Vardhman Special Steels - Multiple Levers To Unlock Growth In Near-Term: HDFC Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .HDFC Securities Retail Research.Vardhman Special Steels Ltd. is among India’s leading steel bar producers for automotive applications. It caters to various sectors such as engineering, automotive, tractor, bearing and allied industries. The company is a part of Vardhman Group, whose flagship company, Vardhman Textiles Ltd. is the largest shareholder in Vardhman Special Steels (~60.8%). The company is expanding its capacity to 2.3 lakh million tonne by FY25 from current level of two lakh million tonne, which will mainly be funded through equity infusion and internal accruals. Increased capacity coupled with higher operating margin of ~10-11% will improve the net cash accruals in the near term, which will be sufficient to cover the future annual net debt obligations. The management focus on value added steel business, high capacity utilization (~95%) and considerable backward integration (~90%) should drive growth in operating income and improve profitability over the medium term. Susceptibility to fluctuations in raw material prices, exposure to cyclicality in demand in the automotive industry and rising competition are some of the key risks to watch out for..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Vardhman Special Steels - Multiple Levers To Unlock Growth In Near-Term: HDFC Securities

The mgmt focus on value added steel business, high capacity utilisation, considerable backward integration should drive growth.

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