IMFA - Indian Metals & Ferro Alloys Limited Share Price

Management provided an optimistic outlook for Indian Metals & Ferro Alloys Limited (IMFA), highlighting resilience despite macroeconomic challenges. Key forward-looking points include:

1. Production Growth: IMFA expects ferrochrome production to increase to approximately 3.1 to 3.2 lakh tons by FY '27 and 3.6 lakh tons by FY '28.

2. Revenue Projections: After experiencing a downturn, the management anticipates an improvement in price realization, projecting a target of INR 92,000 to INR 93,000 per ton for Q1 FY '26. Previously, the average realization for Q4 FY '25 was INR 87,000 per ton.

3. Capex Plans: The company revised its capital expenditure for the Kalinganagar expansion to INR 840 crores, with an overall expected outlay of around INR 800 to 900 crores for FY '26. This includes expansions and projects aimed at enhancing efficiency and capacity.

4. Renewable Energy Initiatives: IMFA signed agreements for 110 megawatts of hybrid renewable power (70 MW with JSW and 40 MW with Ampin), expected to enhance energy security and reduce carbon footprints.

5. Expansion Projects: The company is advancing a 96,000 metric ton per annum Greenfield ferrochrome expansion project in Kalinganagar, with major equipment orders and civil works underway.

6. Cost Optimization: Ongoing efforts to improve operational efficiencies and reduce costs due to falling met coke prices are expected to yield further benefits in Q1 and Q2.

7. Market Recovery: Management noted early signs of market recovery, particularly in stainless steel production which grew by 7% in the calendar year 2024, suggesting an improving demand environment.

Overall, management is focused on capitalizing on growth opportunities while navigating the current market complexities through strategic initiatives and operational excellence.

Q1: What is our EBITDA cost per metric ton for Q4 FY '25?

Saunak Gupta: Our EBITDA cost for Q4 FY '25 is INR 76,980 per metric ton.

Q2: What is our met coke cost for Q4?

Saunak Gupta: The met coke cost is INR 15,150 per metric ton. We expect to see benefits from falling met coke prices in Q1 and Q2 of FY '26.

Q3: How has our chrome ore inventory improved over the last two years?

Sandeep B Narade: Currently, we have over 4 months of inventory at our plant sites and about 2.5 months at the mines. This is an increase from 3 months at plants and 1 month at mines last year.

Q4: What is the ramp-up production expected from the Kalinganagar smelter?

Sureshbabu C: We expect to start production in July '26, ramping up to around 50,000 to 60,000 metric tons in FY '27.

Q5: What is the capex guidance for FY '26 and '27?

Saunak Gupta: Our expected capex for FY '26 is around INR 800 to 900 crores, including projects like the Kalinganagar expansion and the ethanol project.

Q6: Why has there been a decrease in EBITDA despite a reduction in costs?

Saunak Gupta: The EBITDA drop is primarily due to lower realization rates, despite our cost optimization initiatives reflecting a minor cost reduction.

Q7: How are the renewable energy agreements structured?

Binoy Agarwalla: We've contracted 70 megawatts with JSW and 40 megawatts with Ampin for 25 years. The rates are INR 3.84 and INR 3.75 per unit, respectively.

Q8: What will be the expected average ferrochrome realization for Q1?

Saunak Gupta: While we expect some improvement, quantifying it is difficult as market uncertainty persists. However, we're looking at a realization around INR 92,000 to INR 93,000 per ton.

Q9: What will be the ratio of long-term contracts and spot sales moving forward?

M Venkatesh: We'll maintain about 80% of our sales through long-term contracts, with 90-95% exports and 5-10% domestic sales.

Q10: How will the new Kalinganagar facility impact power costs?

Binoy Agarwalla: The power cost will be at par with current costs as we blend renewable energy with existing thermal generation, maintaining efficiency.