Shankara Buildpro Limited — Q4 FY26 earnings call

Call held 27 May 2026

Management summary

Shankara Buildpro Limited delivered a strong financial performance in FY26, with significant revenue and profit growth driven primarily by its steel marketplace, which surpassed the 1 million tonne volume milestone. Despite headwinds in the non-steel segment and market volatility, the company achieved margin expansion and improved working capital. Management outlined ambitious growth targets for both steel and non-steel segments, aiming for continued expansion and margin improvement in the coming years.

Highlights

  • FY26 Revenue increased by 30% YoY to INR 6,826 crore.

  • EBITDA grew by 51% to INR 228 crore, with margin expanding 47 bps to 3.35% for FY26.

  • PAT for FY26 increased by 64% YoY to INR 128 crore.

  • Steel volumes achieved a milestone of 10.16 lakh tonnes in FY26, exceeding the 1 million tonne target.

  • Working capital cycle improved to 25 days, and ROCE stood at 36%.

Concerns

  • Non-steel business faced headwinds in FY26, with only a 2% YoY revenue increase.

  • Indian ceramic tile industry disrupted by sharp rise in natural gas prices and production cuts in Morbi cluster.

  • Plastic pipe industry experienced volume de-growth in FY26 due to PVC resin price volatility.

  • Sharp price increases across building materials in Q1 FY27 are impacting demand, leading to some postponement of purchases.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹1,996 Cr
    YoY +28% QoQ +20%
  • EBITDA Margin
    3.5%
  • PAT
    ₹42 Cr
    YoY +42% QoQ +66%

FY26

  • Revenue
    ₹6,826 Cr
    YoY +30%
  • EBITDA
    ₹228 Cr
    YoY +51%
  • EBITDA Margin
    3.4%
  • PAT
    ₹128 Cr
    YoY +64%
  • ROCE
    36%
  • Working Capital Cycle
    25 days
  • Same Sales Growth
    23%

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 Revenue (FY26)
₹6,826 Cr Total
  • Steel Business ₹6,220 Cr 91.1%
  • Non-Steel Business ₹606 Cr 8.9%

Capital allocation

medium confidence
  • Capex ₹15 Cr
    • New fulfilment centers/stores (7-10 in FY27) ₹15 Cr
    We are looking at around INR 15 crores to INR 20 crores. So, CAPEX will be involved.

Guidance & targets

Volume

  • Total Steel Volume Volume · FY27 · High confidence 1.2 million tonnes
    We are targeting a 1.2 million tonnes total steel volume for FY27

    — Dhananjay Mirlay Srinivas

  • Total Steel Volume Volume · FY28 · High confidence 1.4 million tonnes
    and a 1.4 million tonnes in FY28 steel volumes.

    — Dhananjay Mirlay Srinivas

  • Total Steel Volume Volume · FY31 · High confidence 2 million tonnes
    And we plan to achieve the 2 million mark by FY31.

    — Dhananjay Mirlay Srinivas

  • Steel Tubes and Pipes Volume Volume · next three years · High confidence 1 million tonnes

    Previously 6.9 lakh tonnes (FY26) → 1 million tonnes

    We aspire to grow from 6.9 lakh tonnes in FY26 to 1 million tonnes in the next three years in steel tubes and pipes.

    — Dhananjay Mirlay Srinivas

Revenue

  • Non-Steel Business Revenue Revenue · FY27 · High confidence INR 750 crore

    Previously INR 606 crore (FY26) → INR 750 crore

    We plan on achieving INR 750 crore in FY27, a 25% increase compared to FY26

    — Dhananjay Mirlay Srinivas

  • Non-Steel Business Revenue Revenue · FY28 · High confidence INR 925 crore
    and INR 925 crore in FY28.

    — Dhananjay Mirlay Srinivas

  • E-commerce Revenue Revenue · FY27 · High confidence INR 35 crore

    Previously INR 22 crore (FY26) → INR 35 crore

    We are optimistic on scaling up this division and are targeting revenues of INR 35 crore in FY27

    — Dhananjay Mirlay Srinivas

  • E-commerce Revenue Revenue · FY28 · High confidence INR 50 crore
    and INR 50 crore in FY28.

    — Dhananjay Mirlay Srinivas

Store Expansion

  • New Fulfilment Centers/Stores Store Expansion · FY27 · High confidence 7 to 10
    We plan to add 7 to 10 new fulfilment centers/stores in FY27.

    — Dhananjay Mirlay Srinivas

  • New Fulfilment Centers/Stores Store Expansion · each year (post FY27) · High confidence 4 to 5
    We plan to further add 4 to 5 new stores and fulfilment centers each year in high potential micro-markets.

    — Dhananjay Mirlay Srinivas

Profitability

  • EBITDA Margin Profitability · medium to long term (2-3 years) · Medium confidence around 4%

    Previously 3.35% (FY26) → around 4%

    we aspire to take our EBITDA margins to around 4%, up from 3.35% in FY26

    — Dhananjay Mirlay Srinivas

  • EBITDA Margin Profitability · FY27 · High confidence around 3.3 to 3.5%
    We are looking at in the region of the same, around 3.3 to 3.5.

    — Sukumar Srinivas

Revenue Mix

  • Non-Steel Revenue as % of Total Revenue Mix · next four to five years · High confidence 15% to 20%

    Previously under 10% → 15% to 20%

    Currently, we are at a little under 10%. Definitely, our internal target is to take it up to the 15% to 20% is our target.

    — Sukumar Srinivas

Volume Growth

  • Steel Volume Growth Volume Growth · FY27 · High confidence around 20%
    And in steel, we talked about around 20% volume growth.

    — Sukumar Srinivas

  • Steel Volume Growth Volume Growth · FY28 · Medium confidence similar to FY27
    FY28 also, a very similar kind of a guidance.

    — Sukumar Srinivas

Revenue Growth

  • Overall Revenue Growth Revenue Growth · FY27 · High confidence around 20%
    Revenue growth for the year, I think that depends on finally the... Yes, it will be in the range of around 20%.

    — Dhananjay Mirlay Srinivas

What to watch in Q1 FY27

Non-steel business recovery

next quarter / FY27
Current Faced headwinds in FY26, 2% YoY growth
Target Progress towards INR 750 crore revenue target for FY27 (25% growth)

Why it matters

Non-steel is crucial for margin improvement and diversification; recovery is key to overall growth targets.

Our non-steel business faced headwinds this past financial year. However, we are confident and optimistic to regain our growth momentum. We plan on achieving INR 750 crore in FY27, a 25% increase compared to FY26

Risks & concerns

  • Headwinds in non-steel business (tiles and plastic pipes)

    high

    The Indian ceramic tile industry was disrupted by rising natural gas prices and production cuts. The plastic pipe industry saw volume de-growth due to PVC resin price volatility. Management expects gradual recovery.

    Management acknowledged

  • Steel price volatility

    medium

    The steel industry navigated sharp price volatility, with hot-rolled coil prices dropping in Q2/Q3 and rising sharply in Q4 FY26. Management believes their inventory management and customer relations help manage this.

    Management acknowledged

  • Demand resistance due to price increases

    medium

    Sharp price increases across building materials in Q1 FY27 are impacting demand, leading to some postponement of purchases. Management expects normalization by June.

    Management acknowledged

Q&A highlights

8 direct
Impact of price increases on demand and Q1 FY27 outlook Direct
Yes, definitely the kind of sharp increases of prices across the board in whether it's tiles, whether it's partly in steel, whether it's other products is definitely impacting demand to a small extent. Probably, it would impact April, May and June as well. But I do see that some prices are correcting and I think there has been some resistance.

Management acknowledges demand slowdown in Q1 FY27 due to price hikes, but expects normalization later in the year.

Asked by Sneha Talreja

Challenges in the tile industry (Morbi cluster) and procurement issues Direct
Yes, definitely Morbi has been a challenge in the tile industry which we mentioned in our opening remarks. From I would say probably March itself, it has been badly impacted. But steadily, things are improving and we expect that probably by June itself, things will start normalizing, albeit at certain higher pricing, which is okay, which is healthy for the industry because it had gone down to very low levels prior to the last quarter.

Highlights specific supply chain disruptions in the non-steel segment and expected recovery timeline.

Asked by Sneha Talreja

Confidence in FY27 non-steel growth despite past headwinds Direct
I think number one; we have been looking at in non-steel what are our larger verticals or where we probably have not focused adequately in the last many years. So, one of the areas which we have identified, though it is competitive, we are fairly confident that we can make a fairly strong headway in the CPVC and the PVC segment itself.

Management explains the strategy for non-steel growth, focusing on specific product verticals and market penetration.

Asked by Viraj

Timeline for achieving 4% operating margin Direct
Definitely, in the two to three years time frame, so sort of a medium-term outlook. ... Yes, I think you would look at 29 would be safer, Viraj, because I don't want it to come back to me next year itself saying that, why has it not happened?

Provides a clearer timeline for a key profitability target, indicating it's a medium-term goal.

Asked by Viraj

Inventory gain/loss in Q4 FY26 and prior quarters Direct
Inventory gain in Q4 was close to around INR 15 crores, number one. Number two, we also had certain one time and in the previous quarter, there was virtually no gain at all. In fact, the previous three quarters, we would have had about, I think, what was the inventory loss in the previous three quarters. So, it was around INR 8 crores, INR 9 crores in the previous three quarters, number one.

Clarifies the impact of inventory fluctuations on profitability, showing a positive impact in Q4 FY26 after losses in prior quarters.

Asked by Utkarsh Somaya

Operating leverage in the business model Direct
I mean, if you look at the interest cost, it has more or less remained the same or marginally come down. If you look at the people, we have grown 30% this year. So, you see, much of the expenses have not grown by more than 7% to 8%. So, I think there's a fair amount of leverage that is coming. If you look at last year, our gross margins were in the region of, I mean, the PAT EBITDA was around 2.37, this year it's about 3.35. So, I think there is a fair amount of leverage here.

Management explains how operating leverage is contributing to margin expansion despite revenue growth.

Asked by Utkarsh Somaya

Competitive landscape with new entrants and larger players Direct
I think, you know, the larger the player, like you mentioned, what we see that we explained in our opening commentary that our entire approach to the market is very, let's say, very micro. We have penetration into multi-layers of the market, whether it's urban, today about 50% of our business comes from metros and the like, and the rest of it comes from the Tier-2, Tier-3, Tier-4, the smaller towns and rural areas. So, I think our decentralization, our ability to have a retail model that is very robust, I think, keeps us relatively shielded from the competition from these larger players because their model, their approach itself is very, very different.

Management explains their strategy to counter competition from larger players through a decentralized, omnichannel, and micro-market approach.

Asked by Kiran D.

Impact of quick commerce and hyperlocal delivery platforms Direct
I don't think there'll be an impact. If anything, we will look at if we can leverage hyperlocal and quick commerce for our products as well. So, I think it's more of something we can look at and something new to add in the future. So, I don't think it's a competition. It's more of a new vertical in the future.

Management views new digital platforms as potential opportunities rather than threats, indicating a proactive stance.

Asked by Ajit Sethi

3 min read 6 chapters

Detailed narrative

Strong Financial Performance in FY26

Shankara Buildpro Limited reported a robust financial performance for FY26, with revenue reaching INR 6,826 crore, marking a 30% year-on-year increase. Q4 FY26 revenue stood at INR 1,996 crore, up 28% YoY and 20% sequentially. The company's EBITDA for FY26 was INR 228 crore, a 51% jump, translating to an EBITDA margin of 3.35%, an expansion of 47 basis points from 2.87% in FY25. PAT for FY26 grew by 64% YoY to INR 128 crore, with Q4 FY26 PAT at INR 42 crore, a 42% YoY increase.

Steel Business Drives Growth and Achieves Volume Milestone

The steel marketplace was the primary driver of growth, with steel revenues reaching INR 6,220 crore in FY26, a 33% year-on-year increase. Steel volumes grew by 32% YoY, surpassing the 1 million tonne target to reach 10.16 lakh tonnes for FY26. In Q4, steel volumes were 2.89 lakh tonnes, up 19% YoY and 11% sequentially. The company aims to grow total steel volumes to 1.2 million tonnes in FY27, 1.4 million tonnes in FY28, and 2 million tonnes by FY31.

Non-Steel Business Faces Headwinds but Targets Strong Recovery

The non-steel business recorded revenues of INR 606 crore in FY26, a modest 2% increase YoY, and INR 161 crore in Q4 FY26. This segment faced headwinds from disruptions in the ceramic tile industry due to rising natural gas prices and volume de-growth in plastic pipes due to PVC resin price volatility. Despite these challenges, management is optimistic, targeting non-steel revenues of INR 750 crore in FY27 (a 25% increase) and INR 925 crore in FY28, driven by plumbing, fitting, and sanitary ware.

Strategic Expansion and Omnichannel Model

Shankara Buildpro plans to add 7 to 10 new fulfilment centers/stores in FY27, with an estimated CAPEX of INR 15-20 crores, and 4 to 5 new stores annually thereafter. The company's e-commerce division witnessed substantial growth, clocking INR 22 crore in FY26 (a 322% YoY increase), with targets of INR 35 crore in FY27 and INR 50 crore in FY28. The company emphasizes its unique omnichannel business model, catering to a wide customer spectrum across multiple verticals and territories, which helps mitigate competitive pressures.

Margin Improvement and Market Outlook

The company aspires to increase its EBITDA margins to around 4% in the medium to long term (2-3 years), up from 3.35% in FY26, driven by product mix improvement and operating leverage. For FY27, the EBITDA margin is expected to be in the range of 3.3% to 3.5%. While Q1 FY27 is expected to be slightly slow due to demand resistance from recent price increases, management anticipates recovery from June onwards, with overall FY27 revenue growth targeted at around 20%.

Inventory Management and Exceptional Items

In Q4 FY26, the company recorded an inventory gain of approximately INR 15 crores, which positively impacted profitability. This contrasts with inventory losses of around INR 8-9 crores experienced in the previous three quarters. Additionally, Q4 FY26 included exceptional costs of approximately INR 16 crores due to demerger-related expenses, additional rental expenses, and bad debt provisions of around INR 11 crores, which partially offset the inventory gains.

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