Management Commentary on Q1 FY27 Performance

Management expressed pleasure with the Q1 FY27 performance, attributing it to strong volume growth, an optimized product mix, and continued expansion of market reach. Total sales volumes grew approximately 30% YoY to 28,372 MT. Revenue exceeded ₹193 Cr, registering growth of over 24% YoY. This growth was achieved despite softer steel realisations and volatility in energy and input costs. A recent moderation in certain raw-material prices was noted, although geopolitical and energy-market volatility remain key variables. The company's focus remains on scaling volumes, deepening market penetration, optimizing product mix, and maintaining cost discipline.

Q1 FY27 Financial Highlights (in ₹ Cr)

  • Operating Income: Increased from ₹155.29 in Q1 FY26 to ₹193.41 in Q1 FY27.
  • Other Income: Increased from ₹0.11 to ₹0.26.
  • Total Income: Increased by 24.63% to ₹193.67.
  • Raw Material Expenses: Increased from ₹124.84 to ₹162.42.
  • Employee Benefit Expenses: Increased from ₹3.71 to ₹4.31.
  • Other expenses: Decreased from ₹20.62 to ₹19.17.
  • Total Expenditure: Increased from ₹149.17 to ₹185.90.
  • EBITDA: Increased by 24.83% to ₹7.77.
  • Finance Costs: Increased from ₹1.75 to ₹2.09.
  • Depreciation: Decreased from ₹2.59 to ₹2.21.
  • PBT: Increased by 84.56% to ₹3.48.
  • Tax: Remained nil for both periods.
  • PAT: Increased by 84.56% to ₹3.48.

Company Overview

Rathi Steel and Power Limited (RSPL) is a manufacturer of long steel products with over five decades of operations. It operates an integrated manufacturing facility in Ghaziabad (NCR) with steel melting and rolling operations. The company highlights its use of direct billet charging technology for stainless-steel wire rod production, which enhances energy efficiency.

Operational Capacity & Utilization

  • Steel Melting Shop Installed Capacity: 85,000 TPA
  • Steel Melting Shop Capacity Utilization: 53%
  • Rolling Mill Installed Capacity: 200,000 TPA
  • Rolling Mill Capacity Utilization: ~51.5%
  • Green Power Mix: ~32%

Production Volumes (in MT)

| Particulars | FY24 | FY25 | FY26 |

| Billets | 49,584 | 54,517 | 45,452 |

| Rolled Products | 59,489 | 47,440 | 1,02,972 |

Product Portfolio & Applications

  • Stainless Steel Wire Rods: Available in 200, 300 & 400 Series. Applications include engineering, automotive, fasteners, wire mesh, medical, and household.
  • Mild Steel TMT Bars: Grades include Fe 500, Fe 500D, Fe 550, and Fe 550D. Applications include industrial projects, public construction, residential, commercial, infrastructure, and bridges. GreenPro Type-1 Ecolabel Certified.
  • Stainless Steel Flats: Applications include auto components, utensils, construction, fabrication, and industrial equipment.
  • Stainless Steel Billets: Primarily for captive consumption to ensure consistent quality for downstream products.

Sustainability Initiative

The company's Fe 550 Grade TMT Rebars are GreenPro Ecolabel certified by CII. This certification supports LEED and IGBC Green Building credits and promotes low-carbon construction.

Strategic Growth Roadmap

  • Operational Excellence: Target to increase Steel Melting Shop utilization from ~60% towards 80% and resume full-scale utilization of the TMT rolling mill.
  • Sustainable Manufacturing: Plans include rooftop solar installation and increasing renewable power procurement.
  • Long-Term Financial Focus: Target approximately 20% revenue CAGR over the next two years.
  • Product & Market Expansion: Scale up stainless steel reinforcement bars; expand share of Fe 550D TMT bars; develop additional downstream products like Bright Bars, Wires, Pickled & Annealed Bars/Rods.
  • Brand & Market Leadership: Increase contribution from retail (B2C) business and expand dealer network.

Full-Year Financial Performance (in ₹ Cr)

| Particulars | FY24 | FY25 | FY26 |

| Revenues | 493.19 | 503.15 | 716.05 |

| Other Income | 3.10 | 2.28 | 0.44 |

| Total Revenue | 496.28 | 505.43 | 716.49 |

| EBITDA | 24.25 | 24.31 | 28.90 |

| EBITDA Margin | 4.89% | 4.81% | 4.03% |

| PAT | 23.53 | 13.95 | 12.87 |

| PAT Margin | 4.74% | 2.76% | 1.80% |

Balance Sheet Highlights (in ₹ Cr)

| Equities & Liabilities | FY24 | FY25 | FY26 | | Assets | FY24 | FY25 | FY26 |

|------------------------|------|------|------|--|--------|------|------|------|

| Equity Share Capital | 85.06 | 86.36 | 86.36 | | Fixed assets | 70.35 | 89.65 | 103.35 |

| Reserves & Surplus | 27.61 | 41.77 | 54.63 | | Inventories | 29.59 | 50.09 | 55.93 |

| Long Term Borrowings | 0.00 | 3.57 | 12.12 | | Trade Receivables | 16.26 | 24.77 | 56.54 |

| Short Term Borrowings | 0.00 | 34.17 | 32.68 | | Cash & Bank Balance | 6.50 | 1.29 | 2.26 |

| Total Equity & Liabilities | 219.50 | 265.42 | 327.19 | | Total Assets | 219.50 | 265.42 | 327.19 |

Industry Context

The presentation notes that India's finished steel consumption is projected to grow ~11% by FY26 and the construction market is expected to reach US$1.42 trillion by 2027. The Union Budget FY27 allocated ₹12.2 lakh Cr towards infrastructure development. The Specialty Steel PLI scheme was also mentioned.