Vardhman Special Steels (VSSL) Q4 22/23 earnings summary

Executive summary

• FY23 set records for revenue, production and sales, with turnover above ₹1,700 crore and sales above 200,000 tonnes despite sharp input-price volatility.

• Toyota-approved mass production began, and the first shipment of about 1,000 tonnes went to Aichi Forge in Thailand.

Financial highlights

• Revenue from operations rose to ₹1,734.99 crore from ₹1,368.46 crore in FY22, supported by higher sales volumes and passenger-vehicle demand.

• EBITDA fell 11.1% to ₹180.08 crore from ₹202.58 crore; EBITDA margin declined to 10.38% from 14.80% amid inflationary cost pressure.

• Net profit was ₹100.45 crore versus ₹100.75 crore; lower tax liability under the new tax regime offset weaker EBITDA.

• Operating cash flow increased to ₹73.58 crore from ₹58.88 crore; working-capital needs rose with input costs and operating volumes.

Outlook and guidance

• FY24 is planned as a consolidation year focused on product development, quality and process adherence; sales volume is expected to increase marginally.

• Approvals for additional Aichi-linked grades are expected over the next 12–18 months, potentially increasing shipments to South-East Asia.

• A rolling-capacity investment of ₹160 crore is planned, with commissioning expected in FY25; a broader expansion plan of about ₹300 crore is scheduled over three years.

• Capacity shortfall is anticipated in 2026; multiple options are being assessed, including a potential second plant.