Rajratan Global Wire expects volumes to rise 15% to 20% as it expands capacity in Chennai and Thailand, while high input costs and intense competition continue to weigh on margins.
Rajratan Global Wire said its second-quarter earnings reflected stronger volumes, but also the strain of a tougher cost environment, as the tyre-wire maker pushed ahead with expansion plans in India and Thailand. According to the company’s results and call highlights, consolidated net profit rose to ₹24.14 crore in the quarter, up from ₹20.55 crore a year earlier, while revenue climbed to ₹370.83 crore. The business also reported an improvement in standalone profit, signalling that higher throughput is beginning to feed through to the bottom line even as margins remain pressured.
Sunil Chaudhary, the chairman and managing director, told analysts that the company is operating close to full capacity in key markets and expects volume growth of 15% to 20% over the coming quarters. He said the Chennai plant is moving towards a 60,000-tonne setup, with the current phase expected to be completed in the present quarter, and that output there should reach at least 37,000 to 38,000 tonnes this financial year. In Thailand, where utilisation is already near full, Rajratan is planning a further 50,000-tonne brownfield expansion, which Chaudhary said would cost about ₹100 crore, far less than a greenfield alternative.
The management said pricing remains under pressure, particularly in India, where competition is intense and the company is prioritising premium customers over lower-margin business. Chaudhary said higher gas, power, transport and other input costs have offset some of the benefit from stronger volumes, leaving margins at what he called “rock bottom”. He added that the company is not seeing the kind of double-digit EBITDA margins achieved by all global peers, but believes the worst is now behind it.
A notable part of the growth story is Rajratan’s export business and its use of what it describes as “green steel” production in Thailand, where scrap accounts for 92% to 95% of raw material use. Chaudhary said the lower-carbon profile is helping the company win approvals from multinational tyre makers, particularly in Europe, where buyers are under pressure to reduce emissions and prepare for carbon rules such as the EU’s carbon border adjustment mechanism. Rajratan also expects its steel cord project to move forward, though management said it is still in trial stages and is unlikely to make a meaningful contribution to revenue until next year.
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