G M D C — Q4 FY25 earnings call

Call held 23 May 2025

Management summary

GMDC discussed its Q4 FY25 performance and future growth strategy, emphasizing lignite volume growth, coal mine development, and critical mineral projects. While facing some delays in lignite production and power plant operations, the company remains confident in its long-term Project Shikhar target of ₹14,500 crores by 2030, supported by a planned CAPEX of ₹13,000 crores. Management outlined specific timelines for new mine contributions and addressed capital allocation strategies.

Highlights

  • Targeting 10-15% lignite volume growth from existing mines in FY26, indicating operational recovery.

  • Baitarani West coal block expected to see groundbreaking in FY26 and initial production of approximately 1 million tons, marking a significant new revenue stream.

  • Project Shikhar's ambitious FOREX target of ₹14,500 crores by 2030 is maintained, demonstrating long-term confidence.

  • Planned CAPEX of ₹13,000 crores by 2030, with a steady annual spend of ₹1,500-2,000 crores, is deemed comfortable with existing reserves and credit lines.

  • New PPA for the power plant will allow recovery of ₹300-400 crores in past investments, improving future profitability.

Concerns

  • Lignite production shortfall in FY25 (8 million tons vs. 10 million ton target) due to a safety incident at Rajpardi mine and land acquisition delays at Bhavnagar.

  • ATPS power plant is running behind schedule due to critical spares from abroad, currently operating at a loss of ₹11 crores on ₹25 crores revenue.

  • The Copper Project Ambaji is a complex underground mine, the first in Western India, requiring 2-3 years for contribution (FY28) and significant CAPEX and technical work.

  • CAPEX execution faces delays, particularly for land acquisition and R&R, which can shift project timelines.

Key financials

  1. Annual Turnover ₹2,800 Cr
  2. Annual Profit ₹500 Cr

What they filed

Q1 FY27: revenue up 23.7%, net profit down 0.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue593 653 786 733 528 −11%579 −11%814 +4%907 +24%
EBITDA140 92 194 169 69 −51%101 +10%104 −46%191 +13%
Net profit128 148 226 164 466 +264%133 −10%194 −14%163 −1%
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

  • Power Division
    ₹25 Cr Revenue₹11 Cr Loss

Capital allocation

high confidence
  • Capex ₹13,000 Cr Through decent reserves (₹2,000 crores) and a line of credit from state lending authorities.
    • Total CAPEX by 2030 ₹13,000 Cr
    • Annual steady CAPEX ₹1,500 Cr
    • Land acquisition (46% of total CAPEX) ₹5,980 Cr
    • R&R (Rehabilitation & Resettlement) (15% of total CAPEX) ₹1,950 Cr
    • Plant and Machinery (30% of total CAPEX) ₹3,900 Cr
    • Critical Mineral Projects ₹3,000 Cr
    • Coal Projects ₹4,000 Cr
    • New Lignite Projects ₹3,000 Cr
    • Existing Lignite Projects ₹1,000 Cr
    This journey till 2030, we have planned for a CAPEX in the range of Rs. 13,000 crore, out of which generally it should be a steady number between Rs. 1,500 crore to Rs. 2,000 crore... We are fairly comfortable there. We have decent reserves in the range of Rs. 2,000 crore and we see them going up only. We have had conversations with state lending authorities and we have a line of credit from them, so we are fairly comfortable there. So 46% of this CAPEX of this Rs. 13,000 crore will go in land, 15% would go in R&R, 30% would go towards plant and machinery. Rs. 3,000 crore to Rs. 4,000 crore for critical mineral projects, two of them. Rs. 4,000 crore for our coal projects, Rs. 3,000 crore for our lignite projects and we would still need to spend in excess of Rs. 1,000 crore for existing lignite projects also because here also land has to be acquired and it has to be sold.
  • Debt Debt disclosed
    Current year and next year, we don't expect to take any debt. Probably towards the end of next Financial Year, we'll start taking on debt.
  • Liquidity Cash ₹2,000 Cr Company has decent reserves and a line of credit to comfortably finance CAPEX plans.
    We have decent reserves in the range of Rs. 2,000 crore and we see them going up only. We have had conversations with state lending authorities and we have a line of credit from them, so we are fairly comfortable there.

Guidance & targets

Volume

  • Lignite Volume Growth (Existing Mines) Volume · FY26 · High confidence 10-15%
    This year we are looking at a growth of 10% to 15% in the existing lignite business from our four existing mines.

    — Roopwant Singh

  • Total Lignite Production Volume · by 2035 · High confidence 15 million tons
    In a decade from now, we plan to see, we expect to see lignite production in the range of 15 million tons by GMDC from Gujarat-based lignite, so this is the journey that is planned out for lignite.

    — Roopwant Singh

  • Total Lignite Production Volume · by 2035 · High confidence 15 million tons

    Previously by the end of this decade → 15 million tons

    15 million tons by 2035.

    — Roopwant Singh

  • Baitarani West Coal Mine Initial Production Volume · FY26 · High confidence 1 million tons
    The plan is approximately around a million tons this year, and then it will be ramped up fairly quickly to 3 million and then to 5 million tons very quickly, but it all depends on ground breaking.

    — Roopwant Singh

  • Power Plant Lignite Consumption Volume · per year · High confidence Around a million tons
    Around a million.

    — Roopwant Singh

Project Milestone

  • Baitarani West Coal Mine Groundbreaking Project Milestone · FY26 · High confidence This year
    This mine, we should see groundbreaking this year.

    — Roopwant Singh

  • Copper Project Ambaji Contribution Project Milestone · FY28 · High confidence 2-3 years from now
    the results you should see in 2 to 3 years from now. I think FY '28 would be a right figure because mine development itself would take a lot of time.

    — Roopwant Singh

  • Rare Earth Commercialization Project Milestone · future · Medium confidence a few years
    Yes, it is a slightly complex project, but a few years only, not too long into the future. We shall keep you updated periodically on it.

    — Roopwant Singh

Capacity

  • Baitarani West Coal Mine Peak Capacity Capacity · by FY30 · High confidence 15 million tons per annum
    The largest of these is Baitarani West, which will in future become the largest mine for GMDC with capacity of 15 million tons per annum, it will be amongst the top 12 to 13 mines in the country.

    — Roopwant Singh

Revenue

  • Project Shikhar FOREX Target Revenue · by 2030 · High confidence ₹14,500 crores
    No, there is nothing to hide. It would be a few quarters here or there, but we hold on to our numbers.

    — Roopwant Singh

Pricing

  • Power Plant PPA Price Increase Pricing · future · High confidence 30 paisa more expensive
    No, our power will be approximately 30 paisa more expensive, but the electricity regulator has agreed to it.

    — Roopwant Singh

Capex

  • Total CAPEX Capex · by 2030 · High confidence ₹13,000 crores
    This journey till 2030, we have planned for a CAPEX in the range of Rs. 13,000 crore, out of which generally it should be a steady number between Rs. 1,500 crore to Rs. 2,000 crore

    — Roopwant Singh

  • Annual CAPEX Capex · steady rate · High confidence ₹2,000 crores
    The total journey is Rs. 13,000 crore plus, it has to be done by 2030. It would tend to get concentrated in 2 years, but you should see a steady rate of at least Rs. 2,000 crore.

    — Roopwant Singh

What to watch in Q1 FY26

Lignite volume growth from existing mines

Next quarter (Q1 FY26) and subsequent quarters
Current 8 million tons (FY25 production)
Target 10-15% growth over FY25

Why it matters

Key indicator of operational recovery and execution on near-term volume guidance for the core business.

This year we are looking at a growth of 10% to 15% in the existing lignite business from our four existing mines.

Risks & concerns

  • Lignite production shortfall due to operational issues and land acquisition

    medium

    FY25 lignite production missed 10 MT target, reaching 8 MT due to Rajpardi mine safety incident and Bhavnagar land acquisition delays.

    Management acknowledged

  • Delays in ATPS power plant restart

    medium

    Power division currently running at a loss of ₹11 crores on ₹25 crores revenue due to delays in restarting the ATPS plant, caused by critical spares from abroad.

    Management acknowledged

  • Complexity and long gestation of new critical mineral projects (Copper)

    medium

    Copper Project Ambaji is an underground mine near residential/ecologically sensitive areas, requiring 2-3 years for development and significant CAPEX.

    Management acknowledged

  • CAPEX execution delays, particularly for land acquisition

    medium

    Land acquisition and R&R (Rehabilitation & Resettlement), which constitute 50% of CAPEX, can cause delays but also quick acceleration once resolved.

    Management acknowledged

Q&A highlights

7 direct
Lignite production shortfall reasons and future volume targets Direct
We fell short of 10 million, it was an ambitious target, on account of two factors beyond our control. Our fifth and the smallest mine, Rajpardi had a safety incident and we had to close that mine subsequent to that incident, so we have lost some volume there. Second, our major ramp up was expected from our Bhavnagar project... This year we are looking at a growth of 10% to 15% in the existing lignite business from our four existing mines.

Explains the reasons for the FY25 lignite production miss and provides clear near-term volume growth guidance for existing operations.

Asked by Dixit Doshi

Coal mine (Baitarani West) timeline and volume expectations Direct
This mine, we should see groundbreaking this year... The plan is approximately around a million tons this year, and then it will be ramped up fairly quickly to 3 million and then to 5 million tons very quickly, but it all depends on ground breaking.

Provides initial production timelines and ramp-up expectations for a significant new coal project, crucial for future revenue.

Asked by Dixit Doshi

Coal mine pricing strategy Partial
The right word to use is we will be mindful of international price and what is being sold by Coal India and the neighborhood. The notified price of Coal India is fairly low, we will not be selling at that price. We will have our own price point which we have an idea and we did a customer outreach and interest outreach amongst customers, so that EOI was very well received.

Management indicates a market-driven pricing approach for coal but avoids specific numbers, highlighting competitive sensitivity and strategic positioning.

Asked by Dixit Doshi

ATPS power plant restart update and profitability Direct
ATPS, we are running behind schedule because of critical delays in certain spares which are supposed to come from abroad... Yes, it is one division which runs in the red, but hopefully after overhaul, we would look at a better future in this year.

Highlights ongoing operational challenges and financial drag from the power division, with a hopeful but unquantified outlook post-overhaul.

Asked by Dixit Doshi

Multi-metal (Copper) project timeline and complexity Direct
This is a very complicated project because this is an underground mine... In fact, this is going to be the first underground mine in Western India, so there is going to be a lot of CAPEX spend and lot of technical work and the results you should see in 2 to 3 years from now. I think FY '28 would be a right figure because mine development itself would take a lot of time.

Clarifies the long-term, capital-intensive, and complex nature of the copper project, pushing revenue contribution further out to FY28.

Asked by Nalin Shah

Project Shikhar (FOREX) target of ₹14,500 crores by 2030 Direct
No, there is nothing to hide. It would be a few quarters here or there, but we hold on to our numbers.

Reaffirms commitment to the ambitious long-term revenue target despite acknowledging minor project delays, indicating confidence in the overall strategy.

Asked by Divyesh Shah

CAPEX financing and annual spend Direct
This journey till 2030, we have planned for a CAPEX in the range of Rs. 13,000 crore, out of which generally it should be a steady number between Rs. 1,500 crore to Rs. 2,000 crore... We are fairly comfortable there. We have decent reserves in the range of Rs. 2,000 crore and we see them going up only. We have had conversations with state lending authorities and we have a line of credit from them, so we are fairly comfortable there.

Provides clarity on the scale and funding of the long-term CAPEX plan, reassuring investors about financial capacity and execution.

Asked by Divyesh Shah

Lignite production target breakdown (existing vs. new mines) Direct
So they would still continue to contribute 30%, but 70% would come from the newer mines.

Offers insight into the future composition of lignite production, highlighting the significant reliance on new mines for achieving growth targets.

Asked by Abhijit Mitra

2 min read 5 chapters

Detailed narrative

Lignite Operations and Future Growth Strategy

GMDC reported a lignite production of 8 million tons in FY25, falling short of its 10 million ton target due to a safety incident at Rajpardi mine and land acquisition delays at Bhavnagar. For FY26, the company targets a 10-15% volume growth from its four existing lignite mines. Long-term, GMDC aims to achieve 15 million tons of lignite production from Gujarat-based mines by 2035, with 70% expected from newer mines like Lakhpat, Walia, and Damlai, which are currently undergoing statutory clearances.

Coal Mine Development in Odisha

Significant progress has been made on the Baitarani West coal block in Odisha, which is projected to become GMDC's largest mine with a capacity of 15 million tons per annum. Groundbreaking is expected in FY26, with initial production of approximately 1 million tons in the same year, rapidly ramping up to 3 million and then 5 million tons. The company will be mindful of international and Coal India pricing, aiming for its own market-driven price point rather than the lower notified prices of Coal India.

Critical Mineral Projects (Copper & Rare Earth)

The multi-metal project at Ambaji has been renamed Copper Project Ambaji and is a complex underground mine, the first of its kind in Western India. It requires substantial CAPEX and technical work, with contributions expected by FY28. For rare earth elements, steady work is ongoing following an LOI, with commercialization anticipated in a few years. Bauxite operations are also planned for scaling up, with existing mines in Saurashtra and Kutch now contributing positively to revenues.

Power Division Challenges and New PPA

The ATPS power plant is currently running behind schedule due to critical delays in receiving spares from abroad, resulting in a Q4 FY25 loss of ₹11 crores on ₹25 crores revenue. Management expects a better future for the division after an overhaul this year. A new Power Purchase Agreement (PPA) has been signed, which will make power approximately 30 paisa more expensive but allows GMDC to recover past investments, including ₹300-400 crores spent on plant upgrades.

Project Shikhar and Long-Term Capital Allocation

GMDC reaffirmed its ambitious Project Shikhar target of achieving ₹14,500 crores in FOREX by 2030, acknowledging minor quarter-level shifts but maintaining the overall goal. The total CAPEX for this journey is projected at ₹13,000 crores by 2030, with a steady annual spend of ₹1,500-2,000 crores. This CAPEX is allocated with 46% for land, 15% for R&R, and 30% for plant and machinery, and will be funded through existing reserves (₹2,000 crores) and a line of credit, with no new debt expected in FY26.

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