Vraj Iron and Steel , a key player in the Indian steel industry, has reported mixed financial results for the first quarter, showcasing revenue growth but a decline in profitability.

Revenue Growth Amidst Profit Squeeze

The company announced a significant increase in revenue, which rose to ₹1.38 billion in Q1, up from ₹1.14 billion in the same period last year. This 21.1% year-over-year growth indicates strong demand for the company's products despite challenging market conditions.

However, the bottom line tells a different story. Vraj Iron and Steel's net profit for the quarter stood at ₹73.30 million, marking a substantial decrease from ₹148.00 million reported in the previous year. This represents a 50.5% decline in net profit, pointing to increased cost pressures and potentially tighter margins in the steel sector.

EBITDA and Margin Compression

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also saw a notable decline, dropping to ₹132.00 million from ₹211.00 million in the same quarter last year. This represents a 37.4% decrease in EBITDA.

More tellingly, the EBITDA margin compressed significantly, falling to 9.54% from 18.41% in the corresponding period of the previous year. This sharp contraction in margin suggests that while the company managed to boost its sales, it faced considerable challenges in maintaining its operational efficiency and cost structure.

Financial Highlights

The contrasting trends in revenue and profitability highlight the complex dynamics at play in the steel industry. While Vraj Iron and Steel has successfully expanded its top line, the company appears to be grappling with increased costs or pricing pressures that are eating into its profits.

As the steel sector continues to navigate global economic uncertainties, supply chain challenges, and fluctuating raw material costs, companies like Vraj Iron and Steel will need to focus on operational efficiencies and strategic pricing to maintain profitability while capitalizing on growth opportunities.

Vraj Iron and Steel Limited has submitted its monitoring agency report for the quarter ended June 30, 2025, detailing the utilization of its Rs. 171.00 crore Initial Public Offering (IPO) proceeds. The report, prepared by CARE Ratings Limited, reveals that the company has utilized Rs. 168.08 crore of the total proceeds, with no deviations from the stated objectives.

Breakdown of IPO Proceeds Utilization

The company's utilization of the IPO proceeds is as follows:

Project Implementation Status

While the majority of the funds have been utilized as planned, the company has faced some challenges in implementing its expansion projects:

• Sponge Iron Plant: Completed in December 2024
• Captive Power Plant: Completed in March 2025, with a 2-month delay
• Billet Plant: Implementation ongoing, facing delays due to supplier issues and early monsoon onset

Financial Performance

In addition to the IPO proceeds utilization, Vraj Iron and Steel Limited has released its unaudited financial results for the quarter ended June 30, 2025:

• Revenue from Operations: Rs. 1,383.01 crore
• Profit Before Tax: Rs. 97.92 crore
• Profit After Tax: Rs. 73.26 crore

Unutilized Funds

The company reported that Rs. 2.94 crore of the IPO proceeds remain unutilized. These funds have been deployed in fixed deposits with HDFC Bank, earning a 6.60% return.

Vraj Iron and Steel Limited's judicious use of its IPO proceeds, despite some project delays, demonstrates the company's commitment to its expansion plans and financial prudence. Investors and stakeholders will likely keep a close eye on the completion of the ongoing Billet Plant project and its impact on the company's future performance.