Gallantt Ispat Limited

Gallantt Ispat reported a consolidated revenue from operations of INR 4,418.92 crores for FY26, marking a 3.95% YoY growth, supported by a 1.7% volume increase. The full-year EBITDA stood at INR 776.04 crores, achieving a margin of 17.56% and an EBITDA per ton of INR 8,785. For Q4 FY26, revenue from operations was INR 1,204.81 crores, reflecting a 12.93% QoQ growth over Q3 FY26, with EBITDA at INR 208.92 crores and a margin of 16.99%.

The company is strategically positioned to capitalize on India's steel sector growth, driven by structural demand tailwinds from government infrastructure, construction, and automotive sectors. Gallantt's strategy is built on four pillars: volume growth through ongoing capacity expansions, cost efficiency via deepening integration, margin expansion, and disciplined capital allocation. FY26 served as a consolidation phase, establishing a strong foundation for future growth, with significant initiatives underway to make the company future-ready.

Gallantt Ispat is executing an INR 3,000 crores capex program. This includes INR 1,200 crores for steel capacity expansion to 1.3 million tons, INR 300 crores for solar power projects, and INR 1,500 crores for mine development. Historically, INR 1,200 crores of capex over the past five years were entirely funded by internal accruals. The current program will primarily be funded by internal generation, with management open to considering debt and equity to ensure efficient funding and a healthy balance sheet.

The company has secured captive iron ore blocks in Rajasthan and Uttar Pradesh, with INR 1,500 crores allocated for their development, targeting completion by FY28. These mines are expected to fundamentally transform raw material economics by providing supply security and significantly reducing procurement and logistics costs. This integration is projected to result in an EBITDA improvement of approximately INR 2,000 per ton, marking a material step-up for the business.

To further enhance margins, Gallantt is investing INR 225 crores in solar capacity, totaling 78 megawatts. This includes 18 megawatts in Gujarat, scheduled for commissioning in Q2 FY27, and 60 megawatts in Gorakhpur, expected in Q4 FY27. These solar plants will generate power for self-consumption in steel manufacturing, contributing an estimated INR 30-40 crores in yearly cost savings.

Gallantt Ispat maintains a strong financial position, being net-debt free as of March 31, 2026, with a net-debt to EBITDA ratio of zero. Borrowings are limited to working capital facilities. The company reported an INR 800 crores surplus as of March 31, 2026, with a net cash position of INR 360 crores after accounting for INR 440 crores in borrowings. This surplus is temporarily deployed in the intercorporate market at a 12% interest rate, awaiting deployment for the capex program.

Management views the Indian steel market as having structural and sustained demand drivers. The company aims to achieve 90-92% capacity utilization post-expansion. While currently focused on the Uttar Pradesh and Gujarat markets due to high infrastructural spending and strong demand, Gallantt is evaluating opportunities for further expansion and plans to present its medium-term growth plan in Q2 FY27, indicating potential for future geographical diversification.