Indian Metals and Ferro Alloys Targeted for Rs 1860, Analyst Says
Indian Metals & Ferro Alloys Sees Improved Performance in Q1FY27
Indian Metals & Ferro Alloys (IMFA) has taken control of the 0.1 million tonne KNR-2 facility from Tata in February 2026 and has been operationalising all four furnaces since March 2026. This is expected to yield an additional monthly volume of approximately 6,000 tonnes. With the existing Choudwar and Therubali facility, along with the recently commissioned KNR 2, IMFA expects a volume of approximately 80,000 tonnes in Q1FY27.
The company's current realisation in the domestic and export markets ranges from Rs 118-120,000 per tonne. As a result, we expect a sequentially better performance in Q1FY27. The KNR-1 facility is progressing as per timelines, with coal trials and pre-commissioning activities expected to begin in the next few weeks. The furnaces are scheduled to be operationalised by July 2026.
IMFA expects weighted cost savings of approximately Rs 3-4,000 per tonne once operations at KNR 1 and KNR 2 stabilise. The company's ethanol project is also progressing as per timelines, with project commissioning expected by Q2FY27. Additionally, IMFA's total renewable energy (RE) portfolio has increased to 135 MW, thanks to a recent 65 MW hybrid RE contract. This is expected to come on stream between Q2FY27 and June 2027, sufficing approximately 40% of the company's total energy requirement.
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| Facility | Existing Capacity (m tonne) | Expected Capacity (m tonne) |
|---|---|---|
| Choudwar and Therubali | 0.384 | 0.384 |
| KNR 1 and 2 | 0.1 (0.1) | 0.1 (0.1) |
| Total | 0.484 | 0.534 |
IMFA has paved the way to enhance its current installed capacity to 0.484 million tonnes in FY27 (from 0.384 million tonnes), eventually reaching 0.534 million tonnes by FY28e. However, due to labour availability issues and peak summer season impacting productivity, we have slightly trimmed our FY27 estimate by 4.9%.
Maintaining BUY Rating
However, we have maintained our FY28e EBITDA estimate, as we had already incorporated cost savings expectation in our estimates. Considering capex progressing as per timelines, higher ferrochrome prices, and expected margin improvement, we remain positive on IMFA and maintain a BUY rating with an unrevised SOTP-based target price of Rs 1,860.
Investor Takeaway
Investors should expect sequentially better performance in Q1FY27 due to the operationalisation of new furnaces.
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