Tega Industries Expects 15% Revenue Growth For Remainder Of Current Fiscal

Tega Industries Ltd., the leading manufacturer of products and consumables for the mining industry, projects a 15% steady revenue growth rate after strong Q1 results.

Mehul Mohanka, MD and Group CEO of Tega Industries, in an interview with NDTV Profit talked about the sustainability of the company’s revenue growth for the remaining three quarters of FY25. He mentioned how a revenue spill over from the March quarter of FY24 was monetised in Q1FY25. Mohanka projected steady state revenue growth levels of close to 15% for the rest of the fiscal.

“We had some revenue spill over from Q4FY24 which we expected to monetise in Q1FY25. And a large part of that has played out. When we talk about 27% YoY growth for the quarter that needs to be normalised for the spill over that we experienced from Q4 into Q1. Steady state growth levels will be closer to about 15% as we have always guided the markets,” Mohanka told NDTV Profit.

Talking about new growth and additional capacity, the CEO mentioned that the company’s plant in Chile is expected to be operational by June 2025. Mohanka expects the plant in Chile to have a revenue potential of Rs 800 crore.

“We have got some additional capacity coming through in the next year. Around June 2025 we are expecting our Chilean plant to be completely operational. That will bring additional capacity, which will help us monetise some of it in the next financial year moving on to the next few years from there on. Chile at full capacity would give us incremental revenue of Rs 800 crore going forward,” Mohanka said.

In the June quarter of FY25, Tega Industries’ consolidated revenue saw an uptick of nearly 27% at Rs 340 crore. The company’s EBITDA was up by around 63% year-on-year. Tega Industries’ margins also improved to 18.9% in Q1FY25 and its net profit increased nearly 72% YoY to Rs 36.74 crore.

The top executive of Tega Industries shared the company’s capital expenditure plans for the next two years and how the company plans to expand its capacity at the Dahej plant in Gujarat and at its upcoming plant in Chile.

“We have a new capacity coming up in Chile which is estimated to be around $30 million of spend for us and we recently announced further expansion in our plant at Dahej in India. So that sort of comes at a tune of Rs 30 crore phased over two years, that’s the capex outlay for us for the next two years around,” Mohanka said.

While the company’s capacity utilisation is currently at 65%,
Mohanka sees it holding steady at nearly 65-70% in the upcoming quarters of the current fiscal.

“We operate at about 65% capacity utilisation, and we see that holding steady at about 65-70% going forward, quarter-on-quarter we do hit certain peaks in our revenues which are difficult to predict and plan for, so we always keep some headroom to take care of these peaks that we experience during the quarter,” Mohanka said.

The Tega Industries CEO also projected EBITDA to be around 21-22%.

“The company’s blended EBITDA margins will roughly be around 21-22%. The margin profiles of the two segments are completely different (OEM and consumables). In the consumables biz the margin levels are higher and in the equipment business it is a bit moderate given the fact that it is more capital intensive,” Mohanka said.

The company’s growth rates will be higher than the industry average, according to Mohanka.

Metal markets are growing at about 2.5 to 3% while the company’s business is growing around 15%. Mohanka said that he feels the company’s growth rates will always be higher than the industry average or the growth rates of the metal industry.

“Metal markets are growing at about 2.5-3% and our biz is growing at about 15% if I look at annualised returns. It is happening because of multiple reasons, its market expansion, conversion, new products we are putting out in the market. We feel that our growth rates will always be higher than the industry average or the growth rates of the metal industry,” Mohanka added.