RAJRATAN - Rajratan Global Wire Ltd Share Price

Management provided an optimistic outlook for Rajratan Global Wire Limited, highlighting a significant revenue growth of 20% in Q2 FY26, driven by strong volume performance in both Thailand and India. They reported an EBITDA nearing Rs. 40 crores, with production surpassing 32,000 tons in a single quarter. The company's Chennai plant has gained numerous approvals, contributing to improved export traction.

Key major forward-looking points include:

1. The management aims to achieve a total export of approximately 40,000 tons in FY27, building on current monthly exports of around 2,200-2,300 tons (1,200 tons from Thailand and 1,000 tons from India).
2. Realizations have increased by Rs. 6,000-7,000 per ton in India and Rs. 10,000 per ton in Thailand, attributed to maintaining competitive gross margins amid softer raw material prices.
3. The company's vision is to reach a production level of 180,000 tons with a top line of Rs. 2,000 crores in three years, factoring in market inflation.
4. For the Chennai facility, a CAPEX of Rs. 20-25 crores is planned to enhance capacity, targeting 60,000 tons over time.
5. An expansion into wire rope production is underway, with a total investment projected at Rs. 70 crores for this project, expected to come on stream by the first quarter of FY27.

Management reassured that the company is positioned well against domestic competitors, with plans to leverage increased capacity and strategic positioning in markets. Overall, they expressed confidence in future growth potential, emphasizing improved performance trajectories.

1. Question: "Can you highlight what was the export volume from Chennai in the first half of "˜26 and what is the total target of "˜26 and "˜27, and what are the primary markets that we are targeting?"

   Answer: Currently, our total export is about 2,200-2,300 tons per month, split into approximately 1,200 tons from Thailand and 1,000 tons from India. From Chennai, we export about 500 tons. Our target is to reach around 40,000 tons in the next financial year, FY27, focusing mainly on Southeast Asia and Europe.

2. Question: "Are these realizations sustainable, and what should be the sustainable number you feel we can achieve?"

   Answer: While I cannot confirm the higher realization numbers, I believe our current gross margins are sustainable due to softer raw material prices. There may be some pressure if prices fluctuate, but we are presently operating competitively in the market.

3. Question: "What is the status of imports from China in both India and Thailand, and how competitive are we?"

   Answer: In India, there are minimal imports from China due to regulatory barriers. In Thailand, we are competing profitably with Chinese imports, indicating our established market position is strong despite competition.

4. Question: "What is the outlook for non-auto business opportunities for bead wire in overseas and domestic markets?"

   Answer: Currently, there are limited non-auto opportunities for bead wire; our primary focus remains on exporting bead wire, while we maintain some ongoing business in the non-tire sector in India.

5. Question: "Can you provide insight on export volumes to premium customers in the US and Europe?"

   Answer: We have transitioned into supplying bulk quantities to multiple premium customers, with one Japanese MNC, for example, purchasing approximately 3,000 to 4,000 tons monthly, of which we currently supply around 5% to 8%. Therefore, significant growth potential exists.

6. Question: "Have any senior management hires been made to enhance exports or penetrate the Korean market?"

   Answer: We decided to shift focus away from the over-competitive Korean market to other customers, resulting in better growth trajectories in Europe and America, where approvals and scaling have progressed faster.

7. Question: "Given that the utilization in Thailand is at 90%, are there plans to increase capacity there?"

   Answer: We are currently engaged in de-bottlenecking measures to increase capacity by about 10%. However, there is no scope for further expansion due to spatial constraints at the Thailand facility.

8. Question: "What is the expected capex for the second phase of expansion in Chennai?"

   Answer: We plan to invest Rs.20 to 25 crores to enhance capacity to 60,000 tons within a year, with equipment deliveries scheduled in phases throughout the next fiscal year.

9. Question: "What is the guidance for revenue growth in the next two years?"

   Answer: We aim for volume growth of 15-20% over the next year, similar to this year's growth, ensuring top line growth aligns with volume increases while simultaneously navigating prevailing market dynamics.