JTL Industries (NSE:JTLIND) Q1 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to the JTL INDUSTRIES LIMITED Q1 FY 'twenty seven Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to miss Neha Talreja from Noovama. Thank you, and over to you. Thank you, Ananya. Good afternoon, everyone. I warmly welcome every three to JTL INDUSTRIES quarter one FY twenty seven earnings conference call. On the management side, today, we have with us mister Pranam Singhla, executive director mister Bruce Singhla, executive director and mister Naveen Laroia, CFO. Without taking any more time, I will now hand over the call to mister Naveen. Sir, over to you, sir, for your opening remarks.

1:03 Good afternoon, everybody. This is Naveen Leroya, CFO of JTL INDUSTRIES LIMITED. I thank you all for joining the earnings conference call of JTL INDUSTRIES LIMITED to discuss the performance for quarter one of financial year twenty five twenty seven, sorry. We appreciate your continued support and interest in our company. The company achieved its highest ever quarterly revenue from operations and EBITDA in Q1 FY27. Revenue from operations reached INR $7.22 crores, while EBITDA was INR 59 crores with a margin of 8.1%. Profit after tax for the quarter was INR 35 crores with a margin of 4.9. That of INR 35 crores is after INR 2.8 crores of additional noncash depreciation arising from the March 2026 asset revaluation at JTL DEFENSE LIMITED, erstwhile RCA Industries and Technologies Limited.

2:06 The company has reported a sales volume of 118,513 metric tons during Q1 FY twenty twenty seven, reflecting 17.8% year on year growth. Operational revenue per ton increased to INR6882, while operational EBITDA per ton without other income improved to INR4954 per metric ton, supported by an improved product mix and continued focus on operational efficiencies. During the quarter, the company continued to strengthen its presence across key end user industries through its value added product portfolio. EFT's sector sales by its continued to gain acceptance across the dealer network and industrial applications supported by improved production and capacity utilization at the Mangao facility.

2:53 The quarter also marked progress in strengthening the company's presence in the water infrastructure segment with the receipt of INR 27 crores order for the supply of galvanized iron pipes for water supply and distribution projects in Himachal Pradesh. This order reinforces the company's capability to cater to institutional infrastructure requirements and further strengthens its position in the domestic market. The company continues to focus on improving operational efficiencies, expanding the contribution from value added products and strengthening its presence across domestic and export markets, Supported by its integrated manufacturing platform and diversified portfolio, JTL INDUSTRIES remains focused on creating long term value through disciplined execution and sustained operational performance.

3:43 With this, I would now request the moderator to open the floor for questions and answers. Thank you. Thank you very much. We will now begin with the question and answer session. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Lukesh Kashikar from Smith Institutional Equities.

4:49 Yes. Hi. Congratulations, sir, on the very good set of numbers during the quarter. A couple of things, couple of questions from my side, starting with EBITDA. In this quarter, the EBITDA burden was around 5%, And it was elevated better than guidance. So just wanted to confirm, is there any one off like inventory carrying gains? Or it is just a function of end order mix? That's the first question from my sir. Hi, Rakesh. Thanks for the question. So if you consolidate the data per ton, so this includes the consolidation of JTL Defense as well. So JTL Defense contributed close to 200 addition in the data per ton, Barring that, the EBITDA per ton was at around $40.70 level, which was again a growth as well.

5:41 And as we mentioned that this year's target for us is to maintain the EBITDA around INR 2,500. So we are well in fact to get the guidance and the only competition added was JTL defense. And so what will be the guidance? It would be closer to... On the consolidated level, it would be around 4,000,500 to 5,000, or how it would be? So given the normalized situation of HRC right now, so we are confident that the forty seven fifty EBITDA per ton in JTL still using 5% is something is that we can see in the coming quarters as well. There is upward trajectory that we foresee ahead as well. So we are very confident that consolidated 5,000 crores is something that we'll definitely achieve in the coming quarters as well.

6:36 Sure. And sir, secondly, what was the EBIT what was the value added during the quarter? And what was the export component to the overall mix? So the value added composition was again close to 35%, what we've been doing in the past as well. They were slightly different exports this time. That was majorly because of the container shortages happening all over. So exports were at 5% this quarter. Going ahead, we have a healthy order book of exports. Actually, of the biggest order books of exports right now we have in our hands. But because of the whole situation, there has been some lag in dispatches. But going ahead, we cover everything. Sure, sure. And sir, last one, just checking on the volume growth guidance. Earlier, you have added for around 30% volume growth for FY 2017. So that remains intact?

7:32 Definitely, that remains intact. So if you I did not pass the trend. So my H2 is usually stronger than H1. Given that I do similar kind of volumes, actually higher kind of volumes than what you didn't... Done in q one. And if you do a 20% growth over that, so we will anyways cross the 30% guidance as well, but still 30% something that we'll definitely achieve. But our aim will be to deliver more than that as well. Sure. Sure. That's it from my end. Thanks. Thank you very much. The next question is from the line of from. Please go ahead. Hello.

8:20 Hi. Hi, management. Hi. I just wanted to know a little bit about the Mangalore facility. And are we in track to for its completion by H1? And how much has been the utilization in the first quarter for the same facility? So the utilization of the Mangang facility is about 42% right now. Going ahead, we are very confident to achieve the desired capacity of addition of close to million tons by end of h one. And right now, overall level, like the company level, we are operating at 50% level. And by year end, this level should be close to 65%. So as I mentioned that you should see better h two. So this will because this will be because majorly led by the utilization increase at one facility.

9:13 Over there, we are doing close to 70% of 10,000 tons of DFT right now, which has a huge space to grow. In fact, that will come here as well. So once we do that, once we start to achieve that, our utilization level from the plant itself will touch 60%, and the utilization will increase and so will the margin coming from the management facility. Thank you. Thank you so much. Kyle, I just also wanted to touch upon the export, I think you mentioned that we have the highest ever export order books currently. Could you speak more in terms of what has happened in exports and give me...

9:58 And give us some more flavor on it? Yeah. Hi, Shavit.. On the export side, due to the issues in hormones and the lack in availability of containers and transportation there was, the first quarter was a little bit in that aspect. But having been said that, in the recent times, we've we've been awarded different affiliations to... Like ACRS, and we've also started some sports to The Americas. So we've had good interest from there. And currently, we have a good order book for exports to to take care of that.

10:45 If the situation of logistics improve, we shall cover up this lag in first quarter, the second one. And to quantify, we'll be the earlier mentioned target of 10% of total sales to exports is something that we'll target for the coming quarters as well. The sum lag in 5% will be accounted for in the coming quarters. I understand. Could you also give me the CapEx outflow that you've planned for FY 2017 and 2018? So for this year, the CapEx outflow is close to 100 crores, and this will be completing our entire CapEx leftover. After that, there will be only CapEx of INR 30 crores, 40 crores every year at max happening.

11:35 But the remaining INR100 crores of CapEx will complete our entire journey to 2,000,000 tonnes. Thank you. The next question is from the line of Jatin from Nuwama. Before that, ladies and gentlemen, it's a reminder for all participants, please press star and one to ask a question. Participants who wish to ask a question, please press star and 1. Jatin from. Please go ahead. Hi, Dean. Good morning. So I've got two questions posted on JTL. So coming to guidance, are we maintaining our guidance at 200 crores of top line and 6,000 tonnes? And I believe EBITDA margin guidance was at about 10 to 15% versus that.

12:31 Sorry. Can you please repeat the number that you said? Can you repeat once? Hello? Ladies and gentlemen, we have lost the line of the last participant. It's a reminder for all participants, please press star and one to ask a question. The next question is from the line of Nishita Shanklish from Safia Capital. Am I audible? Yes. Yeah. So I just... So currently, our capacity is 1,000,000 ton.

13:19 And you mentioned that, like, after our total CapEx of 100 crores is done, we'll reach the capacity of 2,000,000 tons. So how fast can we ramp up this capacity, and is it going to come in phases? Yes. So the capacity is going come in phases. The ramp so if you talk about the full million tonnes, out of this seven lakh tonnes or close to seven lakh tonnes shall be commissioned by H1N. And the remaining three lakh tonnes will be commissioned by next year around this time, and that will be of API pipes that we already announced before. And if you talk about the ramp up, the ramp up will take some time, although you will see some contribution of the new capacity happening every quarter. But the full utilization levels will be met by FY 'twenty nine.

14:10 And on that whole capacity, we should achieve plus of the 50% to 55% utilization levels in FY 'twenty nine. So if you talk about You say in FY '29, we can reach 50... 60% utilization level. 50 to 60% utilization level. It's too early for us to comment right now because it depends how... In which quarter the full capacity completed for the remaining last three lakh tons of API types. So that will be a key thing to know... Note and tell that when exactly can we see the. So the total capacity, like, we can assume will be commissioned in FY '28 and by FY '29, you can reach the utilization of 50%, 60%.

14:57 That's correct. 60%. Yes. 50% to 60% in FY '29. Right. Right. Okay. And, like, what will be the... At peak utilization? I'm assuming the peak utilization to be of 75%, 80%. What is the total revenue that we can expect? The peak utilization that we can achieve is close to 70%. So that is something that we target in FY twenty nine itself as well, as I mentioned. But it is very subjective how far the CapEx is completed of the last leg. So 70% is something that we reach at peak. That can happen as soon as f a twenty nine as well, and that can happen as late as f a thirty. Okay. And the revenue potential at peak utilization,? Sorry? The revenue potential at peak utilization.

15:45 So right now, the utilization per ton is close to INR 6,000. As we are pouring into value to products going ahead, we can expect the decision to increase from INR 6,000 to INR 65,000, 66,000 going ahead. So around on the peak levels of 70%, if you do, so about 1,400,000 tonnes into INR 65,000 is something that could be the peak revenue Okay. From the current CapEx cycle. Okay. Understood. Thank you so much. Welcome. Thank you. Ladies and gentlemen, reminder for all participants, please press star The next question is from the line of Jatin from Numamo.

16:40 Hi. Apologies for earlier. Continuing on the question earlier. My question was on JTL. So the guidance, I believe, we had was top line of INR100 crores and volume of 6,000 tonnes. Right? And EBITDA margin that 10 to 15%, are we maintaining that? Hi, JTLIND. So this guidance is not for this... The volume guidance is is not for this year. Although the top line is something that we're still trying to achieve, and we'll be touching those to 150% top line on that. Right now, given the run rate of q one, we were at about 100 metric tons a month, and we've already reached a 100 of one twenty metric tons a month in this quarter. In this first month, we did close to 120 metric tons of sales in Q1 first month of this quarter.

17:25 So we are expecting by exit quarter, we'll be touching 500 tons close to 500 tons of sales in defense by that time. And the guidance on the margin over there, so q four was a exceptional quarter in that because of... Led by no entry gains in which we did 20% EBITDA margins. In Q1, we had about 12% EBITDA margin in defense. Going ahead, it's too soon again to maintain the exact 15% margin going ahead, but the long term margin is 15%. But for now, it can be reeling around because it's a new setup for us, a new industry for us. So a lot of things are being tested over there and a lot of things are being planned differently as well. So...

18:12 But 10% to 15% is something that you will achieve in the long term proposition. Understood. Understood. The second question is coming to growth. I mean, would you be able to quantify, I mean, how much of the growth volume would have come up from the new capacities that are ramping up? And how much does it come from the market share gains that you've been getting from filling the channel inventory? If you can just give us a break up with it. So as I mentioned that earlier, we were doing close to 10,000 tonnes of DFT a quarter. From that, we have almost doubled ourselves and we are close to 20,000 to 25,000 tonnes of DFT a quarter right now. So there is new capacity, which is playing the role as well.

19:00 And also, we are gaining share in the segment as well because we are getting paneled in a lot of places in Maharashtra itself. And in export market as well, there is a good demand for DC sections. We have opened our borders to USA as well and Mexico as well and Canada as well. So all these places, DST is being exported as well. So there's a bit of market share gaining happening and there's a mix of new is opening as well. Okay. Thank you. That's all from my end. Thank you. Please press star and one to ask a question. Participants who wish to ask a question may press star and 1.

19:47 The next question is from the line of from Abankas, asset manager, Private Limited. Please go ahead. Hello, sir. Good afternoon. Good set of numbers. My question is on the demand side. How is the demand panning out for various sectors at the moment? How do you see it going forward? Hi. You said demand panning out from... I I could not hear the last part. Sorry. Yeah. How is the demand panning out in terms of various sectors, your industry? So I was asking. Yeah. So see, there is a good demand. Firstly, there there is a difference between the primary and the secondary products. So there is a good demand in the secondary product at the moment. It's, say, record breaking demand in secondary product.

20:38 So that is one aspect of it because the difference is there. And the primary product wherein we have gained a market share in DFT, we have gained a market share in specialized products from low high thickness replacement of seamless pipes, making some thicknesses as replacement of seamless pipes. So these areas, we are actively gaining ground on with direct supply to OEMs also and also then the dealer network. So these products are something not everybody is doing and only a few handful of us are doing in India.

21:25 Earlier, it was imported a lot. So these are the markets that we are gaining active share in. And we have gotten a lot of good response in this area. With time, we've also decided that how we we are able to deploy these products into areas such as replacement of the, say, senior price in hydraulic segments and in automotive segments wherein the price sensitivity has come, but... And also they need higher grade materials which perform better. So we... We've been able to penetrate in that right now.

22:19 Right. So, basically, we are entering into input substitution in new areas, basically. Is that the same? Correct? Yes. Yes. And these are all value added products. So only value added products is only... Yeah. Galvanized type, but these areas are now value added products. Black form. With the black form. So so value addition proportion, which is 35% currently, how can it pan out next couple of years? Or what percentage is it go to? Because we have capacity coming in the month. How much are valuation? No. Sorry. Come again. I was asking this 35% value addition. What we are... 35%, the product mix is value added. So what you can go in the in the medium term, say, couple of years down the line? So our target is when we are getting our...

23:05 All the CRM processes also running with the the 1,000,000 to 2,000,000 tons, That is on value added product. So our target in the coming future is minimum 50 to 60% of our products will be value added. Right. Right. And how is July right now in terms of volumes? Any any color on that? So July for us was, again, all time high month. And going ahead with the run rate as well, we'll be able to achieve all time high quarter as well given the situation. So things are shaping as well as as Dhruv mentioned that there is a good gap in in primary and secondary right now as well. So because of Right. The whole situation, the secondary demand is also excellent as well. And because of this situation, we are able to we'll be probably able to live another all time high quarter.

23:58 Good to hear. And then lastly, missed the CapEx number. Can you please give it again? For FY '27 and FY '28? For FY '27, the CapEx figures will be close on a crore rupees, and that will the CapEx. And in the next financial year, the CapEx will be maintenance CapEx of 30 to 40 crore rupees at max. Got it. Got it. This is only the CapEx of industries. There can be some CapEx happening in the fence as well, so that is extra over that. But that CapEx is anyway not any sizable CapEx. It can be close to $15.20 crores going ahead as well. Got it. Got it. You for asking, and all the best. Thank you, Divam. Thank you.. The next question is from the line of Neha Talreja from Newama Wealth Management.

24:54 Please go ahead. Hi,. Thanks a lot for the opportunity. Just couple of questions from my end. While you answered on demand, could you tell us how is the government CapEx at this point of time? Are we getting any orders from Nelsus? You know, we've only been one of the beneficiaries, Or are we seeing, you know, CapEx outlay from that particular scheme happening? That's the first one. Hi,. So we... There has been a little increase in the government CapEx, not the situation what we saw two years back, but now there has been improvement and we've got some orders as well. But we as a company have made a point of having more sales over dealer network and exports. That's what our target audience right now. The government is very seasonal demand. So we are not relying on government sector anymore. Earlier, our Deiravati plant, which is a Punjab plant, we were dedicate...

25:48 We had dedicated the plant towards the government earlier. But now we shifted out of more than from there. We are keeping the dealer market as well. And it's it's just that when there are good government orders of particular sales coming in favorable to us, that time we open up to these orders. So that's why if you saw as well, like, our last year government contribution was not even 5%, which was over 25% earlier. So we've been trying to intentionally cut off our government base as well and focus more towards dealer and export market. Understood. Any dealer distribution network increase that you want to give us? The current dealer network is, surfacing with the products. The DSP product, which these... Which has been a volume pusher, is actually going to the departments, MMRDA and airport authorities.

26:41 So these are the cases where the production is going and not two dealers. Earlier, in the first quarter when we started DFT, the product was being moved to all these places through dealers. But now as we're in panel, most of most of the places are sales. So it is a direct sales that is happening over there. Understood. And lastly, what I wanted to understand was how was the primary and the secondary spread during quarter one, and what is it now, and how is it, you know, benefiting us at this point? The difference between the primary and the secondary has remained in the, say, range bound of about 8 to INR 12 in the last quarter with INR 7 to 8 being the lowest demand in the secondary product increases.

27:45 And currently, our capacity is being about 45 to 50% in the secondary market. We were able to capitalize on this demand in these quarters this quarter. So right now also the difference is similarly and there is bumper demand in the secondary market. So yes, till the time this remains, we we shall see the demand pattern being in manner. Got that. Thanks. Thanks a lot. Thanks. All the best. Thank you. The next question is from the line of Sandhya from Wealth Advisory.

28:30 Please go ahead. Oh, hello. So am I audible, sir? Yes. Sandhya, you're audible. Okay. So first of all, sir, congratulation on this strong quarter. So I had a couple couple of questions here. So can you just provide an update on export and which geographies are seeing the strongest traction particularly after this ACR certification? So is... You were saying... So ACR certification is majorly for Australia, and the traction from the certificate is majorly help us gaining market share in Australia itself. And more than that, we have been opening our borders to US, Mexico... US and Mexico as well. So that has been a market where we've been supplying heavily as well in the past quarter.

29:25 Okay. And then, sir, our second question is on order book related. So can you just highlight how much our order book we have and what is the timeline of execution of it? So if you talk about the export order book, we have plus for the 75 crores of order book of exports right now. And if you talk about the normal order for the company, a quarter order book is something that usually moves around and we work with. So that's the kind of order we still have right now. So it's... That... That's about the order book situation for now. Can you just quantify? So a lot of of order book is something that's always in... It's that... It's a moving market in which Ma'am, it's a dealer network market. So when when we say that we we are the dealer network contributes for 50 to 60% of our entire sales, The the order book dealer is not on a daily... It's on a daily basis rather than on a fixed day basis.

30:24 So we tend to sell to our dealers on a daily basis. That... That's how it is. But if it's... If you if you quantify the export orders and all that, we can quantify because that is a longer delivery period order. In in the in the local market, we have to deliver with between ten to ten days, and that is how order book keeps on changing on a daily basis. K. And And how should the investor think about the working capital and cash conversion as sales volumes continue to increase? The working capital cycle has been improving of the company. So we were about ninety days earlier, which has come down this quarter.

31:12 And it's about seventy four days right now at this quarter. And going ahead, we are opting for dealer financing as well, which will further bring down our working capital. So working capital cycle. So you should see improvement in the working capital cycle happening in the coming quarters. As I mentioned again, our working capital cycle was majorly stretched because of a government base earlier and the payments being due over there for a long while. But now as I've... We've changed that mode and focus more towards exports and dealer network, wherein dealer network, the payments are only about seven to eight days. So the working capital cycle will improve drastically to thirty five, forty days levels by... In the coming years. By FY twenty eight ten, we're targeting a working capital cycle of thirty five, forty days. Okay, sir. Thank you so much. That's it from me.

32:07 Thank you. The next question is from the line of Nishita Shanklesha from Supplier Capital. Please go ahead. Yes. Thank you for the follow-up question. I just wanted some clarification. You mentioned that by the exit quarter, you will reach close to 500 tonne of sales in defense. So does that mean that by Q4 FY 'twenty seven will reach to the 500 tonne of sales? Yes, that's right. That's right. So by the exact quarter, that's correct. We should Right. So so the 500 ton sale is the quarterly sale number or on an annual basis?

32:57 No. No. The 500 tons would be something that we'll be doing in a month in JTL Dense. So right now, we are doing close to one twenty metric tons, as I mentioned, which was the highest for us in this quarter this month, in the first month. So going ahead by fourth quarter, we are targeting that we will achieve 500 metric tons per month of sales of digital defense products. Okay. Okay. Understood. Yeah. Thank you so much. Thank you. The next question is from the line of Dhananjay Baguria from Alkamai Capital Management. Please go ahead. Hi. Hi, Joo. Hi. Just wanted to ask you guys for JTL INDUSTRIES, how much CapEx are we looking to do, and what is the strategy along those lines for JTL INDUSTRIES?

33:49 Hi,. Hope you're doing well. So the CapEx over there is not the CapEx for now. We are just entering into coin segment and bullet set... Segment. So for that, we had a few machines which require innovations and few machines between two auto new as well because the machines required in the main factory coin coin segment is something that needs to be updated quite frequently as well. And the same goes for itself. So the CapEx outflow for that kind of addition in this year would be not more than INR 15 crores, and a similar kind of CapEx would be expected in that company in the next year as well. So this capacity will not change of the company. This will change the product placement of the company. For for example, like, for now, the capacity over there is close to 12,000 tons of...

34:43 Thousand tons that we can do per month. So going ahead and when I talk about 1,000 tonnes a month, so this is the... Hot Hot pit capacity. So going ahead, this product, which we are placing to automobile segment right now and dealer segment right now, which is the copper, coils and sheets, these will be converted to bullet sales and sales and segments and also towards mint factory, which will further provide value addition to the company and bump up with the margins. So for that, 15 crores of CapEx is something that you can expect this year and similar amount in next year as well. Alright. And just to have a little broad base, I think two, three years, definitely, we would predominantly sell company. Any revenue targets or anything in the mind? Like, just, like, broad based, any idea what what it could be, how large it could be, what are we thinking?

35:36 So it's gonna be a mix of everything. I wouldn't say that it's entirely gonna be defense company. Only only be bullet sales segment because the bullet sales segment, if you talk about the cup itself, it's a program product. So it's not a thing that even if it's on volumes as well, can see quality, what I have... What's the entire capacity of plant is. So around 25, 50%, which is close to 200 tonnes is something that we can focus will go towards the main taxi, which is towards coins and segments. And 30% to 35%, which is close to three fifty tonnes of material will go towards the bullet shells and casing. And the remaining product, which is close to three fifty million tonnes, will be going towards the current dealer and automobile market. So for example, we have MINITED Corp, who is one of the biggest procurers for copper price right now. So there are lot of automotive companies we're targeting in which we're getting healthy margins as well.

36:33 So it's safe to say that 30% will be automobiles and dealer network, 35% will be defense, the remaining will be mint factories. Understood. Thank you, Parman. This is really, really helpful. Thank you. Thank you, Parman. Thanks, Tanya. Thank you. And one to ask a question. Participants who wish to ask a question, please press star and one. As there are no questions, the last question has been completed. I now hand the conference over to the management for closing remarks.

37:22 Over to you, sir. Thank you, everyone, for joining our earnings call. I hope we were able to give you the answers to your queries. If you have any further questions or would like to know more about the company, please reach out to our investigations team. Thank you. On behalf of Nuvama and JTL INDUSTRIES, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.