Shankara Buildpro Limited Q2 & H1 FY27 Earnings Conference Call Summary

Management Participants

  • Mr. Dhananjay Mirlay Srinivas - Managing Director (appointed November 1, 2026)
  • Mr. C Ravi Kumar - Executive Director
  • Mr. Alex Varghese - Chief Financial Officer (CFO)
  • Moderator: Mr. Sayam Pokharna - TIL Advisors Private Limited

Key Financial Performance Q2 FY27

  • Revenue from operations: ₹2,280 crores, up 43% year-on-year
  • EBITDA: ₹77 crores, up 53% year-on-year
  • EBITDA margin: 3.39% (expanded from previous periods)
  • PAT: ₹46.2 crores, up 57% year-on-year at 2.02%
  • Steel volume: 3.03 lakh tons, up 27% year-on-year
  • Steel revenue: ₹2,100 crores, up 46% year-on-year
  • Non-steel revenue: ₹181 crores, up 17% year-on-year and 10% sequentially
  • Finance cost: 0.52% of revenue (held steady)
  • Return on Capital (ROC): 43% (up from 35% in Q1 and 36% in FY26)
  • Working capital days: 22 days

H1 FY27 Performance

  • Steel volumes: 5.53 lakh tons, up 19% year-on-year
  • Non-steel growth: 16% year-on-year for H1

Management Changes and Leadership Update

On October 30, 2026, the company lost Mr. Sukumar Srinivas, Founder and Managing Director of the Shankara Group. On November 1, 2026, the board appointed Mr. Dhananjay Mirlay Srinivas as Managing Director. Mr. Srinivas joined the Shankara group in January 2020 and has been on the board of Shankara Buildpro since its inception in October 2023.

Operational and Expansion Updates

  • Added first fulfillment center in Jaipur, Rajasthan (new state entry)
  • New store in Nanded, Maharashtra
  • Total store count: 134 stores and fulfillment centers
  • H1 FY27 added 5 new stores/fulfillment centers
  • 3 more stores in pipeline for coming quarters
  • Western region contribution increased from 5% to 20% of total revenue

Business Model and Market Position

  • Multi-vertical, multi-product marketplace with over 200,000+ SKUs across 25+ verticals
  • 75 categories and 100+ leading brands
  • Serves customers ranging from homeowners to large institutions with ticket sizes from ₹500 to ₹1.5 crores
  • Omnichannel business serving Metro, Tier 1, Tier 2, and Tier 3 markets
  • Steel product mix: Tubes (~25%), Flats (~50%), Longs/CMTs/Roofing (~25%)

Strategic Outlook and Guidance

  • FY27 volume target: 1.2 million tons (on track)
  • Steady-state EBITDA margin expectation: 3.5%
  • Margin aspiration: 4% over 2-3 years
  • Non-steel revenue target: 12-15% of total revenue in 2-3 years (currently <10%)
  • Store expansion: 8 stores in FY27, steady state of 5 stores annually
  • Average store CAPEX: ₹2.5-3 crores for 4,000-5,000 sq ft space
  • Store payback period: 4-5 years average

Working Capital and Financing

  • Dealer financing program: Approximately ₹15 crores covered in Q2
  • Working capital guidance: 30 days steady state (currently at 22 days)
  • No margin impact from dealer financing

Market Conditions and Competitive Landscape

  • Q2 typically subdued quarter for industry
  • Increased competition requiring aggressive marketing
  • Gaining market share from unorganized players
  • Government infrastructure spending driving steel demand
  • Geopolitical and economic challenges impacting ceramic industry

Regional Performance

  • Western region now contributes 20% of revenue (up from 5% few years ago)
  • Focus on strategic expansion rather than blind expansion
  • Rajasthan entry driven by availability of trained manager

Analyst Q&A Key Points

  • No significant inventory gains from steel price movements in September
  • Growth drivers: network strength, government infrastructure spending, product range expansion
  • Non-steel recovery driven by Karnataka market improvement and new territory seeding
  • 50% of sales from direct store customers
  • Retail vs non-retail split approximately 50:50
  • Mature stores achieve ~4% EBITDA margins
  • Organization structure combines centralized control with regional autonomy