Sarda Energy & Minerals Ltd – Investor Presentation Summary
Key Operational Highlights
- Iron Ore Pellet production reached 2,04,962 MT in Q2 FY27 (5% YoY growth) and achieved record half-yearly production of 4,29,059 MT in H1 FY27.
- Sponge Iron production was 79,546 MT in Q2 FY27 (-8% YoY) and 1,56,258 MT in H1 FY27 (-9% YoY).
- Steel Billet production declined to 29,458 MT in Q2 FY27 (-48% YoY) due to 30 MW turbine replacement impacting production until mid-August.
- Ferro Alloys production remained stable at 50,867 MT in Q2 FY27 (0% YoY) and reached 92,515 MT in H1 FY27 (-9% YoY).
- Thermal Power (IPP) generation was 894 Mn kWh in Q2 FY27 (-21% YoY) despite a 47-day maintenance shutdown at the 600 MW plant.
- Hydro Power generation was 339 Mn kWh in Q2 FY27 (-6% YoY) impacted by weak rainfall in catchment areas.
- Domestic coal production declined 47% YoY to 2,66,628 MT in Q2 FY27 due to seasonal impact on evacuation infrastructure.
Key drivers of operational performance: Planned maintenance shutdowns, turbine replacement affecting steel production, weak rainfall impacting hydropower, and seasonal infrastructure constraints affecting coal production.
Segment-wise Performance
Performance by product category:
- Iron Ore Pellet: Q2 FY27 sales 1,05,831 MT (-8% YoY), average realization ₹9,770/MT
- Sponge Iron: Q2 FY27 sales 50,352 MT (53% YoY), average realization ₹25,961/MT
- Steel Billet: Q2 FY27 sales 4,280 MT (-64% YoY), average realization ₹40,004/MT
- Wire Rod: Q2 FY27 sales 13,859 MT (-57% YoY), average realization ₹43,491/MT
- H.B Wire: Q2 FY27 sales 9,056 MT (12% YoY), average realization ₹46,840/MT
- Ferro Alloys: Q2 FY27 sales 50,403 MT (2% YoY), domestic realization ₹78,278/MT for FeMn and ₹76,323/MT for SiMn
Explanation of significant changes in segment performance: Steel products segment impacted by turbine replacement, while sponge iron showed strong sales growth. Ferro alloys maintained stable performance.
Financial Highlights
Consolidated Q2 FY27:
Revenue: ₹1,453 crore
EBITDA: ₹564 crore
PAT: ₹320 crore
EPS: ₹8.7
EBITDA Margin: 37.5%
PAT Margin: 21.3%
Consolidated H1 FY27:
Revenue: ₹3,061 crore
EBITDA: ₹1,326 crore (highest-ever half-yearly, up 3.9% YoY)
PAT: ₹799 crore
EPS: ₹21.7
EBITDA Margin: 41.2%
PAT Margin: 24.8%
YoY comparison: Q2 FY27 Total Income declined 5.7% YoY to ₹1,505 crore, while H1 FY27 Total Income declined 2.6% YoY to ₹3,221 crore.
Drivers of financial performance: Higher focus on energy segment, one-time prior-period tariff true-up income of ₹125 crore relating to Sikkim hydropower plant included in H1 results.
Key Risks: Raw material price fluctuations, regulatory risks, operational outages due to maintenance shutdowns.
Balance Sheet Snapshot
As of September 2026:
Tangible Networth: ₹8,036 crore
Long Term Borrowings: ₹1,990 crore
Short Term Borrowings: ₹428 crore
Cash & Cash Equivalents: ₹1,024 crore
Net Fixed Asset: ₹6,098 crore
CWIP: ₹506 crore
Investment: ₹2,006 crore
Financial Health Insights: Strong balance sheet with CRISIL rating upgrades to AA/Stable for SEML and AA−/Stable for SMAL, prudent capital deployment, and strong liquidity profile.
Capex & Cash Flow Health
Capital Expenditure: Planned ₹10,000+ crore growth capex focused on energy and mining assets
Cash from Operating Activity (H1 FY27): ₹980 crore
Cash from Investing Activity (H1 FY27): -₹662 crore
Cash from Financing Activity (H1 FY27): -₹357 crore
Investment Rationale: Focus on capacity expansion in energy and mining segments, doubling energy capacity and quadrupling mining capacity by FY30.
Strategic & R&D Initiatives
Investments in Innovation: Manganese ore mining expansion, thermal power capacity doubling, renewable energy portfolio expansion to 400 MW by FY30, coal production capacity increase to 7+ MTPA.
Expected impact on growth: Manganese mine to provide raw material security and margin accretion for ferro alloy operations; energy expansion to strengthen earnings visibility.
Strategic Rationale: Backward integration across value chain, reducing dependence on external suppliers, improving cost competitiveness.
Industry Trends & Business Environment
Macro/Industry Trends: India's vision of Viksit Bharat 2047 with push towards domestic manufacturing and semiconductors; government focus on coal gasification to reduce LNG and fertilizer imports; National Electricity Plan envisages 900 GW installed capacity by FY32.
Impact on Company: SEML positioned to benefit from increasing power and industrial demand; aligned with India's focus on energy security and import substitution through integrated energy and mining business.
Management Commentary & Growth Outlook
Strategic Outlook: "Despite the planned operational shutdowns at some of our facilities, we delivered a resilient performance during H1 FY27 achieving our highest-ever half-yearly EBITDA. This reflects the inherent strength of our underlying businesses."
FY Guidance: Target to double EBITDA over medium term through capacity expansion and operational excellence; plans to double energy capacity and quadruple mining capacity by FY30.
Risks and Opportunities: Focus on timely execution, improving asset utilization, and unlocking operational synergies across integrated businesses.
ESG Updates
Health & Safety: Zero Incident Rate achieved in H1 FY27; SEML awarded Appreciation Award for Best Company in Safety category in Eastern Region.
Social Responsibility: Support to NGOs and communities in education, health, infrastructure, livelihood, and arts; support to approximately 5000 farming families for alternative income generation.
Community Development: School inaugurations, higher-education assistance, self-defence training for girls, sewing training programs, community infrastructure development.