JTL Industries Limited (534600) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to JTL Industries Q3 FY '26 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand over the conference to Mr. Vikash Singh from ICICI Securities. Thank you, and over to you, sir.

Good afternoon, everyone. I warmly welcome all of you on Q3 FY '26 JTL Industries Results Conference Call. From the management side, we have with us Mr. Pranav Singla, Executive Director; and Mr. Naveen Kumar Laroiya, CFO. Without taking any much time, I'll hand over to Mr. Pranav for his opening remarks. Over to you, sir.

Good afternoon. This is Naveen Laroiya, CFO of JTL Industries. I welcome you to this investor conference today, the 24th of January 2026. I will now proceed to give you a synopsis of the performance of the company during the quarter and the 9 months, which ended on 31st December 2025. Q3 of financial year '26 has turned out to be better than Q2. On a consolidated basis, the company's turnover increased to INR 470.51 crores as compared to INR 429.30 crores. This is an increase of 9.6% Q-on-Q. The total sales volume has risen to 90,429 metric tons from 81,593 metric tons, marking an increase of 10.08% Q-on-Q. The company's EBITDA has increased to INR 42.26 crores from INR 36.63 crores. This is an increase of 15.3% Q-on-Q. The PBT has risen to INR 33.05 crores from INR 30.69 crores, leading to an upturn of 8% Q-on-Q. On a stand-alone basis, the company's turnover has increased to INR 422.9 crores and compares well with INR 370.9 crores, marking a rise of 14% Q-on-Q. The total sales volume has seen a rise to 80,192 metric tons from 68,502 metric tons, leading to a 17.06% increase Q-on-Q. The stand-alone EBITDA has increased to INR 38.80 crores from INR 32.73 crores, leading to an upturn of 18.6% Q-on-Q. The EBITDA per metric ton has seen a rise to INR 4,839 from INR 4,778 leading to an improvement of 1.3%. The PBT has risen to INR 32.37 crores from INR 27.27 crores, leading to an increase of 18.7% Q-on-Q. The company has seen an improvement in its performance on a Q-on-Q basis, and this momentum is likely to continue in the current quarter and beyond that. We are hopeful of further improvement by the end of the year and in the years thereafter. Now here is a synopsis of the other main points of the consolidated performance of the JTL Industries Limited for the 9 months period that ended on 31st December 2025. For the current year's 9-month period, the company achieved a revenue of INR 1,444 crores as compared to INR 1,446 crores for the same period in the previous financial year. This shows that the company has tried to catch up with the shortfall being only 0.14% year-on-year. The total volume of sales achieved after eliminating intercompany transactions in 9 months of '26 was 2,72,639 metric tons. This compares well with the sales of 2,63,804 metric tons in the 9-month period ended on 31st December '24. This shows a growth of 3.34% year-on-year. The export sales in 9 months of financial year '26 were 25,515 metric tons. The corresponding figure in 9 months of financial year '25 was 26,858 metric tons. This shows a shortfall of around 5% year-on-year. However, in the Q3, the exports are 9,591 metric tons as compared to 8,640 metric tons in Q3 of financial year '25. This shows a year-on-year increase of 11%. On a stand-alone basis, the salient points are, in the 9 months of financial year '26, the revenue was INR 1,298 crores as opposed to INR 1,446 crores in the 9 months of financial year '25. There is a gap of around 10%. However, as can be seen from the figures, the company has shown resilience by maintaining better profitability figures due to overall efficiency. In financial year '26, the EBITDA for Q3 is INR 38.8 crores as opposed to EBITDA of INR 37.21 crores in Q3 of financial year '25. This has shown an increase of 4.3% year-on-year. In financial year '26, the PAT for Q3 is INR 26 crores as opposed to INR 24.97 crores in Q3 of financial year '25. This has shown an increase of 4.12% year-on-year. As can be seen from the figures above, the current year's performance shows an improvement in the company's performance from the financial year '25. The sales volume in the 9 months of financial year '26 was 2,40,821 metric tons as opposed to 2,63,803 in 9 months of financial year '25. This shortfall of 8.7% has been met by the better consolidated performance. Challenges remain in the business and in the business environment and the improvement in performance in 9 months of the financial year '26 only shows that the company has now become more resilient. Thank you. We open the floor for questions.

[Operator Instructions] The first question is from the line of Harsh from Valentis.

Am I audible?

Yes, Harsh. You are audible.

Yes. So I have like 2 questions. So we have seen an uptick in HRC prices in the late December and January. So what's your view on the demand outlook for India if prices continue to rise over the next few quarters? And second question is, what's your view on our recycled steel price industry in the scenario of an uptick in steel prices?

Thanks, Harsh, for your question. To talk about the upside in HRC pricing, you have been -- as you witnessed there was a price increase happening in January, and we are expecting a similar kind of price increase happening in February as well. Because of the whole scenario, there is restocking demand happening as well. And more than the restocking happening in dealer segment, there are also much more demand coming from government side as well as the new budget is expected, so we'll be getting new -- there will be new tenders come to the market as well in which we participate. And accordingly, there will be more orders with a more price increase as well. And if you talk about the recycling sector market, the price gap right now for like-to-like 2 mm coil is INR 5. And if you go further down the thickness, which is 1.6 mm thickness, the price gap over there goes up to INR 7.5, INR 8 as well. So which we think is a good amount of gap to push the secondary sales as well. And given the scenario right now of INR 5 and going ahead, as we see the more price increase happening in HRC, the price gap will increase as well from primary to secondary. We can expect the uptick in the secondary market sales as well of the recycled material.

The next question is from the line of Aditya from Axis Securities.

So in order to achieve our full year '26 sales volume guidance of 4 lakhs, we need to achieve almost 1.3 lakh tons in Q4. So how do you see -- will Q4 shape up that way? How are you seeing in January '25 sales volume picking up?

Aditya, so I'll give you just a synopsis of the current quarter, what we're going through right now. Already, we have achieved a sales volume of 40,000 tons in this quarter. So given the run rate of this quarter, we are very sure that we'll cross [indiscernible] lakh tons of sales and the before mentioned target of 4 lakh tons will be achieved in this financial year itself.

Okay. And the volume trajectory for upcoming 3 years, earlier in the call, you said -- sorry, in the last call, you said 6.5 lakhs, 9 lakhs and 10 lakh sales volume trajectory. So do you still hold that guidance given that this fiscal '26 is slightly a dovish fiscal?

As we mentioned that because of the run rate that we've done, the earlier mentioned target of 4 lakh tons will be achieved. The next year target of 6.5 lakh tons will be achieved. And the target after that of around 9 lakh ton sales, that will be achieved as well. We're sticking to our targets. There is no downtick we're doing in our targets. It remains the same as the capacity expansions are as per the plan, what they're happening. And we've already got our new company, RCI Industries under our subsidiary as well. So they are also actively contributing towards the sales in -- as a part of JTL Group, although it's not evident in tonnage because it's a different industry of copper, but the top line numbers will reflect because of that as well.

Okay. Got it. My second question is with respect to our EBITDA per ton guidance. I mean can you provide a guidance for FY '27 now means in 9 months, we have achieved INR 3,900 almost. So for '27, are we expecting some increase in EBITDA per ton? Because earlier, we have seen that on our value-added products, we have sold at some discount, which has impacted our EBITDA per ton. But are we now reducing that discount...

That was happening -- Aditya, that was happening in Q1. And as we mentioned that time, we couldn't lock in the offset -- onset of DFT that time. And as we are already 9 months ahead in the picture and we have majorly developed the entire market for DFT, about 75% market of DFT is already reached where we have to reach like the management has already been done. There's only 25% of the market which is left to be paneled around. And with already us being embedded in 70% of the market, we are able to achieve a decent margin of INR 4,500, INR 5,000 EBITDA per ton on right now situation as well. Going ahead, when we are impaneled everywhere, we're expecting that we will achieve a EBITDA ton of INR 6,500 in DFT segment itself. And if you talk about the guidance of EBITDA per ton, so we still stick that we'll have the EBITDA per ton of INR 4,000 as a whole for this year for the company. Going ahead next year, as we are launching new products such as color-coated, [ GP ] pipes, and the full operation of DFT as well, we'll guide -- we'll aim to get EBITDA per ton of INR 4,500 to INR 5,000 EBITDA per ton for the full year.

For '27, for FY '27?

For FY '27.

Okay. Just one last question. So on this PSTCL order, what is the quantum of it? And what kind of EBITDA per ton are we expecting from that? And will it be a recurring order or how...

It is a recurring order. It is a recurring order which we have got the impanelment for right now. The current order which stands is about 400 tons, which is for the current fiscal year. And going ahead in the next fiscal year, we shall be receiving new orders from the segment as well. On the EBITDA per ton front, as it's galvanized pipes, it should be plus INR 6,500, INR 7,000 EBITDA per ton on the segment.

The next question is from the line of Pallav from Antique Stockbroking.

So just any revenue and EBITDA targets for you, the RCI industries going ahead as it ramps up?

So Pallav, RCI right now, the target for this quarter is that we'll do close to 500 metric tons of sales in RCI, and that will equate to around INR 50 crores to INR 60 crores of top line in that segment. And going ahead, our target is that we'll reach 500 metric tons of sales per month, and that should be happening starting H2 of next financial year. So before that, till that time, we'll be ramping the capacity. The capacity -- the bonus part is that we already have the capacity installed. It's just that some debottlenecking has to be done and some upgrades have to be done. So we're very confident that from 500 tons a quarter, which we'll be doing this quarter, we shall be achieving 500 tons a month by H2 of next financial year.

Sure, sir. Okay.

On the margin front, it's a little too early for me to comment on the exact margin. But it's safe to say that all the items made over there are super value-added items. They're all items which go in defense and EV cars, EV automobiles. So the product is super value-added. We have already onboarded a few customers and OEMs like Minda Corp as well. who are heavily buying from us. So with this kind of market and order flow in that segment, we are very confident that we'll achieve 10% EBITDA margins starting H2 of next financial year.

Okay. Also, in terms of -- we had actually forfeited some warrants because the balance money wasn't paid up. So any -- what is the current number of warrants outstanding as of now?

There are no warrants outstanding as of now. The -- everything is done as per -- it has been in the balance sheet. There are no current pending warrants or shares in any form.

Okay. So whatever we forfeited that would have come into our reserves, the portion of money that we have already received...

Yes, yes. That goes in capital reserves in the balance sheet.

Sure, sure. Okay. Sir, lastly, again just coming back to with the safeguard duty coming in and prices going up. So are we really -- because and probably some further price hikes expected. So restocking demand also should probably happen this quarter? So how have you seen those trends so far on the month of January?

I mentioned that our run rate for the quarter already is at 40,000 tons. So this is clearly because of restocking happening in dealer segment and because the government tenders are yet to come. So this is purely dealer play, which is happening right now. And we're expecting a price hike happening in the coming months as well, in the month of February as well. Around INR 2 price hike is expected in the next month.

Okay. Lastly, just I think one of the major competitors has a product at the lower end of the primary pipe segment. So is that really impacting any of our sales at the lower-end commodity segment?

To understand the competitor offering the products in the market, he's offering maybe the leftovers or the different kind of products in the market. We are not competing in the segment or playing with those segments. We already have a good rate of products of DFT as well, of [ galvanize section ] as well, which are margin cushion for us. So we focus more on those products rather than fighting on those lower segment products, which the competitor is trying to focus on. So it's a safe gameplay for us. And more than that, we are also there in secondary market. So to compete with those products, we have our secondary market products as well, which are at the same quality more or less.

The next question is from the line of Sneha from Nuvama Wealth.

So for next year, you're guiding for around 6.5 lakh odd tons, which means more than 60% sort of volume growth. Could you guide us that which are the areas which are likely to get you such kind of a volume growth? What is your utilization at this point of time for Mangaon facility? How are we doing in terms of exports? Some flavor there would be helpful.

Thanks, Sneha, for your question. So Sneha, so if you are targeting 1.5 lakh tons of sales this quarter, this is just purely gameplay of all the capacities that we already have, including DFT in Maharashtra in Mangaon as well. Going ahead, when I'm saying that I'll be doing 6.5 lakh tons of sales in that a good proportion of sales or actually the majority proportion of sales will be coming from Mangaon itself. And how is coming from that? Because I'm launching color coated products over there, including GT pipes as well. So all that contributing should be -- contribution should be plus about 25,000, 30,000 tons a quarter. So because of that increase in sales, I shall be touching 1.5 lakh to 1.6 lakh tons of sales starting when my narrow width and the wider width starts, which is by April. So because of those things, we are very confident that we can achieve the 6.5 lakh tons of sales. And how the uptick of that number from 6.5 lakh to 9 lakh tons will go is because this is a segment that will be starting in power projects in which there will be the option to sell the products after doing CR, after doing GL and after doing color coated. So that's why as the part mill starts working out, as and when the sales also start increasing as well.

Understood. And what are the exports target for next year?

Exports, we'll be targeting around 60,000 to 67,000 tons of sales for exports next year, which is again a 10% of total volume of sales. So they will be, in a way, doubling from what we are right now.

[Operator Instructions] The next question is from the line of [indiscernible] Asset Management.

Am I audible?

Yes, you are audible.

So I just wanted to know about -- can you provide a specific time line for this wider color-coated line and API grade mill, which was scheduled to open in H1 FY '27. So as you are scaling a plant of Maharashtra plant from 4 lakh to 1.4 million tonnes...

So the wider segment will be starting production in Q1 itself. And for the API, we are too early in the picture right now to comment on that. But within the next financial year, everything should be completed for that as well.

Okay. So what is the CapEx that we are expecting for this?

So the wider, we've already incurred the majority CapEx, but close to INR 150 crores, INR 170 crores of CapEx is still pending on that side. And for API, we'll be doing a CapEx of close to INR 75 crores.

Okay. And next thing I just wanted to know this, what can be your actual margin uplift from this transition of DFT from commercial to value-added grade in the most recent quarter?

So the margin what peers are getting in DFT is close to INR 1,000. Right now, what margin we are able to get in DFT is close to INR 4,500 to INR 5,000 EBITDA per ton. So as I mentioned earlier as well, when we are impaneled at most the places and the synergies matches well, we should be targeting an EBITDA per ton of INR 7,500 in DFT segment as well in the lower side on the safer side.

Okay. So like when can you achieve that margin?

Starting Q1 or Q2 of H2, we should be targeting that. Before that, in this exit quarter, we should be targeting -- we should be having an EBITDA per ton of INR 5,500 to INR 6,000 EBITDA per ton in DFT segment.

The next question is from the line of Lokesh from SMIFS Institutional Equities.

A couple of questions from my side. Firstly, basically on the volumes, we are targeting around 1.2 lakhs of -- tons during Q3, but somehow we have settled at around 90,000 metric tons. So what basically explains the shortfall of around 30,000 during the quarter?

So basically, we were expecting a price hike happening in this quarter. There were a lot of orders held back in the quarter because we had to focus more on the margins, and we were -- we had an option of getting price variation. So because of those operations, the target was to focus more on the bottom line than the volume front for this quarter itself. So that kind of increase will be witnessed in the margin front as well in this quarter -- in Q4 because the material held back will be sold at a better pricing.

Okay. But are you confident enough that whatever you are targeting 1.3 lakh, 1.4 lakh tons during Q4 and around 6.5 lakh in FY '26, FY '27. So the target is achievable considering that at the current rate?

We are 100% sure about that because, as I mentioned, as of today, I have crossed 40,000 tons of sales in this quarter itself already. So even if we go by this run rate, I'll easily capture the 4 lakh tonne sales target of this financial year. And as I achieve this target of 4 lakh tons this year, I'm already at the run rate of 5.5 lakh tons for the next financial year with a lot of CapEx on board coming up in between. So because of those multiple things factored in, 6.5 lakh tons is a safe target for us for next financial year as well.

And secondly, sir, on the competitive intensity basically. So everyone, including your peers are increasing their capacities. And one of your main competitors also has basically being aggressive on increasing the capacity front. So what's your view on that? And do you think that the -- with the competitive intensity growing up, so there will be pressure on the EBITDA per ton front? And do you think that around INR 4,500 to INR 5,000 metric ton that you are targeting in FY '27 is a possibility? Or do you think that there will be pressure on that front as well? So just want your view on that.

So which is the main competitor that you're talking about, Lokesh, First of all, I'd like to ask you that -- there are a lot of multiple competitors...

APL was basically targeting around 6.8 lakh -- 68 lakh basically by FY '28. Now they have increased their plans to around 80 lakhs right now. So aggressive capacity and supply is likely to come over the next 2 years. So because of that, the question arises.

Lokesh, so basically, market is at such a point right now that there are multiple offerings of products happening in the market. for example, there are companies offering primary, there are companies offering primary plus secondary, there are companies offering just secondary. So where I position myself in the geography is that I'm offering primary plus secondary both in the market. So in that space, I feel that I am doing well and decent right now as well. And going ahead, my capacities as they're coming -- like I'm going to -- having an approach towards where I'm going more primary, I've launched DFT right now as well. Then I'm coming up with the API as well, coming up with color-coated as well. And as for the geographies where I'm situated, like I'm the only one in Maharashtra to have a galvanizing facility as well. So I'm very safely positioned in the plants that I have. So the capacity expansion, what the peers are doing, they are well positioned to sell the products in their market, and I'm very well positioned myself to sell the products in my market. So I think that everybody will benefit because it's a whole infra play which is happening in the country right now. And the previous year, like I gave a decent volume growth of around 10%. So that has happened without any government CapEx. When the government CapEx also kicks in, the increase of the company's performance just goes in a different direction. So we're expecting the same as well. And on the margin front, we've seen the weakest of margins happening for JTL as well, which was in Q1. The margins was -- the only reason the margins were in a weak side were because we launched a few extra products, which was DFT. If we are doing the normal course of products, our margins are very safe zone of INR 4,500 to INR 5,000 throughout since ever since. So as the products are settled in the market, the DFT settled in the market, we are again touching our line towards INR 5,000, which we'll achieve next year. And with this INR 5,000 EBITDA per ton, we'll target a huge volume coming from new products as well. So altogether, that makes a new shape of EBITDA and the look for the company.