Pune-based Kalyani Steel, a key player in India’s iron and steel forging sector, is facing significant financial headwinds. As input costs rise and the market is flooded with cheap imports, the company’s margins and revenue growth have come under pressure. According to RK Goyal, Managing Director of Kalyani Steels, the company expects flat revenues for 2025, with no significant increase in earnings before interest, taxes, depreciation, and amortisation (EBITDA).
Kalyani Steel’s challenges are primarily driven by escalating input costs, particularly iron ore prices, which have surged by nearly ₹1,000 per tonne, reaching ₹1,700-₹1,800 per tonne. Additionally, the depreciation of the Indian rupee has exacerbated the cost of essential imports, including ferroalloys and refractories, adding a cumulative ₹3,000 per metric tonne to the company’s expenses. With the state of Karnataka proposing a rise in iron ore duties, costs are expected to climb even further. Despite a strong demand from sectors like passenger cars and two-wheelers, which are critical for Kalyani Steel’s operations, the company has been impacted by cheap imports from countries like China and Free Trade Agreement (FTA) nations, which are driving down prices and, in turn, compressing margins. Goyal has voiced concerns about the detrimental impact of these imports, urging for comprehensive action from the government.
In this context, India’s proposed safeguard duties, which are currently under investigation, could offer a glimmer of hope for the steel industry. However, while the proposed duties focus on flat products such as hot-rolled coils and sheets, Goyal has called for an expansion of the scope to include specialty steel and long products—segments critical to Kalyani Steel’s portfolio. Despite the challenges, Goyal remains optimistic about demand growth, particularly in light of the government’s push for infrastructure development and corporate capital expenditure (capex). However, Kalyani Steel is already operating at 100% capacity, meaning any substantial revenue growth appears unlikely in the short term.
As Goyal explains, the future of Kalyani Steel’s EBITDA margins will depend heavily on the sentiment in the steel market and the effective implementation of safeguard duties. For now, Kalyani Steel remains committed to maintaining its strong market position, but without significant relief from rising costs and imports, its growth prospects will continue to face significant challenges. The company, which has seen its market capitalisation surge by 151% over the past year to reach ₹4,959 crore, continues to grapple with broader industry pressures while seeking to navigate the current economic landscape.
