JTL INDUSTRIES LIMITED (JTLIND) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the JTL Industry Limited Q2FY27 Results Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator for pressing star then zero on your touch-down form. Please note that this conference is being recorded. I now hand the conference over to Mr. Pallav Agarwal from Antics of Broking Limited. Thank you, over to you, sir.

Yeah, thank you, Shruti, and good day, everyone. A very warm welcome to the second quarter F527 earnings call of JTL Industries Limited. We have the senior management team of the company, represented by Mr. Dhruv Singla, the executive director, Mr. Pranav Singla, the executive director, Mr. Naveen Kumar Laroia, the Chief Financial Officer, and Mr. Saharup Jain, the CFO of JTL Defense Limited, which is a subsidiary of JTL Industries Limited. So now I would like to hand over the call to the management team. Over to you, Mr. Laroia.

Good afternoon, everyone. This is Naveen Laroia, and thank you for joining the earnings conference call of JTL Industries Limited to discuss the performance for Q2 and H1 of financial year 27. We appreciate your continued support and interest in our company. The company continued to deliver growth during the quarter, with revenue from operations increasing by 43.0% year-on-year to 613.8 crores. EBITDA grew by 46.5% to 50.8 crores, with an EBITDA margin of 8.3% compared to 8.1% in Q2 financial year 26. Profit after tax for the quarter was 29 crores, reflecting growth of 30.7% year-on-year, with a back margin of 4.7%. The company reported sales volume of 1,484 metric tons during Q2 financial year 27, registering a growth of 23.2% year-on-year. EBITDA per turn improved to Rs.5053, an increase of 19% year-on-year, supported by a higher contribution from value-added products and an improved product mix. Coming to the half-year performance, the company achieved its highest ever half-year sales volume of 218997 metric tons, reflecting growth of 20.2% year-on-year. Revenue from operations increased by 37.2% to 1,335.4 crores. The company also achieved its highest ever half-year EBITDA and PAD during H1 financial year 27. EBITDA increased by 88.7% year-on-year to 109.5 crores with a margin of 8.2%. EBITDA per turn improved to 5,000 rupees, registering growth of 57.0% year-on-year. Profit after tax grew by 66.2% to 64.3 crores, with a margin of 4.8%. It is important to highlight that the reported tax for Q2 and H1 financial year 27 includes an additional non-cash depreciation charge of 2.78 crores arising from the assets revaluation undertaken at JTL Defense Limited in March 2026. Excluding this accounting adjustment, the normalized pad for Q2 Financial Year 27 would have been 31.8 crore rupees, while a normalized pad for H1 Financial Year 27 would have been 67.1 crores. On the cash flow front, net cash flow from operating activities turned positive at 50 crore rupees in H1 Financial Year 27 compared with an outflow of 80.3 crore rupees in the corresponding period last year. The company invested 76.5 crores towards capital expenditure to support its ongoing capacity expansion plans during the H-1 ended 39-2026. On a standalone basis, an investment of every 67 crores has been made during the H-1, mostly at the company's non-governance facility. Looking ahead, the company remains focused on bringing the upcoming capacities in Maharashtra on stream and gradually ramping up production with a greater and faster than value-added products such as GP pipes, color-coated pipes, and roofing sheets. With this, I would now request the moderator to open the floor for questions and answers. Thank you, everyone.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers to ask me a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Harsh Vasa from SBI Capital Security. Please proceed.

Thank you for the opportunity and congratulations on a good set of numbers. So, my first question was regarding the new capacity which is coming up. So, the GA oil capacity which was expected to commission in August 26th, so has it been commissioned? And the color-coded capacity of OLAC which is expected to commission in December 26th, so is it on track?

Yeah, so the GP capacity right now, we have done the cold trials for the pickling of the GP line, and it will be up and running by the end of this quarter. There have been certain delays due to the little bit of monsoons and due to a little delay in getting the electrical connection. So, we are expected to get on with the commercial production by the end of this quarter.

Any capacity utilization numbers like for these two facilities for this year, like any volume in small parts?

So, in the last quarter of the year, we would be getting a volume of about 25,000 tons to 30,000 tons from these capacities Thank you.

Thank you. Before we take the next question, we would like to remind participants to ask a question. To ask a question, please press star in one. The next question is from the line of Druvish Kanakia from Antics Drug Broking Numbers. Please proceed.

Yes sir, thank you for talking to you. Sir, your first half volumes grew by about 20% year on year. So, what kind of growth should we expect in the second half?

Thanks to me for your question. So yes, our H1 flows at about 20,000 times of volume. Our H2 is usually 20% higher than H1. So, in a basic scenario, $2,600 is something that you'll see flowing in H2, which makes volume for the entire year for about $4,800,000 from a current capacity. GP lang will add about $30,000, as Ruf just mentioned, in Q4, and starting in Q3 as well, we can expect some bit of volume coming from that as well, and a little ramp-up of DFT can be expected in Q3 as well. So, all together, we are on track to achieve our target of 25% growth for this year on a volume of 4.10 last year.

Okay. Thank you.

Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Akshay Shetty from Miraya Asset. Please proceed.

Mr. Akshay, you may proceed with your question. Hello.

Am I audible? Hello. Yes, yes. Yeah, good afternoon. Thank you for taking my question. My first question on volume. So H1 came in at about 2.19 lakh tons. So to reach the 5.15 lakh ton guidance, the H2 needs roughly 2.96 lakh tons. That is 38% higher than H2 last year. And which means moving from 36,500 tons a month to around 49,000 tons a month. So I wanted to know how much of that step-up depends on the Maharashtra capacity starting on time. And which month do you expect it to begin contributing volume?

So, as we just mentioned, we've already done a cold turn of the pickling line and the GP line. We have just awaited connection, the electricity connection, though, to be enhanced at the facility in Maharashtra. So, as soon as the connection comes, it will take about 15 days to organize everything in a proper way, and we can expect around 10,000 tons of additional volume flowing in from the GP and capacity. So, this can happen as late as December, and it can happen as early as in the next 15 days as well. So, as soon as the line starts, we'll be able to contribute significantly from the capacity. So, our average 100 of our plants is about 40,000 tons per month from our combined capacities. So, this will immediately take our 40,000 tons to 50,000 tons in the basic scenario. And as the whole complex starts, the whole CRM complex starts, which includes color-coated as well, so that will further add around 50,000 tons of additional volume every month. So altogether, from about 40,000 tons of run rate, we'll be touching about 65,000 tons of run rate, hopefully by this year.

Okay, yeah.

And what is the utilization level you are targeting for FY28 and FY29?

For FY28, we are targeting about 55% utilization levels, because there will be a new capacity coming on board. So, we won't be able to run the full capacity in one go in the next financial year. So, we can expect 55% capacity utilization on 1.7 million tons of capacity.

Okay, and on the API line, which is expected to commission on Q1 of FY28, so will the focus be on export or domestic?

So, first of all, that line is expected to commission by H1 of FY28, not in the Q1, and the market will be getting, yes, both the segment, export market as well, and the mistake market as well. As we are sitting close to the Navasheva port in Maharashtra, we have a good viability of exporting product as well. So, we see to it as the capacity comes on board, where it is more feasible to sell to produce, whether it's domestic or export.

Okay, yeah, thank you. Yeah, that's it from my end.

Thank you. Before we take the next question, We would like to remind participants that you may press star and want to ask questions. The next question is from the line of Pratik from Sniff. Please repeat.

Thanks for the opportunity and sir, congrats on the good setup. My first question is on the export value. So what is the export value in Q2? And if possible, at least throw some color on the export opportunity on the output for the H2 and the F2. Yeah, that's the first question from my side.

If you can just come back again, your Wi-Fi is muscling a little bit. Yeah.

Am I audible now, sir?

Yes, you are audible now.

So, my first question is on the export volume. What is the export volume in the Q2? And if possible, please throw some color on the export opportunity and its outlook for the H2 and next year. That's the first question.

So, for the export sales in the H1, a total volume was about 12,000 tons. Going ahead, this number will be moving significantly because this whole shortage and less exports was happening mainly because of the container non-availability and the increase in freight costs. To cover up already in this month, already we have exported about 5,000 tons of material. So, we are on a run rate to exceed our last year's export anyway. But the first quarter was a little softer because of the whole container short non-availability.

So, the scenario has been normalized with or not, sir?

The scenario is quite bad, I would say, right now. We experience latency in export container availability on a regular basis, but yes, we do overcome that in certain months, and then the next month, then there is the same situation. So it is very tough to say right now that what would be the scenario going forward, but having all these things have happened over the past six to eight months, Wherein the Hormuz has been shut, and there have been significant delays in getting containers to their destinations. But in the next quarter, apart from the Christmas in December, we don't see any more hindrances thereof. Having our fingers crossed with everything remains stable in the Gulf, so we are hoping to have a significant export volume in the edge too. We've opened new markets of Canada, US, where our trial orders have hit the shelves of the customers and have been accepted widely. So, we are expecting newer orders from these markets before they close for Christmas. So, yes, the next quarter should be very much available, and we should be crossing about 50,000 to 55,000 tons of exports this year.

Okay, okay. That's a very helpful step. And so, my next question is on the value-added product. So, what is the share in Q2 in volumes of the value-added products?

So, we've run close to 28,000 tons of value-added products in Q2. Going ahead, we're expecting, and this was a similar run rate in Q1 as well. Going ahead, we'll expect the run rate to touch about the additional sales coming from GP line and Caliputal line will be all value-added. So, we can expect our series, which is currently about 30-35% in value added for each one, going to about 50% for the next financial year, easily, on the basis of new capacity coming in.

Okay. Thank you, Shankar. And so, my third question is on the working capital days. In Q1, it was almost at around 75 days, and in Q2, it again goes to 83 days. So, yeah, so please elaborate more on the same, especially the payable debt that has been increased.

So, it's a working capital cycle is something that we've been mentioning earlier as well, that we're on a constant mission to reduce a working capital cycle. So, over last year, we've improved anyway, if you compare each one. And we are encouraging us here more towards dealer market where the payment cycle is much shorter. And our government portion, which was about 20% earlier, for the last year, was only 3%. So, going ahead, our path will be to reduce our government phase going ahead as well. So, all in all, this will naturally bring our working driver cycle days by next year end to about 60 days. And by FF29, we should be expecting our working driver cycle to be coming to 35 days because our majority reduce will be towards dealer-oriented business.

I have a nice one to add to this. See, when delays happen due to delayed availability of containers, monsoons, Ganpati festivals in there, so a lot of material even produced remains on the floor. So that adds to the working capital thereof. So now, as I mentioned earlier, in the next quarter, apart from Diwali and Christmas is not big in India, there are not many holidays, so to say, in India. So, we should be having a little more stringent working capital day there. Yes, we are trying to work, and having a deal of this, also, we are trying to get a bank to get a deal of this work upon a vendor finance scheme, wherein our working capital day would be reduced for us. So, that is something we are working on continuously, and shall be improved in the next quarter cycle.

That's a very helpful answer. And answer my just last question, how much CAPEX you did in H1, and what you are going to spend in H2?

So, about 70 crores is the amount that we spent in H1 this year, and you can expect anywhere close to 125 to 150 crores being spent on CAPEX in these two quarters of them, in Q3 and Q4.

Thank you, sir, and all that is for the future. Thank you.

Thank you. Before we take the next question, we would like to remind participants that you may press star and want to ask a question. The next question is on the line of Pallav Agharwal from Antics. Please proceed.

Yeah, hello, sir. Congratulations on a good set of numbers. So, first question was on the EBITDA per turn. So, we've, you know, crashed 5000 level in this quarter. So, with the VAP proportion going up, you know, what sort of EBITDA pattern are we targeting in 28 and 29?

Thanks, Pallam, for the question. So, we are targeting a similar kind of EBITDA pattern for next year as well. It is bound to increase in the coming years. But as next year, a new chunk of capacity is coming on board, which will not be obviously utilized to the full level it is supposed to be in the next financial year. So, we can expect that the surge in EBITDA pattern will not be that much. But we'll be hovering around 5,000 rupees mark for the next year as well. So the 5,000 rupees EBITDA button this year also includes about 200 rupees EBITDA button being added from mutual defense as well. So we can expect that excluding defense EBITDA button can touch 5,000 rupees in JVL industries itself as well. And defense EBITDA button will add something or the other more than 200 rupees in the coming quarters itself. So, we can expect that we'll be moving around the speed of about 5,000 rupees to about 5,250 rupees for the next financial year.

Sure, sir. Also, you know, in terms of, could you also give us some more details on JTL Defense, what is the performance this quarter, and what are we targeting going ahead?

So, JTL Defense, we have, in January, when we started the company, we were doing the sales volume was 40 tons in that, 40 tons a month in the company. Coming to now, we have almost touched a run rate of about 140 tons in the last month. So, October was closed at 140 tons of production, and we're expecting that by December, we'll be at a good rate of about 250 tons a month in vehicle defense. So, for entire Q2, we were about 360 tons, which can touch in Q4 about 70 tons as well. So, the headroom to grow over there is much more as well. The capacity of the plant is to make about 1,000 tons a month. So, we are nowhere close to the actual utilizing levels right now, and the actual utilizing levels of 1,000 times a month, we will get close to that by the 29. We are innovating new products over there, we are entering into a segment of coin blanks and bullet cups and JT defense as well. So, that kind of care is already being partly done, and the partly heating will be done in the next coming quarters as well. So, the current raw material for making bullet cups and coins is something that we already make. So, it's a validation that we'll be doing with these machines coming on board by end of the financial year.

Sure. Also, in terms of the CapEx outlook for the next 28 and 29, given that I think we probably spend most of the amount required for the 2 million ton. So, going in, would we have some more maintenance CAPEX or some investment in JTL defense? What would the CAPEX requirements?

So, we can expect a maintenance CAPEX of 40-50 crores happening in the overall company, including industries and defense, over our next year itself anyway. Like, over and beyond that, there will be a CAPEX of API type happening as well. We've done a part CAPEX of that is going to be coming in, And the remaining will be incurred in the H1 next year. So that can be close to around 75 crores of CAPEX as well for the PBI, over and beyond our maintenance CAPEX.

Okay. So lastly, you know, if we just, you know, just help us out with how is the demand looking in the market, and given that, you know, HRC prices are at pretty high levels, so what is the differential between, you know, Primary and secondary pipes, and how that is shaping the demand dynamics in the pipe space.

Yeah, hi, Jipan. From this side, so firstly, to answer your question about what is the price difference between a primary and secondary at the moment, so secondary coil is based around 64,000 rupees, with 600 to 750 rupees increased this month again. Yes, having said that, we are at a very high level of prices of HR coil at the starting of this month, but there are maintenance is happening in plants of Tata and Sale and even AMNS, so there is some contraction in supply in the market. So, according to the HML, the prices don't seem to budge at the current levels. There is certainly a level of demand latency at the moment because of Diwali which is approaching, and after the first week, the Diwali of the 8th of November, after that, we expect the demand to pick up in good quantities for this month. and the rest of the quarter. We've had a good October as well, so that was not a problem there, but there is a gap, to answer the second question, the gap between the primary and secondary remain between 12dp to 23dp kg depending upon the gauge differences available in from say 2.5 mm to 1.2 mm. So, there is bumper demand in the secondary market. Again, just some latency because of Diwali. After that, we expect that market also to have good demand. So, H2 remains on a positive side, and we expect a good H2 on demand terms.

Sure, sir. Thank you so much.

Thank you. Participants who wishes to ask a question, please press star and 1 at this time.

To ask a question, please press star and 1 now. Participants who wishes to ask a question, please press star and 1 now.

As there are no further questions from the participants, I would now like to hand the conference over to the management for the closing comments. Over to you, sir.

Thank you, everybody, for taking the time out and joining the call. Hope to connect with you all again in answering the questions.

At the end of Q3 as well. Thank you.

On behalf of Antics Drug Smoking, that concludes this call. Thank you for joining us, and you may not disconnect your line.