Demand looking “remarkable”, Kamdhenu Group CFO says

Harish Kumar Agarwal, Chief Financial Officer of Kamdhenu Group, said demand is looking robust for the next 12 months owing to construction in both urban and rural regions.

“The demand for TMT steel bars in India is experiencing a significant upswing, driven by vigorous construction endeavour in urban and rural regions…the trajectory of TMT bar demand is anticipated to maintain its robust growth in the next 12 months,” Agarwal told ETCFO.

The CFO shared that amid strong demand prospects, Kamdhenu has plans to increase steel production capacity through franchise route to 50 lakh tonnes by this financial year end from currently 40 lakh tonnes. Kamdhenu aims to reach the brand revenue of Rs 25,000 crore by the FY24 end.

Kamdhenu Ltd, the Group’s steel entity, posted Rs 393 crores in H1FY24, a growth of 3% year-on-year. Its total brand turnover for H1 FY24 stood at Rs 11,935 crore as against Rs 10,225 crore in annual H1FY23, a 17% growth year-on-year.

Paints business

Kamdhenu Group CFO painted similar growth prospects for his paints business, which is carried under Kamdhenu Ventures.

“We continue to see strong momentum in the paint business. This can be primarily attributed to our constant efforts to improve our sales mix with a large focus on premium products. Also, a booming real estate sector, increased urbanization, a growing middle-class population with higher disposable income, and the government’s increasing focus on infrastructure development and affordable housing schemes has further aided this demand,” Agarwal said.

Kamdhenu Ventures’ revenues grew 7% year-on-year in H1FY24 to Rs 127 crore, while its EBITDA stood at Rs 8.9 crores, compared to minus Rs 0.5 crores during the same time last year.

The CFO aims to clock a Rs 1000 crore revenue with an EBITDA of 16% by FY28 end for his paints business.

In November, Kamdhenu raised Rs 65 crore through qualified institutional placement.

The CFO said, “The fund-raising serves the crucial purpose of ingesting capital into Kamdhenu Colour and Coatings Limited (KCCL), our wholly owned subsidiary and the other corporate purposes. The KCCL funds have been utilized in several purposes, which include meeting the working capital requirement of the paint business and the reduction in working capital debt.”

Top priorities

Key priorities for the CFO in the next 12 months include elevating bar capacity to 50 lakh tonnes in the steel business, with an annual increase of 5 lakh tonnes.

In the paint business, the focus of the CFO is on expanding into underserved smaller towns through an extensive distribution network, capitalizing on urbanization and economic growth, he said.