IFGL Refractories Limited — Investor Meet, 18-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** IFGL Refractories reported total income of ₹257 crores for Q2 FY'25, a 2% year-on-year decline. However, total income for H1 FY'25 rose by 2% to ₹506 crores. EBITDA decreased to ₹33 crores with a margin of 13%, while H1 FY'25 EBITDA stood at ₹78 crores (15% margin). Profit after tax (PAT) for Q2 was ₹13.7 crores, and ₹35.7 crores for H1 FY'25. Consolidated income fell 10% to ₹415 crores in Q2, with H1 total income at ₹837 crores (down 6%). The consolidated EBITDA was ₹37 crores for Q2 and ₹90 crores for H1.

**Future Outlook and Growth Drivers:** Management is optimistic about a rebound in global steel demand in 2025, particularly in India, where steel demand is projected to grow by 8%. The company has established a joint venture with Marvels International Group and Marvel Refractories for a ₹300 crore greenfield facility, enhancing capabilities for nonferrous sectors.

**Order Book and Operational Updates:** Domestic operations have thrived with a 15% increase in revenue for the quarter. Progress includes the completion of land acquisition for the Odisha facility and the establishment of a casting flux granules production unit in Visakhapatnam.

**Analyst Q&A Insights:** During the analyst Q&A:

- **Revenue and Profitability:** Management clarified that revenue loss was primarily due to the restructuring of a major client and competition.

- **Market Position:** The firm expects to leverage relationships with major steel producers for future growth.

- **Operational Challenges:** Supply chain issues and rising raw material costs have pressured margins, yet the company maintains a 15% EBITDA guidance.

- **Capex and Allocation:** Plans for the new JV remain within an estimated ₹150 crores capex, maintaining a balanced debt-to-equity strategy.

- **Strategic Priorities:** Focus on technology and product development to drive domestic sales.

**Market or Regulatory Updates:** Though facing economic pressures, management anticipates a recovery in overseas markets alongside strategic focuses on growing the nonferrous sector and domestic capabilities.

**Strategic Focus Areas:** A commitment to innovation, including the establishment of facilities aimed at import substitution in the nonferrous market, signals strong strategic intent.

**Investor Insight:** Given the company's strong domestic growth, manageable cash position, and potential recovery in demand, the current environment suggests a favorable outlook. However, investors should monitor margin pressures and geopolitical conditions influencing overseas markets. The overall sentiment leans towards a ‘buy’ positioning as the company prepares for recovery in H2 FY'25.