Vardhman Spl Steels to hike prices again in July; targets increasing exports 5X by 2025

Vardhman Special Steels has surged in trade on the back of price hikes and capacity expansion. Sachit Jain, Vice Chairman and MD of the company discussed this and the outlook for FY22.

“Price hikes used to change every six months. However, since January we have been having quarterly hikes. Next week we should be sending out letters for further increases from July,” he said in an interview with CNBC-TV18.

“We had asked for Rs 6,250 per tonne hike in our letter and we have got between Rs 5,000 and Rs 6,000 per tonne,” he added.

Currently, the company's exports are about 5 percent of its overall business. Jain said that the plan was to increase this quickly.

“We expect exports to touch 25 percent by FY25,” he stated.

The company is targeting 22 percent return on capital employed (RoCE) for this year and 25 percent by FY25.

The entire capacity expansion will be done by November 2022, he said. “We expect to invest a little over Rs 200-250 crore. We will take a little bit of marginal debt, there is enough equity in the company, enough cash accruals so we should be comfortable,” he shared.

The current net debt of the company is around Rs 140 crore as of March 31.