Kalyani Steels has successfully negotiated a product price increase with 20-25% of its original equipment manufacturer (OEM) customers, the company's Managing Director, RK Goyal told CNBC-TV18. Discussions with the remaining customers is expected to conclude soon.
The Pune-based manufacturer of forgings and steel products for auto, engineering, and infrastructure spaces, reported a healthy set of numbers for the third quarter of the current financial year (Q3FY24). Its revenue grew 7% year-on-year (YoY) to ₹480 crore from ₹447 crore. Earnings before interest, tax, depreciation, and amortsation (EBITDA) margins expanded to 20.1% from 12.8% in the same quarter last year and 19.4% in the second quarter this year (Q2FY24).
Goyal said despite challenges due to rising costs of coking coal and iron ore -- essential inputs for steel manufacturing -- the company is making efforts through improved product mix to sustain margins between 18-20%.
The company's recently announced acquisition of Kamineni Steel and Power India is in the final stages, and is expected to be completed in a few months, he said.
Goyal estimates the overall capacity expansion (capex) cost that could be incurred in structuring of the new plant, including finishing, component and heat treatment facilities etc., to be around ₹5,000-₹6,000 crore.
Shares of the company have risen more than 40% to ₹713 apiece on February 7 after it announced the Kamineni Steel acquisition on January 10. The stock was trading at ₹505 apiece on January 9. Over the past year, the stock has gained nearly 124%. The company's market capitalisation is currently around ₹3,108 crore.
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