Mr. Radhey Shyam Jalan, Chairman and Managing Director, analyses how K
I C Metaliks Limited is growing in a sustainable way towards an agile future.
Did the company's management express satisfaction with its operation
throughout the reviewed fiscal year?
It was a great pleasure for our executive team to share exceptional
financial results for the year under review. We recorded operational revenues of
74,927.09 Lakhs over the year, and a Profit After Tax (PAT) of 1,854.64 Lakhs. Though
our record-breaking topline was certainly noteworthy which helped us to seize a growth of
44%, but what truly added to our success story was the Production of Hot Metal during the
year which increased by 38.79%. During the year, our Earnings Before Interest, Taxes,
Depreciation, and Amortization (EBIDTA) stood at 5,574.87 Lakhs.
What reasons accounted for the sustainable growth?
In an industry like ours (steel), where market cycles predominantly
dictate our outcomes, we maintain that a significant part of our progression is a direct
outcome of our capacity to create surpluses internally. Over recent years, we have
fortified this inward-oriented strategy with an enhanced display of our singular corporate
strength, one that we immensely value - our culture of enthusiasm and strategic planning.
At K I C Metaliks, our unique commitment has been a constant feature of
our daily operations. In a sector where outcomes are mostly beyond our control, we
maintain our conviction that our true source of stability is the undivided attention we
provide to our product domain, our continued pursuit of quality and operating efficiency.
Our company firmly believes in the crucial role of passion and
planning. Given our long-standing experience as a multi-decade enterprise, our
concentration remains on a singular product - foundry grade Pig Iron. Our dedicated
customer base, consistent repeat orders and strategic planning have enabled us to achieve
significant growth. This has, in turn, contributed to the comprehensive value accrued by
our shareholders.
How did this passion and planning play out in your Company in 2022-23?
I am proud to state that this is the area in which K I C
Metaliks distinguished itself. In the past half-decade, the Company has strategically
allocated its finances towards the consistent enhancement of its manufacturing
infrastructure, implementing modern technology advancements. This has ensured adherence to
foremost productivity benchmarks, resulting in amplified operational efficacy and product
quality, as substantiated by the recent initiation of the Pulverised Coal Injection (PCI)
facility. This, coupled with boosted oxygen enrichment, will augment hot metal output
while making the Company more financially competitive.
How did these initiatives translate into improvements?
I am pleased to report that the by-product of our passion was the
ability to address the emerging requirements of the industry. We trained our people to
look for areas of under performance with the singular passion to remove blockers and
enhance efficiency; we continued to believe that whatever was good could be made better;
we encouraged the mindset that behind every challenge lies attractive opportunity.
In doing so, we manufactured superior Pig Iron grades with consistently
high quality. We delivered products around a superior value-price proposition. We
delivered products just when the downstream user industries needed them. Thus, during the
year under review, the Company manufactured 1,61,856.89 MT of Pig iron, which translated
into 72.03% capacity utilisation.
How would you describe your performance during 2022-23?
During the year end 2022 when the entire industry was witnessing a
balanced phase of growth we took a differentiated approach through planned shutdown and
upgradation of the Blast Furnace with a capex of around 3,547.00 Lakhs which was
completed during the Mid of April 2022.
Even as this transpired, raw material costs increased faster than hot
metal realisations, which squeezed our EBIDTA margins by 36.94%. However, this downtrend
will soon correct; with rising realisations added to a full year's working of our
upgraded Blast Furnace capacity, we expect to grow profits and profitability over 2023-24
and beyond.
Efficiency improvement has always been an ongoing process at our
Company to improve realisations, we have strategically also focused on the long-term
security of raw materials to offset any input cost volatilities. Over the years our
backward integration measures by installing the Sinter Plant and the Captive Power Plant
and their upgradation transpired into higher realisations of today. As a result, the
Company's net operating profit and net profit after tax margins stood at 5.83% and
2.48% respectively.
The Company's networth stood at 17,780.34 Lakhs at the end of
March 2023 and the Earnings per share for the full year from continued operations was
5.22. The figures may not be impressive when we reported an encouraging top-line but the
volume growth in 2022-23 should offset cost-push inflation and sustain our margins in the
long-run.
How is the Company focusing on people and the planet besides chasing
profits?
At K I C Metaliks we have always held the belief that the viability of
our Company depends on our ability to safeguard our area of operations from emissions and
effluents. With the aim of fully complying with numerous regulatory requirements and
broadening our sustainability horizons we are laying our focus on the principles of
Environment
I am pleased to report that the by-product of our passion was the
ability to address the emerging requirements of the industry.
Sustainability, Social Sustainability and Governance Sustainability and
trying to abide by them. This would help us to create a futuristic roadmap to implement it
with full heart and soul in the years down the line to benefit the people, plant, and
processes involved in our value chain.
How do you see the domestic steel industry shaping?
The growth story for India remains intact despite global headwinds. The
Indian Steel Association (ISA) is forecasting a 7.5% growth in steel demand in FY 2023-24
driven by strong infrastructure spending and consumption-led demand. The association also
expects a 6.3% growth in steel demand in FY 2024-25. The Indian government's measure to
steeply lift capital expenditure in the union budget of 2023-24 is expected to drive road
and railway infrastructure and increased investment in government housing projects is
expected to underpin steel demand growth this year. Furthermore, steel demand will also
receive a boost from investments in infrastructure, renewables and mining as well as
within the steel sector through the production linked incentive scheme.
How is the Company accelerating towards the future?
We aim to be one of the top five Pig iron manufacturers in Eastern
India in the near future and all our investments and strategies are aimed towards
achieving this transition. The capital expenditures we have made over the last few years
mean that we are more agile and stable. These investments, coupled with process
improvements, also mean we are well prepared to handle more volume and are well positioned
to cater to the growing demands.
What is the outlook for the years ahead?
At K I C Metaliks, our out performance is derived from our strategic
focus to be a low cost Pig Iron manufacturer with a growing systemic integration on new
technologies and processes. In a bid to extend our value chain, we intend to explore new
opportunities and establish our status as a multi-product Company. In line with these
statements of intent, we expect to possess one of the highest Pig Iron manufacturing
capacity in Eastern India. We believe that the implementation of these capacities and
delivery of revenues will not only enhance our profits but will also enrich our
organisational value.
We aim to be one of the top five Pig iron manufacturers in Eastern
India in the near future and all our investments and strategies are aimed towards
achieving this transition
Through stable and agile operations, we have been achieving milestones.
At K I C Metaliks Limited, throughout our journey spanning more than
thirty-five years, we have always strengthened our endeavours towards transforming
ourselves as a quality centric manufacturer of intermediatery products for the steel
industry. We have always managed to ensure that our consistent and untiring efforts result
in a positive outcome for our stakeholders.