Indsil Hydro Power & Manganese Ltd Management Discussions

[Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company is a part of the ferro alloy industry. Ferro alloys refer to a range of compounds that find application in producing steel and stainless steel. Manganese, chrome and silicon alloys form a majority of the bulk of ferro alloys produced. While chromium alloys are used in the production of stainless steel, manganese alloys are used in the production of steel and some specialized grades of manganese alloys are used in specific grades of stainless-steel making.

Your Company on a standalone basis produces high carbon silico manganese.

B. OPPORTUNITIES AND THREATS

The Company now operates 2 silico manganese smelters viz., in Palakkad, Kerala and Vizianagaram, Andhra Pradesh. The Company also operates a 21 MW captive hydro electric power plant in Idukki District, Kerala. The hydroelectric power plant has been built on a 30 year build own operate and transfer (BOOT basis) and according to the terms of agreement, the Company has to handover the hydroelectric power project to KSEBL on a free of cost basis at the end of the 30 year period. The BOOT period would end sometime in the year 2030 and the exact month of handover would depend on certain decisions to be made by the Government and Kerala State Electricity Board. Since the manganese smelter in Palakkad is completely dependent on power from the hydro electric power operations, at the end of the BOOT period, the Companys manganese smelting plant will become unviable if it has to operate from grid power and therefore will have to be shut down permanently. However, it would be pertinent to note here that the land on which the smelting plant is currently situated is developing as a residential locality with rapid urbanisation at the outskirts of Palakkad town.

The Company plans to monetize this freehold land by developing them for residential purposes after shut down of the smelter.

At the end of the BOOT period, the Company plans to either shift these smelters to its Andhra Pradesh location or depending on shifting costs/building costs, the Company may also expand its Andhra Pradesh facility on a brown field basis.

While these are the long term plans of the Company, in the short term, the silico manganese markets remain quite stable and the Companys Andhra Pradesh facility is expected to contribute reasonably strong EBIDTA for the coming year. The operations of the Palakkad plant would depend on the performance of the monsoon in the coming year.

C. SEGMENT WISE PERFORMANCE – SMELTER DIVISION

The table given below gives the operational details of the two segments of your Company viz., ferro alloy segment and power segment.

Particulars	Ferro Alloy	Hydro Power
Production (MT) / (Units)	21053 MT	52.36 Million Units
Sales (MT) / (Units)	21119 MT	52.36 Million Units
Revenue in Lakhs	14963	2477
PBDIT in Lakhs	(533)	2358

Your Company earned EBITDA of 18.25 Crores during the year 2025-2026.

POWER DIVISION

As far as the Hydro Power Station is concerned, the power generation was 52.36 million units and as compared to the previous year 44.20 million units and as compared to average generation of 43.74 Million Units per year.

D. OUTLOOK

Already dealt with.

E. RISKS AND CONCERNS

Already dealt with under threat.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY i) COST CONTROL

Every single cost item goes through a thorough internal audit and in several stages as well. As part of the cost control system, every single aspect of costs goes through stringent pre-expenditure checks and audits as well. ii) OPERATIONS

Process and deliverables pass through stringent control systems on a continuous basis. These systems are highly adequate and infact play a vital role in productivity, growth, efficiency, improvement etc.

G. CAUTIONARY FORWARD-LOOKING STATEMENTS

The Company makes forward-looking statements that are subject to risks and uncertainties. All statements that address expectations or projections about the future, including, but not limited to, statements about the Companys strategy for growth, market position and financial results are forward-looking statements.

For those statements, the Company cautions that numerous important factors could affect the Companys actual results and could cause its results to differ materially from those expressed in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or events.

H. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE Rs. in lakhs

Particulars	31st March 2022	31st March 2023	31st March 2024	31st March 2025	31st March 2026
I. OPERATING RESULTS:
1. Sales	20,843	17,682	11,661	12,755	15,152
2. Operating Profit (PBIDT)	4,613	1,925	693	9,739*	1,825
3. Interest	1,572	1,358	1,179	326	2
4. Depreciation	509	421	344	297	302
5. Taxes	(730)	670	65	1,508	21.42
6. Net Income (PAT)	3,263	(524)	(896)	7,607	1500
7. Dividend Percentage	-	-	-	5.00%	6.00%
Dividend Amount	-	-	-	138.96	166.75
8. Production
Ferro Alloys (MT)	19,990	20,480	16,531	17,894	21,053
Power (Lakh KWH)	603.10	639.24	366.10	442	524

* Includes profit from sale of stake in Joint Venture

II. PERFORMANCE PARAMETERS

Particulars	31st March 2022	31st March 2023	31st March 2024	31st March 2025	31st March 2026
1. Share Capital	4,279	4,279	4,279	2,779	2,779
2. Reserves & Surplus	10,037	9,423	8,438	15,682	17,000
3. Secured Loans	10,658	10,499	9,474	-	-
4. Deferred Liabilities / (Asset)	(877)	(933)	(868)	(623)	(660)
5. Fixed Assets (Gross Block)	15,976	15,993	13,454	13,466	13,795
6. Accumulated Depreciation	(9,478)	(9,885)	(8,320)	(8,538)	(8,840)
7. Investments	3,997	3,996	3,971	1,757	3,230
8. Net Current Assets	5,919	3,880	8,580	10,895	13,989

 

Particulars	31st March 2022	31st March 2023	31st March 2024	31st March 2025	31st March 2026
III. RATIOS
1. Profit after tax / sales (%)	15.65	(2.96)	(7.68)	59.65	9.90
2. Return on Net Worth (%)	22.79	(3.82)	(7.04)	41.21	7.58
3. Earnings per Share ( )	11.74	(1.88)	(3.22)	27.38	5.40
4. Cash Earnings per share ( )	13.57	(0.37)	(1.98)	28.44	6.48
5. Debt Equity Ratio	0.74	0.77	0.74	Nil	Nil
6. Book Value Per Share ( )	51.51	49.30	45.76	66.43	71.17

I. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Number of people employed 192

Your Company has always endeavoured to retain quality manpower talent. Conscious efforts are on to develop a Human Resource (HR) policy, accordingly, giving thrust for effective participation of potential human resources at all levels in the activities of the Company.

The HR policy has been designed so as to give thrust on a transparent and performance-driven work culture which ensures challenges and opportunities for the deserving.

The Company in fact, adopts intensive selection process to ensure that best talents with great attitude are recruited so that the culture of teamwork and dedication remain intact.

J. FINANCIAL RATIOS

The Key Financial ratios of the Company are given below with explanation in case of significant changes

Financial Ratio	FY 2025-26	FY 2024-25	% Change in 2025-26 FY 2024-25	FY Reason for change compared to
Debtors Turnover (Days)	6	3	100	Increase in sales turnover during the year
Inventory Turnover (Days)	263	318	(-17%)
Interest Coverage (Ratio)	NA	29	NA	NA
Current Ratio	10.07	5.37	88%	On account of increase in investments out of accumulated reserves.
Debt Equity Ratio	NA	NA	NA	NA
Operating Profit Margin (%)	0.12	0.77	(-84%)
(EBIDTA after OCI and excep- tional item / Total Revenue)				Due to substantial profits in the previous year on account of sale
Net Profit Margin (%)	0.10	0.60	(-83%)	of investments held by the Company.
Return on Net Worth (%) (PAT after OCI / Net Worth)	0.07	0.42	(-83%)

NA - Not Applicable