Rajratan Global Wire Ltd:Annual Report 2023-24 Analysis

Rajratan Global Wire Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History: Rajratan Global Wire Ltd. was established in 1988 by Mr. Sunil Chordia. The company initially focused on the trading of steel wires.

Headquarters Location and Global Presence: The company’s headquarters is located in Indore, Madhya Pradesh, India. Rajratan Global Wire has a significant presence in India and has expanded its reach to international markets like Thailand.

Company Vision and Mission: While the specific publicly available vision and mission statements are limited, Rajratan Global Wire aims to be a leading manufacturer of high-quality steel wires and cater to the growing demand for tire bead wire in the automotive industry.

Key Milestones in Their Growth Journey:

• Initial Phase (Pre-2000s): Focus on trading steel wires.
• Early 2000s: Entered into manufacturing, focusing on high carbon steel wires.
• Expansion (2010s): Increased production capacity and expanded its product portfolio.
• Thailand Expansion: Established a manufacturing facility in Thailand to cater to the Southeast Asian market.
• Capacity Expansion: Continuously increased capacity at its Indore plant to meet growing demand.

Stock Exchange Listing Details and Market Capitalization: Rajratan Global Wire is listed on both the Bombay Stock Exchange (BSE: 517522) and the National Stock Exchange (NSE: RAJRATAN). Market Capitalization is constantly changing. Refer to financial websites for the latest data.

Recent Financial Performance Highlights: Recent financial highlights include strong revenue growth driven by increased demand for tire bead wire, especially with the increasing radialization of tires and import substitution. Profitability has also been positive, but can be influenced by raw material price fluctuations. Refer to financial websites for the latest data.

Management Team and Leadership Structure:

• Sunil Chordia: Chairman and Managing Director
• Yeshwant Jajoo: Chief Financial Officer

Notable Awards or Recognitions: Details not readily available.

Their Products #

Complete Product Portfolio with Categories:

• Tire Bead Wire: High carbon steel wire used to reinforce tire beads.
• High Carbon Steel Wires: Used in various applications.

Flagship or Signature Product Lines: Tire Bead Wire is considered the flagship product line.

Key Technological Innovations or Patents: Rajratan Global Wire focuses on high-quality production processes for tire bead wire, focusing on consistent tensile strength and dimensional accuracy.

Manufacturing Facilities and Production Capacity:

• Indore, India: Key manufacturing facility for tire bead wire and other high carbon steel wires.
• Thailand: Manufacturing facility for tire bead wire catering to Southeast Asian markets.
• Production Capacity: Continually expanding, specific figures should be sourced from the company’s investor presentations and annual reports.

Quality Certifications and Standards: The company is certified with IATF 16949, ISO 9001 and ISO 14001 standards.

Any Unique Selling Propositions or Technological Advantages: Strong emphasis on quality, consistent product performance, and established relationships with major tire manufacturers. Location allows for cost competitive pricing.

Primary Customers #

Target Industries and Sectors:

• Tire Manufacturing: Primary target sector.
• Automotive Industry: Indirectly through tire manufacturers.

Geographic Markets (Domestic vs. International):

• Domestic: India is a major market.
• International: Southeast Asia (primarily Thailand), other export markets.

Major Client Segments: Focuses primarily on supplying to tire manufacturers.

Distribution Network and Sales Channels: Primarily direct sales to major tire manufacturers.

Major Competitors #

Direct Competitors in India and Globally:

• Direct Competitors: Other domestic and international manufacturers of tire bead wire. Key competitors include Bekaert, Kiswire, and domestic Indian players.
• Refer to industry reports for more specific competitor analysis.

Competitive Advantages and Disadvantages:

• Advantages: Established relationships with major tire manufacturers, cost-competitive production in India, and growing presence in Southeast Asia.
• Disadvantages: Vulnerability to fluctuations in raw material prices, dependence on the automotive industry’s performance.

How They Differentiate from Competitors: Focus on quality, consistent supply, and strong customer relationships.

Industry Challenges and Opportunities:

• Challenges: Fluctuations in raw material prices (steel), cyclicality of the automotive industry, and competition from established global players.
• Opportunities: Increasing radialization of tires globally, growing automotive industry in emerging markets, and potential for import substitution in India.

Market Positioning Strategy: Rajratan Global Wire positions itself as a reliable supplier of high-quality tire bead wire, focusing on building strong relationships with key customers and expanding its production capacity to meet growing demand.

Future Outlook #

Expansion Plans or Growth Strategy: Continued expansion of production capacity in India and potentially in other strategic locations, focusing on catering to the increasing demand for tire bead wire.

Sustainability Initiatives or ESG Commitments: Details regarding sustainability initiatives or ESG commitments can be found in the company’s annual reports and investor presentations.

Industry Trends Affecting Their Business:

• Increasing radialization of tires.
• Growth of the automotive industry, particularly in emerging markets.
• Shift towards electric vehicles and their impact on tire demand.
• Fluctuations in raw material prices (steel).

Long-Term Vision and Strategic Goals: To be a leading global manufacturer of tire bead wire and other high carbon steel wires, focusing on quality, innovation, and sustainable growth.

Financial Analysis: Rajratan Global Wire Limited (FY 2023-24) #

3-Year Financial Trend Analysis (Consolidated) #

Revenue #

Revenue from operations saw a marginal decline of 0.55% in FY24 to Rs. 89,045 Lakhs from Rs. 89,537 Lakhs in FY23. This was attributed to increased competition and a decline in realization. The 5-year CAGR remains positive at 13%. Sales tonnage increased by 16% YoY in FY24.

Profitability #

• EBITDA: Declined by 21% YoY to Rs. 12,767 Lakhs in FY24. The 5-year EBITDA CAGR is 13%.
• EBITDA Margin: Decreased to 14.34% in FY24 from 18.08% in FY23.
• Profit After Tax (PAT): Declined by 28% YoY to Rs. 7,183 Lakhs in FY24. The 5-year PAT CAGR stands at 17%.
• EPS (Basic): Declined inline with PAT.

Return Ratios #

• RoCE: Reduced to 16.30% in FY24 from 23.67% in FY23.
• RoNW: Declined to 14.58% in FY24 from 22.78% in FY23 (Standalone: 15.41% vs 25.66%).

Leverage #

• Debt/EBITDA: Increased in FY24.
• Debt-Equity Ratio: Maintained at 0.39 as of March 31, 2024.

Cash Flow #

Cash operating profit decreased to Rs. 8,955 Lakhs in FY24 from Rs. 11,821 Lakhs in FY23. Working capital days stable at 56 days. The company repaid Rs 3,074 Lakhs of debt (Standalone).

Dividend #

Recommended final dividend of Rs. 2/- per share for FY24, resulting in a total payout of Rs. 1015 Lakhs (same as FY23).

Business Segment Performance #

Single Reportable Segment #

The company operates in a single reportable segment – Tyre Bead Wire. High Carbon Steel Wire constitutes a smaller portion (13% of turnover in FY24).

Geographical Performance #

• India (Standalone): Revenue declined 9.13% YoY to Rs. 55,646 Lakhs. PAT decreased 21% YoY to Rs. 5,583 Lakhs.
• Thailand (Subsidiary - Rajratan Thai Wire Co. Ltd.): Volume growth (42,211 MT vs 29,480 MT FY23). Net revenues grew, but PAT declined (THB 714.08 Lakhs vs THB 1,242.76 Lakhs FY23). Accounted for 37% of consolidated revenues in FY24. Outlook targets 50,000 tonnes sales volume with 76% domestic / 24% export mix.
• Exports (Consolidated): Accounted for 36.84% of consolidated revenue in FY24 (up from 33.4% in FY23), servicing customers across 21 countries.

Major Strategic Initiatives and Progress #

Capacity Expansion & Modernisation #

• Chennai Plant: Rs. 300 Crore greenfield project commissioned in FY24, adding 30,000 TPA initial capacity.

Detailed Analysis #

Rajratan Global Wire Ltd. (FY 2023-24) Financial Analysis #

Consolidated Financial Performance Overview #

Rajratan Global Wire Ltd. experienced flat revenue growth in FY24 amidst increased competition and declining realisations. While sales tonnage increased, profitability metrics contracted significantly due to market pressures and costs associated with major capacity expansion.

• Revenue: Consolidated revenue from operations decreased marginally by 0.55% YoY to Rs. 89,045 Lakhs in FY24 from Rs. 89,537 Lakhs in FY23. The stagnation, despite a 16% volume increase (104,268 MT vs ~90,000 MT implied), highlights the sharp decline in average realisation per tonne (-13.7% YoY to Rs. 86,151/MT).
• Profitability: EBITDA declined by 21.0% YoY to Rs. 12,767 Lakhs, with the EBITDA margin contracting by 374 basis points to 14.34%. Profit After Tax (PAT) saw a steeper decline of 28.2% YoY to Rs. 7,183 Lakhs. The margin pressure is attributed to increased competition, including imports, and inflationary pressures on inputs.
• Capital Efficiency: Return on Capital Employed (RoCE) decreased significantly from 23.67% in FY23 to 16.30% in FY24. Return on Net Worth (RoNW) also decreased from 22.78% to 14.58%. This reflects lower profitability and the capital deployed for the new Chennai facility.

Key Financial Highlights (Consolidated) #

(Note: FY23 Sales Tonnage estimated based on FY24 volume growth percentage. Debt/EBITDA calculated using Gross Debt from Consolidated Balance Sheet Notes and Consolidated EBITDA.)

Balance Sheet Analysis (Consolidated) #

The consolidated balance sheet reflects the significant capital expenditure undertaken during the year for the Chennai plant, leading to an increase in assets and corresponding debt, while equity also grew through retained earnings.

Comparative Consolidated Balance Sheet (Rs. Lakhs) #

Rajratan Global Wire Ltd. Financial Analysis FY 23-24 #

Revenue Analysis #

Overall Performance #

Consolidated revenue from operations remained nearly flat, declining marginally by 0.55% YoY to Rs. 89,045 Lakhs in FY 23-24 from Rs. 89,537 Lakhs in FY 22-23. This stagnation occurred despite a 16% YoY increase in sales volume, indicating significant pressure on realizations due to increased competition (including imports) and potentially changing product mix.

Segment Performance #

The company operates primarily in the Tyre Bead Wire segment. While specific segment revenue data isn’t detailed in the provided P&L, the overall business dynamic reflects segment challenges.

Geographical Performance #

• India (Standalone): Revenue decreased by 9.1% YoY to Rs. 55,646 Lakhs.
• Thailand (Subsidiary): Revenue (implied from consolidated less standalone) grew approximately 18.0% YoY to Rs. 33,399 Lakhs (THB 14,211 Lakhs). Sales volume in Thailand increased significantly by 43% YoY (from 29,480 MT to 42,211 MT).
• Exports: Constituted 36.84% of consolidated revenue (approx. Rs. 32,800 Lakhs), up from 33.4% in FY23, driven partly by the Chennai plant facilitating exports and growth in Thailand.

Realization #

Average realization per metric tonne (PMT) decreased sharply by 13.7% YoY from Rs. 99

Cash Management Analysis of Rajratan Global Wire Ltd. (FY 23-24) #

Cash Flow Analysis (Consolidated - INR Lakhs) #

• Operating Cash Flow (OCF): Net cash generated from operating activities stood at 10,086 in FY24, compared to 15,903 in FY23. The decrease reflects lower profitability (Profit Before Tax decreased from 13,415 to 9,376) despite favorable movements in working capital components like inventories and trade payables, offset partially by an increase in trade receivables.
• Investing Cash Flow (ICF): Net cash used in investing activities was 9,915 in FY24, lower than 16,389 used in FY23. The primary component was capital expenditure (Payments for purchase of property, plant and equipment) amounting to 12,042 in FY24 (FY23: 16,591), mainly directed towards the Chennai greenfield project and Thailand capacity enhancements. Interest received provided a minor inflow.
• Financing Cash Flow (FCF): Net cash used in financing activities was 400 in FY24, compared to cash generation of 2,641 in FY23. Key activities included proceeds from borrowings (9,482), repayment of borrowings (6,490), payment of finance costs (1,482), and dividend payment (1,015). The significant shift from inflow to outflow is mainly due to lower net proceeds from borrowings compared to the previous year.

Working Capital Management Efficiency #

• The working capital cycle extended marginally to 56 days in FY24 from 55 days in FY23.
• Receivables days increased to 63 days from 56 days in FY23, attributed to easier terms of trade offered to customers amidst a more challenging market. (Standalone Debtors Turnover Ratio remained stable at 5.75 vs 5.72).
• Inventory management improved, reflected in a higher Standalone Inventory Turnover Ratio of 7.21 in FY24 versus 6.45 in FY23, indicating faster inventory movement despite market challenges. Consolidated inventory levels decreased from 8,619 Lakhs to 7,205 Lakhs.
• Trade payables turnover (Standalone) remained stable at 6.63 vs 6.61.
• Working capital as a percentage of total capital employed decreased slightly to 20% in FY24 from 22% in FY23, demonstrating efficient management despite business pressures. The company aims to moderate working capital outlay by focusing on lower inventory levels (just-in-time approach).

Capital Expenditure Analysis #

• Consolidated capital expenditure (Payments for PPE) was 12,042 Lakhs in FY24, down from 16,591 Lakhs in FY23 but still significant. Standalone capex was 9,917 Lakhs.
• The major capex driver was the greenfield bead wire manufacturing facility in Chennai (total project cost Rs. 300 Crore), which added 30,000 TPA capacity (expandable to 60,000 TPA). This facility is strategically located near southern customers, raw material suppliers, and the port for export efficiency. Funding mix was Rs 165 Cr net worth and Rs 135 Cr debt.
• Capex also included initiatives in Thailand for capacity expansion (reaching 60,000 TPA), operational efficiency (automation like conveyors, cranes), and modernization (digital plating line monitoring).
• Investment reflects a strategic focus on increasing scale (consolidated capacity reaching 1,80,000 TPA bead wire and 12,000 MTA steel wire post-Chennai phase 1), modernization, and geographic diversification to enhance competitiveness and customer service globally.

Dividend and Shareholder Returns #

• The Board recommended a final dividend of Rs. 2/- per equity share (face value Rs. 2/-) for FY24, subject to shareholder approval. This results in a total dividend payout of Rs. 1015 Lakhs for the year.
• The dividend payout for FY24 represents approximately 14.1% of the consolidated Profit After Tax (7183 Lakhs).
• The company has a Dividend Distribution Policy available on its website.
• No share buyback activity was mentioned for FY24.

Debt Service Coverage #

• The Interest Coverage Ratio (Standalone) decreased to 7.55 in FY24 from 11.10 in FY23, reflecting the impact of lower operating profits (PBDIT) relative to interest expenses.
• Debt/EBITDA ratio (Consolidated) increased to 1.50x in FY24 from 1.04x in FY23, indicating higher leverage relative to earnings, primarily due to increased debt financing for the Chennai expansion coinciding with lower EBITDA.
• The company repaid Rs. 3074 Lakhs of debt (Standalone) during FY24, demonstrating commitment to deleveraging even during expansion.
• The average cost of debt (Standalone) increased to 7.69% in FY24 from 6.57% in FY23.
• Despite increased leverage post-expansion, the company maintained its CRISIL A+ Stable credit rating, underpinning its financial standing and debt servicing capability. The debt structure for the expansion includes patient funds with an 84-month tenure.

Liquidity Position and Cash Conversion Cycle #

• The Standalone Current Ratio remained stable at 1.33 in FY24 compared to 1.31 in FY23, indicating adequate short-term liquidity.
• Consolidated Cash and cash equivalents at year-end were 313 Lakhs, slightly up from 309 Lakhs in FY23. Bank balances other than cash equivalents (including margin money) were 1,607 Lakhs (FY23: 1,298 Lakhs).
• The Cash Conversion Cycle (CCC) analysis based on provided turnover days: CCC = Receivables Days + Inventory Days - Payables Days. Using Standalone turnover ratios: Inventory Days = 365 / 7.21 = 50.6 days; Receivables Days = 365 / 5.75 = 63.5 days; Payables Days = 365 / 6.63 = 55.0 days. CCC (Standalone) = 63.5 + 50.6 - 55.0 = 59.1 days. This suggests a manageable cycle, although the increase in receivables days impacts it.
• The company managed liquidity prudently, drawing only 70% of sanctioned short-term loans on average and funding 55% of the Chennai project via net worth, reducing pressure.

Free Cash Flow (FCF) Analysis #

• Consolidated Free Cash Flow (OCF - Capex) was negative at -1956 Lakhs in FY24 (10086 - 12042), compared to a negative FCF of -688 Lakhs in FY23 (15903 - 16591). The negative FCF is primarily due to the significant capital expenditure undertaken for the Chennai plant exceeding the operating cash flow generated during the year.
• Standalone Free Cash Flow was also negative at -962 Lakhs in FY24 (8955 - 9917), compared to -1111 Lakhs in FY23 (10181 - 11292).
• FCF Yield (Consolidated FCF / Market Capitalization) = -1956 / 295005 = -0.66% for FY24.
• The negative FCF in the last two years reflects the company’s heavy investment phase. Management expects improved earnings in the coming years as the new capacity ramps up, which should support debt reduction and potentially lead to positive FCF generation in the medium term.

Rajratan Global Wire Limited - FY 2023-24 Financial Analysis #

Profitability Analysis #

Revenue #

• Consolidated revenue decreased marginally by 0.55% to ₹89,045 Lakhs in FY24 from ₹89,537 Lakhs in FY23.
• Standalone revenue decreased by 9.1% to ₹55,646 Lakhs from ₹61,241 Lakhs, attributed to increased competition and a decline in realization, despite a 16% increase in sales tonnage.
• 5-year consolidated revenue CAGR: 13%.

EBITDA #

• Consolidated EBITDA declined by 21% to ₹12,767 Lakhs in FY24 from ₹16,159 Lakhs in FY23.
• Standalone EBITDA decreased by 17.1% to ₹9,778 Lakhs from ₹11,801 Lakhs.
• 5-year consolidated EBITDA CAGR: 13%.

Profit After Tax (PAT) #

• Consolidated PAT decreased by 28% to ₹7,183 Lakhs in FY24 from ₹10,012 Lakhs in FY23.
• Standalone PAT decreased by 21.2% to ₹5,583 Lakhs from ₹7,088 Lakhs, attributed to increased competition and lower realization.
• 5-year consolidated PAT CAGR: 17%.

Margins #

• Consolidated EBITDA Margin decreased significantly by 375 bps to 14.34% in FY24 from 18.08% in FY23 and 20.34% in FY22. This is attributed to inflationary pressure on raw materials, growing competition (including imports), and lower realization.
• Standalone Net Profit Margin (NPM) decreased to 10.03% in FY24 from 11.57% in FY23, attributed to lower realization and higher costs.

Return Ratios #

• Consolidated Return on Capital Employed (RoCE) decreased to 16.30% in FY24 from 23.67% in FY23, impacted by lower realizations, increased competition, and costs associated with capacity expansion.
• Standalone RoCE decreased to 18.02% in FY24 from 25.38% in FY23.

Rajratan Global Wire Limited - Financial Analysis (FY 2023-24) #

Executive Summary #

Rajratan Global Wire Limited faced a challenging year in FY 2023-24, marked by increased competition and pressure on realizations, impacting profitability despite significant volume growth. Consolidated revenue remained flat (-0.55%), while EBITDA (-21%) and PAT (-28%) saw considerable declines. Key strategic moves included the commissioning of the new Chennai plant, significantly increasing capacity and positioning the company for future growth and global market penetration. The company maintained a stable financial position, funding the expansion through internal accruals and debt, while retaining its CRISIL A+/Stable credit rating. Operational focus remains on ramping up the new capacity, enhancing efficiency in Thailand, and expanding global market reach. The outlook is cautious in the near term but optimistic for the long term based on strategic capacity additions and diversification efforts.

Financial Performance Analysis #

Revenue #

Consolidated revenue marginally decreased by 0.55% to ₹890.45 Crores from ₹895.37 Crores in FY23. Standalone revenue declined by 9.14% to ₹556.46 Crores. This decline, despite a 16% increase in sales tonnage (104,268 MT vs 89,693 MT), was primarily driven by competition and a drop in average realization per tonne to ₹86,151 from ₹99,827 in FY23. The 5-year revenue CAGR stands at 13%.

Profitability #

• Consolidated EBITDA fell 21% to ₹127.67 Crores (FY23: ₹161.59 Cr). Standalone EBITDA (excluding other income) decreased 17.14% to ₹97.78 Crores. The decline reflects lower realizations and competitive pressures. The 5-year EBITDA CAGR is 13%.
• Consolidated Profit After Tax (PAT) decreased by 28% to ₹71.83 Crores (FY23: ₹100.12 Cr). Standalone PAT fell 21.23% to ₹55.83 Crores. The 5-year PAT CAGR is 17%.

Margins #

• Consolidated EBITDA margin contracted significantly by 374 bps to 14.34% (FY23: 18.08%) due to lower realizations and competitive intensity, including imports.
• Standalone Operating Profit Margin decreased to 17.56% from 19.27% (FY23). Standalone Net Profit Margin decreased to 10.03% from 11.57% (FY23).

Return Ratios #

• Consolidated Return on Capital Employed (RoCE) decreased to 16.30% (FY23: 23.67%), impacted by lower profitability and capital employed in the newly commissioned Chennai plant.
• Consolidated Return on Net Worth (RoNW) decreased to 14.58% (FY23: 22.78%). Standalone RoNW stood at 16.97% (FY23: 25.70%).

Earnings Per Share (EPS) #

Basic Consolidated EPS declined to ₹14.15 from ₹19.72 in FY23.

Operational Analysis #

Capacity Expansion #

Commissioned a new 30,000 TPA greenfield plant in Chennai (expandable to 60,000 TPA), bringing total consolidated capacity to 162,000 TPA effective FY25 (Indore: 72k, Chennai: 30k, Thailand: 60k). This makes Rajratan the largest bead wire manufacturer in India and second largest globally (ex-China).

Chennai Plant #

Represents a ₹300 Crore strategic investment. Its port-based location facilitates exports and serves South Indian customers efficiently. Features modern, large-scale lines for efficiency and is built to IGBC Green Factory Platinum standards, including a Zero Liquid Discharge (ZLD) plant. Ramp-up to rated utilization is targeted within four years.

Thailand Operations #

Achieved volume growth despite competition from Chinese imports. Focus is on optimizing operational efficiency and enhancing value-addition. Aims for full capacity utilization (60,000 TPA) in FY25. Contributed 37% to consolidated revenue.

Indore Plant #

Continues to operate at 72,000 TPA, serving North, West, and East India.

Technology & R&D #

Investments made in Rajratan Technical Centre and digitalization initiatives to optimize processes, improve quality, and enhance productivity.

Rajratan Global Wire Limited: FY 2023-24 Financial Analysis #

Executive Summary #

Rajratan Global Wire Limited faced a challenging FY 2023-24 due to increased competition and declining price realisations, despite achieving volume growth. Consolidated revenue saw a marginal decline, while EBITDA and PAT decreased significantly due to competitive pressures and lower margins. The company completed a major capacity expansion with the commissioning of its Chennai plant, positioning it for future volume growth and export capabilities, albeit coinciding with a market downturn. Key strategic initiatives focus on leveraging this expanded capacity, globalizing sales efforts (US, Europe), enhancing cost competitiveness, and managing increased debt levels incurred for expansion. The outlook remains guarded due to prevailing market oversupply, but the company expresses confidence in its long-term strategy, strengthened manufacturing base, and market positioning in India and Thailand.

Financial Performance Analysis #

Profit & Loss #

• Revenue: Consolidated revenue from operations decreased marginally by 0.55% to ₹890.45 Cr in FY24 from ₹895.37 Cr in FY23. This was despite a 15.2% increase in sales tonnage (103,358 MT vs 89,694 MT), indicating significant pressure on realisations (Average Realisation PMT declined 13.7% to ₹86,151 from ₹99,827). Management attributed the revenue performance to increased competition and lower realisation.
• EBITDA: Declined by 21% to ₹127.67 Cr from ₹161.59 Cr in FY23. This was driven by the topline pressure and increased competition impacting profitability.
• Profit After Tax (PAT): Decreased by 28% to ₹71.83 Cr from ₹100.12 Cr in FY23, reflecting the lower operating profit and competitive environment.
• Margins: EBITDA margin contracted by 374 bps to 14.34% (FY24) from 18.08% (FY23). Net Profit margin decreased to 8.07% from 11.18%. This compression is attributed to inflationary pressure on raw materials (though steel prices fluctuated), aggressive imports impacting realisations, and rising competition.
• EPS (Basic): Declined to ₹14.15 from ₹19.72 in FY23.

Balance Sheet & Financial Health #

• Return Ratios: Return on Capital Employed (RoCE) decreased to 16.30% from 23.67% due to lower profitability and capital employed increasing with the Chennai expansion yet to fully contribute to earnings. Return on Net Worth (RoNW) decreased to 14.58% from 22.78%.
• Debt: Consolidated borrowings (Non-Current + Current) increased to ₹192.67 Cr as of March 31, 2024, from ₹170.97 Cr as of March 31, 2023. The increase is primarily due to funding the Chennai expansion (₹135 Cr debt component for the ₹300 Cr project). The Debt-to-Equity ratio remained at 0.39, indicating that the increase in debt was matched by an increase in equity (Net Worth increased to ₹492.60 Cr from ₹439.38 Cr). Debt/EBITDA ratio increased due to lower profitability and higher debt. Management aims to pare down debt over the next two years using earnings.
• Liquidity: Working capital days remained relatively stable at 56 days (FY24) vs 55 days (FY23). The company maintained liquidity despite the large capex, utilizing internal accruals (₹165 Cr) significantly for the Chennai plant funding. Cash and cash equivalents stood at ₹3.13 Cr (Consolidated: ₹12.50 Cr).
• Credit Rating: Maintained CRISIL A+ Stable rating, validating underlying business strength despite current pressures.

Cash Flow #

• Operating Cash Flow: Cash generated from operations decreased significantly to ₹100.17 Cr (Consolidated) in FY24 from ₹159.96 Cr in FY23, primarily due to lower profitability.
• Investing Cash Flow: Cash outflow from investing activities was ₹99.31 Cr (Consolidated), lower than FY23’s ₹165.86 Cr as the major capex on the Chennai plant neared completion.
• Financing Cash Flow: Net cash used in financing activities was ₹4.06 Cr (Consolidated), reflecting debt drawdowns for capex offset by repayments and dividend payouts.

Dividend #

The Board recommended a final dividend of ₹2 per share, same as FY23, subject to shareholder approval. Total dividend outflow is ₹10.15 Cr.

Operational & Segment Performance #

Capacity Expansion #

The company commissioned its greenfield Chennai plant (initial 30,000 TPA, expandable to 60,000 TPA). This increases total consolidated capacity to 162,000 TPA (effective FY25) across Indore (72,000 TPA), Chennai (30,000 TPA), and Thailand (60,000 TPA), making it one of Asia’s largest bead wire manufacturers (ex-China). The Chennai plant provides strategic port access for exports and proximity to South Indian customers and raw material suppliers, aiming for lower logistics costs and JIT delivery.

Volume Growth #

Despite market headwinds, sales tonnage grew 15.2% (Consolidated), indicating market share gains or successful offtake from existing customers, albeit at lower prices. The second half of FY24 showed particularly attractive volume growth.

Thailand Operations #

Rajratan Thai Wire Co. Ltd. (wholly-owned subsidiary) reported a 43% increase in sales volume to 42,211 MT. Net revenues grew by 12%. However, PAT decreased significantly to THB 714.08 Lakhs from THB 1,242.76 Lakhs in FY23, reflecting margin pressures. The focus for FY25 is value-addition and achieving full capacity utilization (target 50,000 tonnes). Digital plating line monitoring was commissioned.

Technology & Efficiency #

The company implemented digitalisation initiatives (ConnectFacts program) for shop-floor organization, real-time monitoring, and achieving a nearly paperless environment, saving significant person-hours. TPM practices were implemented in Thailand. Investments were made in R&D, including the Rajratan Excellence Centre.

Key Audit Matters (KAMs) #

The Independent Auditors identified the following KAMs for the consolidated financial statements:

• Capitalisation and useful life of property, plant and equipment (PPE): Due to significant capex incurred (Chennai plant, expansions), judgment involved in assessing costs eligible for capitalization (including borrowing costs) under Ind AS 16, and determining useful lives. Auditors tested controls, performed substantive testing on capitalised costs, verified borrowing cost calculations, and examined management’s assessment of useful