Vesuvius India - Focus On Aggressive Capacity Expansion: Systematix

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. .Systematix Research Report.Analyst meet takeaways: We return positive post our meeting with the management of Vesuvius India Ltd.After a decade of almost nil addition to gross block (post depreciation) Vesuvius India doubled its gross block in CY22 and is looking to incur major capex for the next two-three years. Vesuvius India’s major shift in focus appears to be driven by the need to catch up with market growth and a more aggressive stance by its key competitor RHI Magnesita. The latter has taken significant strides in India by merging unlisted entities and through inorganic acquisitions. We believe Vesuvius India has the necessary technological edge in a niche steel consumables segment, which forms a critical part of the steel manufacturing ecosystem. Vesuvius India enters service contracts along with sale of refractories and offers performance guarantees, etc.; it has significantly deep long-term engagements with the steel producers. The company has asset turns of about three times, which implies near doubling of topline over the next three-five years, with Ebitda growth likely tripling from the current level. Vesuvius India is an interesting play on India’s steel sector, which is poised to double its steelmaking capacity by 100% over the next decade to 300 million tonne. Vesuvius India is also not much impacted by the likely push for decarbonisation, as even if steel is produced by increasing electric arc furnace based technologies, the demand for refractory is unlikely to be impacted..Click on the attachment to read the full report:.India's Private Capex Announcements In FY23 More Than Double From FY19: Nirmal Bang's Thematic View.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.

Vesuvius India - Focus On Aggressive Capacity Expansion: Systematix

New capacities are for local markets and not exports.

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