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


BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

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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