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Tega Industries – Steady Raw Material Cost Pass-Through To Improve Ebitda Margin: ICICI Securities

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Tega Industries Ltd.’s senior management hosted analyst meet on June 15, 2022. Management highlighted global steel mill liner market (ex-China) currently stands at $900 million (Tega’s market share is 5%) and composite mill liner market size is $400 million (Tega’s market share is 16%) which is likely to grow at 2-3% compound annual growth rate.

According to management, DynaPrime Mill Liner (25% of FY22 sales) acceptance is increasing and the segment is likely to grow at a CAGR of 25-30% (33% growth in FY22) in near to medium term mainly on account of key benefits like higher throughput, lower power consumption and manpower cost over steel mill liners.

Non-mill liner segment will grow at 10-12%, as per Tega.

During FY22, Ebitda margin contracted 400 basis points YoY to 19.2%. Management is confident that with steady raw material cost pass-through and easing of logistical challenges, Ebitda margin should improve to 21-23%.

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