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Systematix Research Report
We come back optimistic from our visit to IFGL Refractories Ltd.’s Kandla plant in Gujarat, which commenced commercial production in May 2012. Established in 2007, IFGL primarily operates in specialised refractories and operating systems for the iron and steel and foundry businesses.
The company has 10 manufacturing capabilities across Asia, Europe, and North America. However, in India, IFGL has one plant each in Kandla and Vizag (Visakhapatnam) and three units in Rourkela, Odisha.
The company produces a wide range of refractory solutions, including purging plugs, gas purging refractories, flow control and slide gate systems, and casting flux. These products find applications in operations of high-temperature industrial sectors.
Refractories are essential in constructing and maintaining furnaces, flow systems, ladles, and all hightemperature processing equipment in the steel industry. The company currently derives almost 100% of its revenue from the iron and steel industry and is working towards diversifying into cement, glass, thermal power, and coal gasification industries.
In FY24, IFGL reported consolidated revenue of Rs 16 billion, up 18% YoY and Ebitda of Rs 1.5 billion at 9% Ebitda margin. The company had closing net debt of Rs 914 million during this period, with a leverage ratio (net debt/Ebitda) of 0.59 times (flat YoY).
The stock currently trades at 30 times trailing twelve months price/earning versus industry average of ~45 times; we do not have a rating on the stock.
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