Vesuvius India Ltd (VESUVIUS) Annual Report Analysis & Insights

Vesuvius India Ltd

| Annual Report 2025-26

⬤13th Apr 26

Summary : Vesuvius India achieved strong revenue growth and profitability in 2025, driven by strategic capacity expansion, technological innovation, and disciplined execution, despite global economic challenges.

Annual Report Analysis & Insights

Financial Disclosures

Cost of materials consumed: ₹819.88 crore (2025), ₹649.76 crore (2024).
Purchase of stock-in-trade: ₹386.93 crore (2025), ₹366.22 crore (2024).
Employee benefits expense: ₹142.15 crore (2025), ₹116.12 crore (2024).
Finance cost: ₹1.21 crore (2025), ₹1.18 crore (2024).
Depreciation and amortisation expense: ₹61.65 crore (2025), ₹45.85 crore (2024).
Other expenses: ₹426.03 crore (2025), ₹366.61 crore (2024).
Total expenses: ₹1,806.89 crore (2025), ₹1,568.19 crore (2024).
PBIDT: ₹419.24 crore (20% margin in 2025).
PBT: ₹356.38 crore (17% margin in 2025).
PAT: ₹264.08 crore (13% margin in 2025).
CSR expenditure: ₹5.16 crore (2025), ₹3.79 crore (2024).
Trade receivables: ₹483.69 crore (2025), ₹385.37 crore (2024).
Trade receivables turnover ratio (in days): 75.37 (2025), 69.20 (2024).
Trade payables turnover ratio (in days): 73.51 (2025), 76.71 (2024).
Accounts payable cycle: 114 days (2025), 104 days (2024).
Revenue from Operations: ₹2,104.33 crore (2025), ₹1,868.57 crore (2024).
Growth of approx. 13% in revenue from operations.
Sales of products (finished goods, stock-in-trade) contributed ₹1,191.12 crore (2025).
Sales of services contributed ₹908.83 crore (2025).
Export revenue: ₹61.52 crore (2.9% of total turnover).
Net cash inflow from operating activities: ₹177.46 crore (2025), ₹258.12 crore (2024).
Net cash outflow from investing activities: ₹17.58 crore (2025), ₹232.86 crore (2024).
Net cash outflow from financing activities: ₹30.17 crore (2025), ₹26.70 crore (2024).
Cash and cash equivalents at year-end: ₹288.03 crore (2025), ₹158.32 crore (2024).
Foreign Exchange Earnings: ₹58.4758 crore (2025).
Foreign Exchange Outgo: ₹535.4207 crore (2025).
Claims against the Company not acknowledged as debts: Sales tax/VAT (₹34.87 crore), Excise duty/Custom duty/Service tax (₹2.48 crore), Income-tax (₹6.36 crore).
No material foreseeable losses on long-term contracts.
No derivative contracts outstanding.
Impact of Supreme Court Judgment on provident fund not likely to have significant impact.
Total Assets: ₹2,149.64 crore (2025), ₹1,846.85 crore (2024).
Total Equity: ₹1,663.89 crore (2025), ₹1,430.99 crore (2024).
Net Worth increased by 16.28% to ₹1,664 crore.
Debt-free balance sheet (Debt-equity ratio 0.01).
Current Ratio: 3.21 (2025), 3.12 (2024).
No borrowings from banks and financial institutions.
No loans/advances granted to promoters/related parties.
No material uncertainty exists regarding ability to meet liabilities within one year.
All related party transactions are in ordinary course of business and at arm's length basis.
Outstanding balances with related parties are unsecured and interest-free.
No provision held against receivables from related parties.
No funds advanced/loaned/invested by Company to related parties with understanding of re-lending.
No funds received by Company from funding parties with understanding of re-lending.
Company does not have subsidiaries, associates, or joint ventures.
Financial statements are prepared on a standalone basis.

Corporate Overview

Operations in India (4 plants, 1 office across 21 states).
Caters to both domestic and international markets (25 countries).
Margins moderated due to input-cost pressures and impact of newly commissioned capacities.
Profit Before Tax margin decreased from 19% (2024) to 17% (2025).
Net Profit Margin decreased from 14.16% (2024) to 12.55% (2025).
Return on Net Worth decreased from 24.46% (2024) to 21.49% (2025).
Raw-material price volatility and energy cost fluctuations.
Pricing pressure from large end-users.
Environmental and regulatory compliance leading to higher costs.
Two work-related injury incidents recorded in 2025 (LTIFR 0.26).
19 discrimination complaints filed by employees/workers in 2025 (7 pending).
Part of the global Vesuvius Group, leveraging global expertise and cutting-edge technologies.
Relies on a diverse network of suppliers for raw materials.
Supply chain resilience is strengthened through localisation efforts, reducing import dependence.
Human rights requirements form part of vendor contracts.
Advanced manufacturing company serving core industrial and metallurgical sectors with specialised products and solutions.
Emphasises flexibility and disciplined execution for sustained growth, profitability, and strong cash generation.
Focuses on technological leadership, reliability, and superior service to deliver solutions that enhance efficiency, strengthen performance, and create lasting value.
Operates across the full metallurgical value chain, combining materials expertise, engineering capabilities, and application knowledge to support multiple stages of production, from melting and refining to casting and finishing.
Offerings include Flow Control products (consumable ceramic products, systems, robotics), Advanced Refractories, and Foundry solutions.
Provides refractory services (43% of turnover) and manufactures refractory products (57% of turnover).
Confident in India's long-term growth and company's strategic direction.
Emphasizes disciplined execution, operational excellence, and sustainable value creation.
Acknowledges challenging global environment but highlights India's resilience.
Committed to innovation, sustainability, and stakeholder value creation.
Serves India's leading steel, aluminium, and industrial producers.
Partners with customers to solve critical operational hindrances and bolster performance at scale.
Builds enduring customer partnerships based on trust, commitment, and collaboration.
Provides on-site technical and operational support to customers.
Supported Tata Steel's blast furnace operations to achieve 50 million tonne milestone.
Enabled record 861 heats in SMS-1 furnace at Jayaswal Neco Industries Limited.
Achieved world record performance at Tata Steel Meramandali (47 heats in single strand tundish).
Enabled operational milestone at Jai Raj Ispat using MicroMill Direct Casting system.
Steel industry (70% of refractory consumption): ironmaking, steelmaking, secondary metallurgy, continuous casting.
Cement industry (7% of refractory consumption): kilns, calciners, preheaters.
Non-ferrous industries (6% of refractory consumption): copper, aluminium, nickel, petrochemical, gas processing.
Other high-temperature applications (17% of refractory consumption).
Aluminium sector: power transmission, transportation, construction, packaging, renewable energy, consumer durables.
Hydrocarbon Processing: petrochemical, gas processing, other hydrocarbon facilities.
Added ~250,000 TPA capacity at Visakhapatnam through new Alumino-Silicate and Basic Monolithic facilities.
Higher throughput from existing assets at Kolkata and Mehsana through debottlenecking initiatives.
100% of energy consumption sourced from solar and IREC-backed renewable power.
Installed 1332 kWp solar PP utilized at >90% during 2025, with additional 1300 kWp planned for Visakhapatnam in 2026.
Total energy consumed from renewable sources: 6160 GJ (2025).
Total energy consumed from non-renewable sources: 221293 GJ (2025).
Water saved in RWH: 2396 KL.
Electricity saved through captive solar capacity: 1888289 kWh.
Zero Liquid Discharge (ZLD) system implemented at Mehsana plant.
Commissioning of Alumino-Silicate and Basic Monolithic facilities at Visakhapatnam.
Strengthening Mould Flux operations at Visakhapatnam.
Additional 1300 kWp solar PP installation planned for Visakhapatnam in 2026.
Approximately 35 Lakhs incurred on energy saving equipment during the year.
Engineering study for RTO at Kolkata plant in advanced stages for 2026 deployment.
Engineering study for additional 1300 kWp solar PP at Parawada, Visakhapatnam in advanced stages for 2026 deployment.

Risk Factors

Global trade tensions and tariffs.
Raw material and energy price volatility.
High dependence on steel industry cycles.
New carbon border adjustment mechanism.

Key Drivers

India's robust macroeconomic growth.
Strong infrastructure-led demand for steel.
Strategic capacity expansion and new facilities.
Focus on advanced technology and innovation.

Auditor’s Report

Unqualified opinion on financial statements, giving a true and fair view.
Unqualified opinion on internal financial controls, stating they are adequate and operating effectively.
Appropriateness of Recognition of Revenue under Ind AS 115, due to significance of amounts involved.
No instances of material fraud by the Company or its officers/employees were noted or reported.
Backup of certain books and papers in electronic mode not maintained daily on Indian servers (Jan 1, 2025 to Aug 4, 2025).
Accounting software's audit trail not enabled at database level to log direct data changes.
Title deeds for Freehold land at Vishakhapatnam (₹3,193 Lakhs) not yet in Company's name, pending completion of activities for sale deed execution.

Board Commentary

Mr. Biswadip Gupta appointed as Non-executive Non-Independent Director (effective Sep 25, 2025).
Ms. Rashmi Joshi appointed as Independent Director (effective Sep 24, 2025).
Mr. Sridhar Gorthi appointed as Independent Director (effective Sep 24, 2025).
Mr. Sudipto Sarkar ceased to be a director (effective Sep 23, 2025).
Miss. Nayantara Palchoudhuri ceased to be an Independent Director (effective Sep 24, 2025).
Mr. Rohit Baheti ceased to be CFO (effective Sep 21, 2025).
Mr. Subhabrata Nandi appointed interim CFO (effective Nov 11, 2025).
Mr. Neeraj Kumar Jumrani appointed CFO (effective Mar 16, 2026).
Board recommended dividend of ₹1.50 per equity share of ₹1/- each for FY 2025.
Dividend entails cash outflow of ₹3,044 Lakhs (₹2,943 Lakhs in 2024).
Policy aims for sustainable dividend linked to long-term growth objectives.
Dividend is subject to shareholder approval at the AGM.
Key risks remain externally driven, including trade tensions, geopolitical shocks, and uneven global disinflation.
High dependence on steel industry cycles, impacting refractory volumes.
Raw-material price volatility and global supply constraints affecting margins.
Energy intensity and cost pressures from power and fuel fluctuations.
Pricing pressure from large end-users.
Environmental and regulatory compliance leading to higher capital and operating costs.
No significant and material orders passed by regulators or courts impacting going concern status.
No complaints of sexual harassment received under POSH Act.
Complied with Maternity Benefit Act, 1961.
No non-compliance related to capital markets; no penalties or strictures imposed.
No amounts remaining unspent under Section 135(5) of the Act.
No statutory dues outstanding for more than six months.
No instances of bribery/corruption disciplinary action against Directors/KMPs/employees/workers.
No complaints regarding conflict of interest.
No product recalls due to safety issues.
No data breaches reported.
Complied with all mandatory requirements under SEBI LODR.
No material changes and commitments affecting financial position between Dec 31, 2025 and report date.
Estimated financial impact of contracts remaining to be executed on capital account: ₹3,064 Lakhs (2025).

Corporate Governance

Strong governance framework built on robust internal controls, responsible sourcing, strict adherence to regulatory requirements.
Code of Conduct for Directors and employees, with annual affirmations.
Policies on human rights, anti-corruption, fair business practices, and whistleblower protection.
Vigil Mechanism and Speak Up and Incident Reporting (Whistle Blowing) Policy in place.
Remuneration Policy and CSR Policy available on company website.
Global Data Protection Policy implemented for cyber security and data privacy.
Board comprises 9 Directors: 1 Executive, 8 Non-Executive (3 Independent, 5 Non-Independent).
3 Independent Directors (including 1 woman director).
Independent Directors meet criteria of independence as per Act and SEBI LODR.
No directors are related to each other or to Key Managerial Personnel.
Independent Directors carried out annual performance evaluation of Chairperson, non-independent directors, and Board as a whole.
Audit Committee consists of 4 members, with 3 being Independent Directors.
Board has constituted various committees: Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee, Stakeholders' Relationship Committee, Board Management Committee.
Composition and terms of reference comply with Act and SEBI LODR.
All recommendations made by committees were accepted by the Board.
Disciplined oversight, strong internal controls, and structured approach to managing risks.
Internal financial controls are adequate and operating effectively; no reportable material weaknesses identified.
Company complied with all mandatory and most non-mandatory SEBI LODR requirements.
Independent directors met only once during the financial year 2025 (non-mandatory deviation).

Management Discussion & Analysis

Future Strategy

Building structural advantage, strengthening operational resilience, sharpening cost structures.
Enhancing asset utilisation, deepening customer engagement.
Investing in market-leading solutions that enhance customer productivity and efficiency.
Continuing to invest in capacity, technology, and people.
Strengthening resilience through localisation, enhanced use of digital tools, and deeper collaboration.
Aligning investments and process improvements with cleaner production, resource efficiency, reduced environmental impact.
Achieving Net Zero carbon emissions by 2050.
Expanding predictive service models, enhancing metallurgical advisory capabilities, accelerating deployment of sustainable solutions.

Industry Overview

Indian steel industry positioned for sustained long-term growth (9-10% demand growth in 2025).
Government-led infrastructure programs drive structural steel demand.
India's crude steel capacity rose to ~200-205 MT in FY25, targeting 300 MT by 2030-31.
Indian cement industry expected to record steady growth, critical for infrastructure.
Indian aluminium sector poised for steady growth, second-largest producer globally.
Refractories market expanding, aligned with growth in core manufacturing and infrastructure sectors.
Demand shifting towards higher-performance, value-added refractory solutions.

Macroeconomic Outlook

India's GDP growth ~6.5% in FY 2024-25, fastest-growing major economy.
FY 2025-26 growth expectations 6.5-7.0%, mild upside bias.
Resilient consumption, strong public capital expenditure, robust services performance.
Inflation eased, RBI lowered FY 2025-26 projection to ~2.6%.
Robust external position, current account deficit ~0.2% of GDP.
Union Budget FY 2025-26 reinforced fiscal consolidation, capex 11.21 lakh crore.

Operational Focus Areas

Disciplined execution, cost efficiency, working capital optimisation, and safety-led performance.
Upgrades at Kolkata, Mehsana, and Visakhapatnam to improve process control, automation, and quality standardisation.
Integration of advanced global product platforms into domestic manufacturing.
Digital integration strengthening operational oversight and customer engagement.
Condition monitoring-led maintenance and reduced downtime.
Automation-driven process stability and reduced manual dependency.
Expanding renewable energy adoption, improving resource efficiency, reducing waste, and strengthening circular practices.
Implementing Zero Liquid Discharge (ZLD) system at Mehsana plant.
Embedding a strong safety-first culture through rigorous standards, continuous training, and proactive risk management.
Digitally enabled risk identification and structured incident prevention (VSAT platform, 8D methodology).
Leadership engagement and structured safety programmes (Executive Safety Walks, Safety Breakthrough, Turbo S).

Performance Drivers

Increased revenue, strengthened scale, enhanced operational efficiency, advanced sustainability initiatives.
Sustained demand across steel and infrastructure sectors, improved product mix, deeper customer engagement.
Ramp-up of new capacities enhancing service to key industrial clusters.
Improved operating leverage, higher capacity utilisation, disciplined cost management.
Innovation-driven solutions optimizing processes, enhancing performance, reducing environmental impact.
Technological leadership and product differentiation creating differentiated products and solutions.
R&D and new product development efforts focused on green steelmaking technologies.

Risk Control Measures

India's strong domestic demand base, policy agility, stable macroeconomic framework.
Strengthened supply chain resilience through localisation and reduced import dependence.
Structured approach to eliminate supply chain risks (mitigate sole supplier, geographical diversification, alternate recipe formulations).
Structured risk register to mitigate sourcing risks based on early warning indicators.
Disciplined procurement and financial practices supporting supplier liquidity.
Strong corporate governance, prudent risk oversight, and disciplined capital allocation.
Digital safety systems and proactive risk management practices ensuring operational continuity.
Structured and continuous approach to identify, evaluate, and manage key business risks.
Customer credit risk managed through evaluation of credit profile and regular monitoring.
Liquidity risk managed based on business plans ensuring timely availability of funds.
Foreign currency risk managed through approved risk management policies.

Critical Risks

Externally driven risks: trade tensions, geopolitical shocks, uneven global disinflation.
High dependence on steel industry cycles, impacting refractory volumes.
Raw-material price volatility and global supply constraints affecting margins.
Energy intensity and cost pressures from power and fuel fluctuations.
Aluminium smelting is energy-intensive, sensitive to energy price volatility.
Carbon Border Adjustment Mechanism (CBAM) impacting aluminium exports to EU.
Transition market risk from shift to EAF steelmaking reducing market size.
Environmental and regulatory compliance increasing capital and operating costs.
Credit risk from customers failing to meet contractual obligations.
Liquidity risk from inability to meet financial liabilities.
Market risk from foreign currency exchange rate and interest rate fluctuations.