VMS TMT LIMITED

In the Q1 FY27 earnings call, VMS TMT Limited reported a 16.16% year-on-year revenue growth to INR247.88 crores, driven by higher TMT bar prices and increased sales volumes. Management highlighted the commissioning of a billet manufacturing facility, enhancing backward integration and reducing raw material costs. The company also noted a 15-megawatt captive solar power plant, with 12 MW already operational, expected to save INR10-12 crores annually in power costs. Inventory levels rose due to higher-margin product additions and seasonal monsoon impacts, but are expected to normalize post-Diwali. The proposed merger with Aditya Ultra Steel aims to expand Gujarat market presence and dealer networks. However, EBITDA declined by 41% due to rising imported scrap prices and forex fluctuations, with management expecting improvement in Q3-Q4 as market conditions stabilize. Capacity utilization for TMT bars is at 90% of installed capacity, while billet facilities operate at around 80%, with plans to improve utilization. The company focuses on tier 2/3 and rural markets, with limited institutional sales due to dealer network constraints. Management emphasized growth in Gujarat, operational efficiency, and margin improvement through integration and solar power savings.

The document presents both positive developments like revenue growth, solar power savings, and merger plans, alongside challenges such as declining EBITDA, rising raw material costs, and inventory normalization delays.