Steel and pipe manufacturer Prakash Industries reported a 45% jump in fourth-quarter sales and a 140% improvement in its operating profi, largely due to a steady improvement in steel prices.
The company had sales of Rs 910 Crores and EBIDTA of Rs 210 Crores for the March quarter.
With this, the full year sales is at Rs 2,935 Crores and EBIDTA at Rs. 596 Crores, up by 35% and 125% respectively.
For the coming year, the company said its revenue is likely to grow over 60% to around Rs 4,700 crores with improved EBITDA margin of around 25% owing to expansion, higher utilisation of capacities, better sales realisation and start of mining operations at its Sirkaguttu Iron Ore Mine in Odisha this quarter.
Revenue from its steel business contributed Rs 837 cr out of the total of 910 cr.
Steel revenues were up sharply from Rs 652 in the preceding quarter and Rs 626 cr in the year-ago quarter.
Power revenue too jumped to Rs 173 cr from Rs 103 cr a year ago, while PVC revenue grew to Rs 73 cr from Rs 72 cr a year ago.
In terms of profit (before taxes and interest), the power business was the largest contributor at Rs 148 cr, followed by the steel business at 22 cr and PVC at Rs 9 cr. A year ago, the power business had contributed only Rs 53 cr, while the steel business had chipped in just Rs 3 cr and the PVC business just Rs 7 cr.
“The Steel industry is in the midst of multi- year up-cycle driven by higher spreads,” Prakash Industries said.
“Presently, the sales realisation of the company (from steel) is at all-time high, as the prices have improved by over 30% from the level of April, 2017,” it added.
The company said has undertaken expansion plans to increase its Integrated steel plant capacity from 1.20 Million tonnes per annum to 3.00 Million tonnes per annum over the next 5 years through Internal accruals at its existing location in Champa, Chhattisgarh.
The company successfully commissioned 0.20 Million tonnes per annum Sponge Iron Rotary Kiln alongwith 15 MW Waste Heat Power co-generation in April, 2017.
In the current year, the company is expanding the capacity of Sponge Iron Plant by 0.40 Million tonnes per annum, out of which half will be online by September. It will expand power co-generation capacity by 30 MW.
The company said it plans to double its PVC Pipes and Fittings production capacity by next year.
Prakash Industries, via its newly ventured Flexible Plastic Packaging business, will also start manufacturing high performance barrier films and laminates that find application in packaging of food, beverages, oil, personal care and pharmaceutical products.
“Production is likely to commence by June, 2018,” it said.
The Demerger of the PVC Pipe business is progressing fast as NSE & BSE have already conveyed their consent to the Draft Scheme of Arrangement and other clearances are in progress, it added.
The Company had issued Convertible Equity Warrants (Warrants) to the Promoters of the Company for a total amount aggregating to Rs. 208 crores. Promoters have since subscribed to the Warrants. Further, in view of higher Internal Accruals and funds being raised through Preferential Issue of Warrants to the Promoters, it said it “does not envisage raising of funds through Qualified Institutional Placement (QIP)”.