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JTL Industries to increase capacity by 2 MT by Dec in Rs 3.3 bn capex
Steel

JTL Industries to increase capacity by 2 MT by Dec in Rs 3.3 bn capex

Chandigarh-based JTL Industries, a manufacturer of various grades of galvanised steel tubes and pipes, has announced plans to increase its existing capacity of 6 lakh tonne by 2 lakh tonne. This expansion is part of a current capital expenditure (capex) project worth Rs 3.3 billion at two of its mills. According to a company official, the overall capacity expansion of 4 lakh tonne, valued at Rs 3.3 billion, is expected to be completed by FY27. Once completed, the company's total installed capacity will reach 10 lakh tonne. The immediate enhancement of 1 lakh tonne at each of the Malegaon plant in Maharashtra and the Raipur mill in Chhattisgarh will increase their overall output to 3 lakh tonne each.

During the interview with PTI, Dhruv Singla, an executive director and chief financial officer, who is also the son of the managing director Madan Mohan Singla, stated that this expansion is a debt-free investment. He further added that the company, which was established in the 1990s, has maintained a debt-free status. The financing for the expansion project comes from the Rs 384 crore raised through the issuance of preferential warrants in March.

The company currently operates four mills, namely Malegaon, Raipur, Mandi, and Derahbasi in Punjab, with an installed capacity of 5.84 lakh tonne. Pranav Singla, another executive director, mentioned that 84,000 tonne were added in 2022-23 to increase the total capacity.

Regarding the company's revenue sources, they explained that approximately half of their revenue comes from domestic retail sales, while 15 percent comes from exports and a similar percentage from government orders. Additionally, 10 percent of the revenue is generated from original equipment manufacturers (OEMs) and solar plants each. In the previous fiscal year, the company reported a revenue of Rs 1,550 crore, achieving a net margin of over 8%, which is considered a leading figure in the industry.

They anticipate that exports will increase to 20 percent in the current fiscal year, as they are about to enter the North American market with the introduction of direct forming technology (DFT) products.

The officials mentioned that the plants are currently operating at approximately 60 percent capacity utilisation, slightly higher than the industry average. They expect the plants to continue running at the same or slightly higher level, with higher volumes as the additional capacity of 2 lakh tonne comes online soon. This will result in an overall annual output of approximately 3 lakh tonne, compared to 2.4 lakh tonne in the previous fiscal year.

Regarding revenue prospects, they noted that the company typically maintains a three-month order book. However, they currently have orders booked for four months, totaling over Rs 3.5 billion, which should contribute to a projected 35% growth in revenue this year.

Chandigarh-based JTL Industries, a manufacturer of various grades of galvanised steel tubes and pipes, has announced plans to increase its existing capacity of 6 lakh tonne by 2 lakh tonne. This expansion is part of a current capital expenditure (capex) project worth Rs 3.3 billion at two of its mills. According to a company official, the overall capacity expansion of 4 lakh tonne, valued at Rs 3.3 billion, is expected to be completed by FY27. Once completed, the company's total installed capacity will reach 10 lakh tonne. The immediate enhancement of 1 lakh tonne at each of the Malegaon plant in Maharashtra and the Raipur mill in Chhattisgarh will increase their overall output to 3 lakh tonne each. During the interview with PTI, Dhruv Singla, an executive director and chief financial officer, who is also the son of the managing director Madan Mohan Singla, stated that this expansion is a debt-free investment. He further added that the company, which was established in the 1990s, has maintained a debt-free status. The financing for the expansion project comes from the Rs 384 crore raised through the issuance of preferential warrants in March. The company currently operates four mills, namely Malegaon, Raipur, Mandi, and Derahbasi in Punjab, with an installed capacity of 5.84 lakh tonne. Pranav Singla, another executive director, mentioned that 84,000 tonne were added in 2022-23 to increase the total capacity. Regarding the company's revenue sources, they explained that approximately half of their revenue comes from domestic retail sales, while 15 percent comes from exports and a similar percentage from government orders. Additionally, 10 percent of the revenue is generated from original equipment manufacturers (OEMs) and solar plants each. In the previous fiscal year, the company reported a revenue of Rs 1,550 crore, achieving a net margin of over 8%, which is considered a leading figure in the industry. They anticipate that exports will increase to 20 percent in the current fiscal year, as they are about to enter the North American market with the introduction of direct forming technology (DFT) products. The officials mentioned that the plants are currently operating at approximately 60 percent capacity utilisation, slightly higher than the industry average. They expect the plants to continue running at the same or slightly higher level, with higher volumes as the additional capacity of 2 lakh tonne comes online soon. This will result in an overall annual output of approximately 3 lakh tonne, compared to 2.4 lakh tonne in the previous fiscal year. Regarding revenue prospects, they noted that the company typically maintains a three-month order book. However, they currently have orders booked for four months, totaling over Rs 3.5 billion, which should contribute to a projected 35% growth in revenue this year.

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