IFGL Refractories hits new high; zooms 87% in 1 month on solid Q2 results

Shares of IFGL Refractories hit a new high at Rs 870, as they rallied 7 per cent on the BSE in Wednesday's intra-day trade, extending their gain after reporting a solid set of numbers for the quarter ended September 2023 (Q2FY24).

The stock was trading higher for the fourth straight day, surging 26 per cent during the period. In the past one month, it has zoomed 87 per cent, as compared to a 2 per cent rise in the S&P BSE Sensex.

IFGL is one of the fastest growing brands in the global refractory industry. The company offers a wide range of specialised refractory products and operating systems for its products to its customers worldwide. The company's expertise lies in the Iron Making, Steelmaking and Continuous Casting areas with particular emphasis in Slide Gate Systems, Purging Systems, Ladle Lining & Ladle Refractories, Tundish Furniture's & Tundish Refractories, and others.

For Q2FY24, IFGL reported highest-ever quarterly revenue of Rs 459.5 crore, representing a 33 per cent year-on-year (YoY) growth. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter showed an impressive growth of 85 per cent YoY at Rs 71.7 crore, with EBITDA margins expansion of 440 bps at 15.6 per cent. Profit after tax jumped 95 per cent YoY to Rs 38 crore from Rs 19.5 crore in a year ago quarter.

Despite the hurdles encountered during the quarter especially in the overseas markets, the company has recorded a quarter marked by robust growth & financial health. The management is optimistic of this momentum to persist going forward and continue to focus on expanding its product offering and market share in the domestic & overseas market.

Growth drivers will boost usage of refractory products significantly. Iron and steel industry accounts for around 70 per cent of the refractories market share. India’s steel demand will show healthy growth on the back of strong urban consumption and infrastructure spending, which will also drive demand for capital goods and automobiles among other things.

IFGL in an investor presentation said there is a huge export opportunity for India due to its low cost advantage & Centre aims at covering refractories in PLI 2.0 to support the steel industry.

In the Union Budget it is proposed to raise the capital expenditure target by 33 per cent to Rs 10 trillion crore for the next fiscal year, which is 3.3 per cent of the country's economic output, as the government hopes to shore up demand and consumption in the economy.

Anti-Dumping Duty policy promotes fair trade and reduces the ill effects of dumping, on the Domestic Industry. Active local investments, 100 per cent FDI, National Steel Policy and other government initiatives are expected to support the steel industry, the company said.