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IMFA Ltd, a ferrochrome miner, anticipates economic uncertainties in European markets to impact chrome prices by 6-7% in Q4FY24 (January–March). Ferro-chrome is crucial in stainless steel production, with European consumption influencing global prices. The company aims for prices to remain around ₹ 100,000 per tonne in FY25.
Prem Khandelwal, CFO of IMFA Ltd, reported an improvement in realisations to ₹ 103,000 per tonne in Q3FY24, a rise of 11% from the previous year. However, prices declined in January due to ongoing stress in European economies.
The decline is around 6-7% for the month, and a similar trend is expected throughout the quarter. Khandelwal mentioned the expectation that ferrochrome prices will range between ₹ 96,000–₹ 100,000 per tonne in the quarter.
Despite challenges, IMFA Ltd is hopeful due to its substantial export-driven business. About 90-95% of the company's volumes and sales come from exports, mainly to Asian countries like Korea, Taiwan, and Japan. This provides a cushion, with Korea and Taiwan accounting for over 50% of sales.
The company is targeting an EBITDA margin of 23-24% in the fiscal year, a significant increase from the 19% reported in FY23. Cost control measures and lower thermal coal prices have contributed to this improvement. The cost per tonne is down to ₹ 72,000 (10% YoY decrease), and coal costs have reduced to ₹ 3 per unit of power produced (from ₹4).
In Q3FY24, IMFA Ltd reported a PAT (Profit After Tax) of ₹ 108 cr, a tenfold increase from ₹10 cr in the year-ago period. Earnings before interest, tax, depreciation, and amortisation (EBITDA) rose by 150% YoY to ₹ 168 cr (from ₹ 67 cr). The company remains optimistic about its performance, balancing challenges in the market with its strategic focus on exports and cost management.
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