Vibhor Steel Tubes Limited (VSTL) Earnings Call Transcript
August 13, 2025
Earnings Call Speaker Segments
Ladies and gentlemen, good afternoon, and welcome to the Q1 FY '26 Earnings Conference Call for Vibhor Steel Tubes Limited. We have with us today Mr. Vibhor Kaushik, Managing Director of the company. [Operator Instructions]. With this, I will now hand the conference over to Mr. Vibhor Kaushik, Managing Director of Vibhor Steel Tubes Limited, for his opening remarks and to share the audience the company performance in Q1 FY '26. Thank you, and over to you, sir.
Hello, everyone. I welcome everyone to this conference call of Vibhor Steel Tubes. And I gladly letting everyone know that I am taking this call from Telangana unit, Telangana factory. For the past -- every time we've had this conference call, I have always found myself in one of the three plants, either Sukeli or Telangana or Jharsuguda. The first quarter has been very smooth. We expected this, because of all the push that we've got from the government. in terms of duties. So it has made the domestic raw material competitive. It has made the requirement in the domestic market very steady, and that is why it has reflected in the turnover for quarter 1 in terms of the top line and also in terms of the margins. I'm also very glad to inform to everyone that Jharsuguda has started. We were waiting for a very long time for electricity. And finally, the electricity connection is installed. We have successfully tried and tested two of our tube mills. As of today, we have been able to manufacture three sizes of our steel pipes, namely 1.5-inch, 2-inch and 1 inch. The rest of them are in pipeline, and we should be able to make it this month. Our galvanized capacity galvanized plant is also tried and tested. It's running well. It's running smoothly. We have tested all these pipes that we have manufactured on our tube mills. We have galvanized them. Apart from that, we have also successfully tried and manufactured around about 1,000 tonnes of highway guardrails, and we have tried them on galvanizing line as well. We have done over 500 tonnes of galvanizing. And it looks like all the hurdles that we were facing for so many months for Jharsuguda, all of them have now overcome, and we should be able to steady our growth and our turnover should reflect from Jharsuguda as well from quarter 2 of this year. So this was the good news that I wanted to give to pass it over on this conference call that the growth is steady and the new unit is ready with its production and with its capacity utilization now. Thank you.
Should we start with the Q&A session, sir?
Yes. Yes.
[Operator Instructions] The first question comes from the line of Divya Sharma an Individual Investor.
First of all, congratulations for your new plant, and it really took a lot of time for switching that electricity line to regular power mode. Sir, my question is basically, apart from the company's profile, sir, basically, I found that during investor presentation of [indiscernible] that they are expanding their pre-engineering business, and they are doing a heavy CapEx. So are we having any plan in the back of our mind to cater to that segment because steel tubes is a major component in this segment.
I could not hear you properly. You mentioned about CapEx in Jharsuguda, is that regarding Jharsuguda?
No, sir. Actually, my question is different from our company's business. See, sir, I'm asking that pre-engineered business is growing at quite a steady rate, and they are doing heavy CapEx. And steel tubes is one of the major components in pre-engineered business. So are we having any plan to cater that segment?
The steel pipes?
Sir, actually, I want to ask if we are having any plans of doing CapEx for catering demand of pre-engineering business companies.
Preengineering? Preengineering with prefabricated. You mean to say that prefabricated [ shelves ]. The preengineering...
Yes, sir.
Manufacturing of steel pipes, a lot of it is used in building materials to construct warehouses, to construct a lot of buildings or so. As a matter of fact, even our warehouses in Jharsuguda are all made from steel pipes only. So through our dealer network, we do supply to a lot of building -- preengineering buildings. We ourselves do not want to jump start into a different vertical, which is of [indiscernible]. We are using a lot of [indiscernible] in-house. Our -- a lot of our guest rooms are also made using prefabricated material, our own pipes only. But not exclusively, extensively to use prefabricated engineering, because that requires a different vertical. We want to first see the vertical and the new segment and the new area that we have opened up, which is the Northeast of India. So once we streamline that, maybe in the future, we could look into [ PE/PB ] section. But as for right now, we want to concentrate that we capture the market of North East for steel pipes as quickly as possible. That is our first target that we have for quarter 2 and the remaining of the year.
[Operator Instructions] The next question comes from the line of [ Rooshin ] from [ Scoop Investment ].
So sir, I have a question regarding the new CapEx plant that you have commissioned. So sir, what will be the peak revenue potential at the current asset from that CapEx?
The installed capacity is very similar to our plants in Maharashtra and Telangana. It has the same installed capacity. Since it is newly opened, although we have a lot of inquiries already lined up from our existing dealers, many of our existing dealers in Maharashtra and Telangana have offices also in Kolkata, in Bhubaneswar, in Raipur. So they have shown a lot of enthusiasm and a lot of inquiries we are getting for the pipe products. So we are hoping to reach all of their demands within this quarter 2. It should eventually be able to reach the levels of rest of our 2 units, one in Maharashtra and one in Telangana. So we are putting all our effort towards capturing as much market share as possible in this new region where we've put up our new plant.
I want to ask about the total cost of that CapEx.
I don't have the exact numbers right now, but we furnished all this information.
Can you tell what was the overall capital utilization, overall?
We have our CapEx that we've installed is INR 120 crores. That is the CapEx of the new plant.
The overall capacity utilization?
Capacity utilization is yet to be determined because it's only our first month, but we got the electricity. Capacity utilization in very early to established because it is our first month only of our [indiscernible]. But the installed capacity is along the line of Maharashtra and Telangana somewhere around 100,000 to 120,000 tonnes per annum.
[Operator Instructions] Ladies and gentlemen, as there are no further questions from the participants, I will now hand the conference over to Mr. Vibhor Kaushik, Managing Director from Vibhor Steel Tubes Limited for closing comments.
Thank you for joining this conference call. It looks this year appears to be very promising, because as opposed to last year, we do not see a lot of fluctuation in the raw material price. And now that we are in quarter 2, after Diwali, generally, the prices are expected to rise. The trends that there are for raw material coming in from China and from other imports, it appears that this year should be very healthy in terms of our margin realizations. And also the demand has been very steady. The orders intakes have been quite steady. And with our new plant in Jharsuguda, we should be able to gain a lot of presence in India as an entirety. Now we have [indiscernible] and Gujarat catered from Sukeli, from Nagothane and South catered from Hyderabad. Similarly, we are very optimistic and very positive that we should be able to capture a lot of market in Northeast, a lot of market in West Bengal, in Odisha, in Raipur and also some parts -- southern parts. So we are viewing this as a very promising year, and it should lay a foundation to a very successful and very bright future for this organization in terms of achieving a new turnover and also in terms of achieving the new markets, which we have not been able to tap over these years. With that note, I thank you, everyone, for being a part of this conversation. And thank you very much for joining us.
Thank you, sir. Ladies and gentlemen, on behalf of the Vibhor Steel Tubes Limited, that concludes today's session. Thank you for your participation. You may now disconnect your lines.
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