Shankara Buildpro Limited conducted its Q4 & FY26 Earnings Conference Call on May 21, 2026, with management including Mr. Sukumar Srinivas (Managing Director), Mr. Dhananjay Mirlay Srinivas (Executive Director), and Mr. Alex Varghese (Chief Financial Officer).

Financial Performance FY26

  • Revenue for FY26 stood at ₹6,826 crore, representing 30% year-on-year growth
  • Q4 FY26 revenue was ₹1,996 crore, up 28% YoY and 20% sequentially
  • Steel business revenue reached ₹6,220 crore (33% YoY growth) with volumes of 10.16 lakh tonnes (32% YoY growth)
  • Non-steel business revenue was ₹606 crore for FY26 (2% YoY growth) and ₹161 crore for Q4 FY26
  • EBITDA for FY26 was ₹228 crore (51% growth) with margin expansion of 47 bps to 3.35% from 2.87% in FY25
  • Q4 FY26 EBITDA margin was 3.51% compared to 3.05% in Q4 FY25 and 3.30% in Q3 FY26
  • PAT for FY26 was ₹128 crore (64% YoY growth)
  • Q4 FY26 PAT stood at ₹42 crore (42% YoY growth and 66% sequential growth)
  • FY26 PAT includes one-time provisioning of ₹2.61 crore related to labor code amendments
  • ROCE for FY26 was 36%
  • Working capital cycle improved to 25 days
  • Finance cost remained at 0.63% of revenue in Q4 FY26

Operational Highlights

  • Achieved milestone of surpassing 1 million tonne target with 10.16 lakh tonnes steel volume in FY26
  • Q4 steel volume delivered 2.89 lakh tonnes (19% YoY and 11% sequential growth)
  • Growth driven by core categories: steel pipes, flats, and roofing
  • E-commerce division revenue reached ₹22 crore in FY26 (322% YoY growth)
  • Same store sales growth of 23% in FY26

Medium to Long-Term Roadmap

  • Targeting 1.2 million tonnes total steel volume for FY27
  • Targeting 1.4 million tonnes steel volume for FY28
  • Plan to achieve 2 million tonnes by FY31
  • Steel tubes and pipes target: grow from 6.9 lakh tonnes in FY26 to 1 million tonnes in next three years
  • Non-steel business target: ₹750 crore in FY27 (25% increase) and ₹925 crore in FY28
  • E-commerce division targets: ₹35 crore in FY27 and ₹50 crore in FY28
  • Plan to add 7-10 new fulfillment centers/stores in FY27
  • Subsequent years: 4-5 new stores and fulfillment centers annually
  • Aspire to achieve EBITDA margins around 4% (from 3.35% in FY26)

Business Environment Context

  • Steel industry navigated sharp price volatility throughout the year
  • Hot-rolled coil prices dropped in Q2 and Q3 before rising sharply in Q4
  • Implementation of safeguard duties on steel imports helped domestic prices settle at firmer levels
  • Underlying demand supported by infrastructure spending across metros, highways, ports, and airports
  • Structural shift towards structural steel in modern construction
  • Non-steel landscape challenged by ceramic tile industry disruption due to natural gas price rise
  • Morbi cluster production cuts forced manufacturers to take price hikes
  • Plastic pipe industry estimated to have seen volume de-growth in FY26 driven by PVC resin price volatility
  • Jal Jeevan spending moderated with actual disbursement at roughly one-third of announced budgets

Q4 Specific Items

  • Inventory gain in Q4 was approximately ₹15 crores
  • Exceptional expenses in Q4 included: demerger cost (₹2.5 crores), additional rental expense (₹2.5 crores), bad debt provisioning (₹11 crores)
  • These costs were offset by inventory gains

Business Model Strengths

  • Wide customer spectrum with ticket sizes ranging from ₹500 to ₹1.5 crores
  • Omnichannel business serving homeowners, influencers, contractors, dealers, mid-size builders, and large institutions
  • Multi-vertical, multi-product, multi-brand marketplace with over 2 lakh+ SKUs across 25 verticals covering 75 categories
  • Working with 100+ leading brands
  • Strong presence across metro, Tier-1, Tier-2, and Tier-3 markets
  • Coverage across urban, semi-urban, and rural India

Store Network Details

  • Current operation of 96 stores
  • 16 stores are from Shankara Building Products Limited
  • Rental expense expected to be around ₹9-10 crores in FY27
  • CAPEX for new fulfillment centers: ₹15-20 crores

Margin Breakdown

  • Non-steel EBITDA margin: approximately 6.5%
  • Steel EBITDA margin: approximately 3%

Geographic Expansion

  • Currently focusing within existing geographies only
  • No immediate plans to move out of existing geographies

Customer Concentration

  • Business widely distributed with top customers contributing around 1% of total top line
  • Retail segment represents 50-54% of steel business
  • Customer segments include: retail counters, dealer segment, OE industrial segment