Shankara Buildpro Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Shankara Buildpro Limited reported strong Q3 FY26 results, driven by robust steel sales volume growth of 37% YoY and a 29% increase in overall revenue to ₹1666 crores. Profitability also improved with EBITDA margin reaching 3.30%. However, the non-steel segment experienced a 5% YoY decline due to various market and regulatory challenges, and Q3 PAT was impacted by one-time demerger and labor code costs. The company remains optimistic about achieving its FY26 steel volume target and improving non-steel performance in the coming quarters.

Highlights

  • Steel sales volume grew 37% YoY in Q3 FY26 to 2.61 lakh tonnes, driven by aggressive penetration in western geographies (Maharashtra, Gujarat, MP).

  • Overall top line (revenue) for Q3 FY26 was ₹1666 crores, reflecting a 29% YoY growth.

  • Profit After Tax (PAT) for 9M FY26 stood at ₹86.5 crores, registering a strong 77% growth over the same period last year.

  • EBITDA margin for Q3 FY26 improved to 3.30% from 2.75% YoY, and for 9M FY26 to 3.28% from 2.8% YoY.

  • ROCE for 9M FY26 stood at 37%, and working capital remains efficiently managed under 30 days.

Concerns

  • Non-steel sales declined 5% YoY in Q3 FY26 to ₹146 crores, facing headwinds from weak export markets, raw material volatility, and government policy changes.

  • PAT for Q3 FY26 fell sequentially from ₹29 crores to ₹25 crores, impacted by a ₹2.61 crore additional gratuity provision for a new labor code and ₹1.5 crore demerger costs.

  • Management noted some resistance to the significant steel price increases observed towards the end of the quarter and into January.

  • Construction activity, particularly in non-steel, was slowed by elongated monsoons and state-level regulatory interventions in Southern States like Karnataka and Telangana.

Key financials

3 periods

Headline

  • Working Capital
    30 days

Q3 FY26

  • Overall Revenue
    ₹1,666 Cr
    YoY +29%
  • EBITDA
    ₹55 Cr
  • EBITDA Margin
    3.3%
    YoY +20%
  • PAT
    ₹25 Cr
    QoQ -13.8%

9M FY26

  • Overall Revenue
    ₹4,829 Cr
    YoY +30%
  • PAT
    ₹86.5 Cr
    YoY +77%
  • ROCE
    37%

What they filed

Q1 FY27: revenue up 20.5%, net profit up 12.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,239 1,291 1,560 1,568 1,595 +29%1,666 +29%1,996 +28%1,890 +21%
EBITDA31 35 47 53 50 +61%54 +54%70 +49%61 +15%
Net profit14 18 29 32 29 +107%25 +39%42 +45%36 +13%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Sales Revenue
₹6,495 Cr Total
  • Steel (9M FY26) ₹4,384 Cr 67.5%
  • Steel (Q3 FY26) ₹1,520 Cr 23.4%
  • Non-Steel (9M FY26) ₹445 Cr 6.9%
  • Non-Steel (Q3 FY26) ₹146 Cr 2.2%

Capital allocation

high confidence
  • Capex Capex disclosed
    • Per hybrid store CAPEX (including inventory) ₹3 Cr
    So we are looking at adding maybe three to four stores in the coming financial year where we see we need a strategic fit. And when it comes to the metrics, I think on average, we have a CAPEX around Rs. 3 crores per hybrid store.
  • Debt Debt disclosed Cost 7.5%
    And what is the rate of interest which you are getting on these? ... We are getting around 7.5% to 8%.

Guidance & targets

Volume

  • Steel Volume Volume · FY26 · High confidence 1 million tonnes
    Looking ahead, we are optimistic to close the financial year on a healthy note and achieve our target of 1 million tonnes in steel volume in Shankara Buildpro Limited Standalone.

    — Dhananjay Mirlay Srinivas

  • Overall Volume Growth Volume · FY27 · High confidence 20%
    Yes, I think that would be our aspiration for sure. ... growing around 20% on an average for next year as well.

    — Management

Margin

  • EBITDA Margin Margin · FY27 · High confidence 3.5%
    I think for the next year we could look around 3.5%

    — Management 1

  • EBITDA Margin Margin · FY28 · High confidence 4%
    The aspiration would be around 4%. ... around 4% EBITDA in 2 years' time

    — Management 1

Revenue Mix

  • Non-Steel Revenue Contribution Revenue Mix · by 2030 · High confidence 20%
    I mean, you mentioned we have 20% non-steel revenue target mix by 2030, right? Yes, correct.

    — Deepak Poddar (confirmed by Management)

Revenue

  • Top Line Revenue · by 2030 · High confidence ₹10,000 crores
    Looking at a top line of around Rs. 10,000 crores.

    — Management

What to watch in Q4 FY26

Non-Steel Segment Recovery

From Q2 FY27
Current 5% YoY decline in Q3 FY26
Target Growth/improvement

Why it matters

Essential for achieving the 20% non-steel revenue mix target by 2030 and overall growth, as management expects results from Q2 next financial year.

I think things are looking better and we are looking to get back on that track from next year. We have already worked on what changes need to be done internally... And I think we will start seeing those results from the second quarter of the coming financial year.

Risks & concerns

  • Non-Steel Demand Weakness

    medium

    Tepid non-steel demand due to weak export markets, raw material price volatility, elongated monsoon, and adverse government policy changes in Southern States.

    Management acknowledged

  • Steel Price Resistance

    medium

    Significant steel price increases towards the end of Q3 and into Q4 are facing some resistance, which could impact demand.

    Management acknowledged

  • Regulatory/Policy Delays (Non-Steel)

    medium

    State-level government interventions (e.g., e-khata, electricity connections) in Karnataka and Telangana have slowed construction activity and project completions, affecting non-steel demand.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Robust Steel Growth Drivers Direct
I think these three States really triggered a substantial volume growth. So I think if we look at broadly the numbers, I think around 50% is our growth in the volume in the western region. I think that is what has really sustained our superior growth overall, while it has remained around 20% in the southern region.

Explains the significant steel volume growth (37-38%) by highlighting successful geographical expansion into western states (Maharashtra, Gujarat, MP).

Asked by Viraj

Q3 PAT Decline Explanation Direct
Here the main impact was there was a new labour code. Around Rs. 2.61 crores of additional gratuity provision has been made that we can see in the exceptional items. That has affected the bottom line, PAT. ... Yes, demerger cost around Rs. 1.5 crore has been booked for the quarter.

Clarifies that the sequential decline in Q3 PAT was due to one-time exceptional items (new labor code provision and demerger costs) rather than operational issues.

Asked by Aadarsh

Non-Steel Target vs. Current Performance Partial
I think this year has been a bit of a roadblock, I mean a bit of a speed bump. But I think things are looking better and we are looking to get back on that track from next year. We have already worked on what changes need to be done internally... And I think we will start seeing those results from the second quarter of the coming financial year.

Addresses the concern about the non-steel segment's decline against a long-term growth target, indicating management's plan for recovery from Q2 FY27.

Asked by Aadarsh

Q3 Inventory Management Amidst Price Decline Direct
See honestly, there would have been a marginal inventory loss. But the main management of inventory is how we buy effectively. So I think it is a lot of thing on the purchase part of it. And we do get certain price guarantees, etc., from our suppliers in a downward market based on your volume lifting. So I think that is how we try and hedge our inventory loss to the best we can.

Explains how the company mitigated inventory losses in Q3 despite price declines, showcasing effective purchasing and supplier relationships.

Asked by Rahul Kumar

High Tax Expense in Q3 Direct
So there is one Rs. 2.8 crores of earlier year expense was there. So, that was one-time expense which was booked in quarter 3. So that was the main impact which has happened.

Provides a clear reason for the elevated tax expense in Q3, confirming it was a one-time adjustment from a prior period.

Asked by Yog Rajani

Efficiency with 1 Million Tonne Target Evasive
I think that would be giving in to our USPs and a lot of trade secrets to go to the market. So I do not think that would be something we would really be comfortable asking in a public forum.

Management declined to elaborate on core competencies and efficiency strategies, suggesting proprietary methods that are not publicly disclosed.

Asked by Yog Rajani

Non-Steel Segment Struggles and Real Estate Cycle Direct
I think two things. I think one is post-COVID. During COVID there was a slowdown in new project launches, which has picked up afterward. And usually buildings take around 3 to 4 years to come to completion. So we should be expecting completion coming in from Q2 of FY 2027. ... Second is, last year there was an overall impact of slowdown in terms of approvals and things like that at different state levels, which has also slowed down construction activities.

Provides a comprehensive explanation for the non-steel segment's underperformance, linking it to the real estate project cycle and state-level regulatory delays.

Asked by Madhur Rathi

Store Metrics and Payback Periods Partial
I think on average, we have a CAPEX around Rs. 3 crores per hybrid store. ... Madam, can we come back to this later, please?

Management provided CAPEX per store but deferred detailed metrics like revenue per store and payback periods, indicating these might be sensitive or not readily available for public disclosure.

Asked by Palak Bhanushali

3 min read 7 chapters

Detailed narrative

Q3 & 9M FY26 Performance Overview

Shankara Buildpro Limited reported a robust Q3 FY26 with an overall top line of ₹1666 crores, marking a 29% year-on-year growth. For the nine months of FY26, the top line reached ₹4829 crores, growing 30% YoY. EBITDA for Q3 stood at ₹55 crores with a margin of 3.30%, improving from 2.75% in the prior year. Profit After Tax (PAT) for 9M FY26 was ₹86.5 crores, reflecting a strong 77% growth over the same period last year, with ROCE at 37% and working capital under 30 days.

Steel Segment Outperformance

The steel segment demonstrated strong performance, with sales volume reaching 2.61 lakh tonnes in Q3 FY26, a 37% YoY increase. Steel sales revenue for the quarter was ₹1520 crores, growing 34% YoY. For 9M FY26, steel sales volume was 7.27 lakh tonnes (up 38% YoY) and revenue was ₹4384 crores (up 34% YoY). This growth was primarily driven by aggressive penetration and market share gains in western geographies like Maharashtra, Gujarat, and Madhya Pradesh, which contributed approximately 50% of the volume growth.

Non-Steel Segment Challenges & Outlook

In contrast to steel, the non-steel segment faced headwinds, with sales declining 5% YoY to ₹146 crores in Q3 FY26. Management attributed this to several factors including weak export markets, volatility in raw material pricing, and elongated monsoons. Additionally, a post-COVID slowdown in new project launches and state-level government policy changes in Southern States like Karnataka and Telangana have delayed construction activity. The company expects the demand environment to improve, with results from internal changes anticipated from Q2 FY27.

Profitability & Margin Analysis

EBITDA margins for Q3 FY26 came in at 3.30% (₹55 crores) and for 9M FY26 at 3.28% (₹158 crores), showing an improvement over the previous year. However, Q3 PAT sequentially fell from ₹29 crores to ₹25 crores. This decline was primarily due to one-time impacts: a ₹2.61 crore additional gratuity provision related to a new labor code and a ₹1.5 crore cost booked for the demerger process.

Inventory Management & Price Volatility

Despite significant steel price fluctuations, including a downward trend for 8-9 months followed by increases in December and January, the company managed its inventory effectively. While Q2 FY26 saw an inventory loss of approximately ₹12 crores, Q3 FY26 had no significant inventory loss. This was achieved through careful planning, effective purchasing strategies, and securing price guarantees from suppliers, allowing the company to hedge against price volatility.

Strategic Growth Targets & Future Outlook

Shankara Buildpro aims to achieve 1 million tonnes in steel volume for FY26. Looking ahead, the company targets an overall volume growth of 20% for FY27. Long-term aspirations include a top line of ₹10,000 crores and a 20% non-steel revenue contribution by 2030. Profitability targets include an EBITDA margin of 3.5% for FY27, with an aspiration to reach 4% in FY28, focusing on better margin mix in both steel and non-steel products.

Capital Structure & Working Capital Efficiency

As of December, the company reported acceptances of approximately ₹450 crores and borrowings of around ₹50 crores, totaling ₹500 crores. The cost of debt on these acceptances is competitive, ranging from 7.5% to 8%. The company maintains efficient working capital management, keeping it under 30 days overall, with non-steel requiring about 48 days due to higher inventory for display, and steel at 27 days.

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