility and the inability to fully pass on costs in a competitive market.

Capital Expenditure

The company raised INR 72 Cr through an IPO in 2024 to fund working capital. It is currently undertaking debt-funded capex for capacity expansion in Telangana and a new plant in Odisha to reduce logistics costs.

Credit Rating & Borrowing

CARE Ratings revised the outlook from 'Positive' to 'Stable' while reaffirming ratings. Total debt stood at INR 141.55 Cr as of March 31, 2024, with an overall gearing ratio of 0.80x, improved from 1.63x in FY23 due to IPO proceeds.

⚙️ Operational Drivers

Raw Materials

Steel (used for ERW and galvanized pipes) represents the primary raw material cost. Specific steel types include black pipes and galvanizing inputs, which are subject to high price volatility.

Import Sources

Raw materials are sourced from diversified geographical locations and multiple vendors within India to minimize supply chain risks; specific international sources are not disclosed.

Key Suppliers

Not specifically named in the documents, though the company maintains long-term contracts with multiple vendors to ensure buffer inventory.

Capacity Expansion

Current cumulative capacity is 221,000 MTPA (125,000 MTPA at Sukheli, Maharashtra and 96,000 MTPA at Mehboob Nagar, Telangana). The company has recently commenced production at a new plant in Odisha, which is the largest iron market.

Raw Material Costs

Raw materials form a significant cost component; volatility in steel prices led to inventory revaluation losses and a margin compression to 3.71% in 9MFY25.

Manufacturing Efficiency

Average capacity utilization remained at approximately 71% for the two years ended FY24, an improvement from 48-52% in FY22.

Logistics & Distribution

The company utilizes its strategically positioned manufacturing sites in Maharashtra, Telangana, and Odisha to optimize distribution to domestic and export markets.

📈 Strategic Growth

Growth Strategy

Growth is targeted through capacity expansion in Telangana and Odisha, geographic diversification into 10 export countries, and the addition of value-added products like crash barriers, monopoles, and octagonal poles to the portfolio.

Products & Services

ERW black pipes, galvanized pipes, hollow sections, primer painted pipes, crash barriers, monopoles, and octagonal poles.

Brand Portfolio

Jindal Star (under MoU with Jindal Pipes Limited).

New Products/Services

New product additions include crash barriers, monopoles, and octagonal poles, intended to improve operating leverage and margins.

Market Expansion

Expansion into the Odisha market (the largest iron market) and continued growth in international markets (10 countries currently).

Strategic Alliances

6-year Memorandum of Understanding (MoU) with Jindal Pipes Limited (JPL) for fixed off-take and cost compensation.

🌍 External Factors

Industry Trends

The ERW pipe industry is highly fragmented with many unorganized players. The industry is shifting toward value-added products like poles and crash barriers to counter low margins in standard pipes.

Competitive Landscape

Operates in a highly fragmented and competitive business with low entry barriers, restricting bargaining power against both suppliers and customers.

Competitive Moat

The primary moat is the long-term relationship and fixed off-take MoU with JPL, which ensures volume stability and covers major manufacturing costs, though customer concentration remains a risk.