Indian Metals & Ferro Alloys (IMFA) Management meet note - Angel Broking

We met the management of IMFA to get an update on its business.

Company background: IMFA is the largest and backward integrated ferro alloy producer in India. IMFA's production facility is spread over Choudwar and Therubali units in Orissa and comprises of six furnaces with production capacity of 2,75,000 tonnes. IMFA has capability of producing ferro silicon, ferro manganese and ferro chrome. Currently, the company has stopped production of ferro silicon and ferro manganese. In FY2012, the company produced 1,96,160 tonnes of ferro chrome.

Coal block mining lease awaited: The company has received Stage II forest clearance for its Utkal coal mine. However, the company is awaiting signing of mining lease (no timelines stated for the same). Power costs constitute 30-50% of cost of production for ferro chrome producers. Hence, once operational, the captive coal from this mine would help the company reduce its power costs significantly. Currently, the company meets ~50% of its coal requirement as linkage from Coal India and remaining 50% is sourced via e-auctions.

Expanding power capacity: During January 2013, the company commissioned 1st unit of 2x60MW of captive power plant at Choudwar in Orissa. Its current power generation capacity stands at 198MW. The 2nd unit of 60MW power plant is expected to be commissioned in February 2013.

Currently we do not have a rating on the stock.

Source : Equity Bulls

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