Vardhman Special Steels (VSSL) Q4 23/24 earnings summary

Executive summary

• FY24 was a consolidation year: maintenance and rolling-mill expansion reduced sales volumes, while operations focused on quality, efficiency and smooth Toyota production.

• Sales were 195,000 tonnes and EBITDA was ₹172 crore, within the stated EBITDA-per-tonne guidance range of ₹7,000–₹10,000.

• Internal Toyota rejections declined; eight additional variants were approved, bringing total approvals to 22, with shipments to Aichi Steel’s Thailand facility reaching about 6,000 tonnes.

Financial highlights

• Revenue from operations fell to ₹1,661.36 crore in FY24 from ₹1,734.99 crore in FY23; EBITDA and net profit declined 4% and 9%, respectively.

• Net profit was ₹91.63 crore versus ₹100.45 crore; basic EPS was ₹11.26 versus ₹12.35.

• Net cash flow from operations increased to ₹142.41 crore from ₹73.58 crore, primarily on tighter working-capital management.

• Billet production rose 2.91% to 226,321 MT; rolled production fell 9.07% to 171,042 MT.

Outlook and guidance

• FY25 sales target is around 210,000 tonnes, despite planned rolling-mill shutdowns for Kocks Block installation; management expects cost work to support profitability.

• EBITDA-per-tonne guidance rises to ₹8,000–₹11,000 from FY26 and could reach ₹9,000–₹12,000 from FY27-28 onward.

• Target is 250,000 tonnes of saleable production capacity by FY26-27, with a sales growth pathway to 250,000 tonnes in FY27-28.

• A 55 MW solar project is expected to meet nearly 40% of power needs and reduce carbon intensity from 0.73 to about 0.45 tonnes of CO₂ per tonne of steel.

• Plans include pursuing European OE and Tier 1 business, finalizing a greenfield plant plan, and studying a potential forging-sector entry with Aichi Steel.