India’s Vardhman Special Steels sales volume rose by 32pc in Q2 to 43,986mt from the prior year quarter boosted by robust demand from the domestic auto industry, according to the company’s Q2 results release.
Vardhman Special Steels caters mainly to automotive and engineering sector. In India, demand from the automobiles sector recovered significantly and surpassed pre-pandemic levels. The improvement in auto demand has boosted sales and the company is negotiating higher prices with end-users, as reported by Davis Index.
In Q2, strong auto steel demand led to higher sales. The company’s revenues rose by 16.65pc to Rs2,470.9mn ($33.32mn) from the prior year quarter. EBITDA, including other income, rose to Rs266.7mn, up by 234.52pc from the prior year on account of higher sales volume and lower raw material cost. Net profit was Rs89.4mn compared to a loss of Rs31.7mn in the prior year.
Vardhman Special’s Q1 was severely impacted by the COVID-19 pandemic which pulled down the company’s H1 sales volume by 19.16pc to 56,473mt. The national lockdown led to weak financial performance in Q1 due to lower volumes, a drop in selling price and constant fixed costs. Revenue from operations in H1 fell by 30pc to Rs3,149.5mn. EBITDA declined by 20.8pc to Rs190mn from the prior year H1. The company’s net loss widened in H1 to Rs38.3mn compared to a loss of Rs20.mn in the prior year period.