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Godawari Power And Ispat limited — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

Godawari Power reported a steady Q3 and 9M FY26 performance with resilient margins despite softer realizations and temporary pellet sales decline due to an accident. The company is aggressively expanding its mining, pellet, and captive power capacities, including a significant pivot into Battery Energy Storage Systems (BESS) manufacturing. Management provided clear capex plans for FY27 and long-term revenue targets, emphasizing backward integration and cost optimization through green energy.

Highlights

9M FY26 EBITDA margin at 22% and PAT margin at 14%.
Q3 FY26 EBITDA margin expanded to 20% from 17% in Q3 FY25.
Iron ore mining capacity to increase from 2.35 million tons to 6 million tons by FY28.
Total pellet manufacturing capacity increased to 4.7 million tons (from 2.7 million tons).
Captive solar capacity expanding over 3x from 165 MW to 540 MW by March '27.
New BESS manufacturing facility with 20 GW capacity targeted for Q4 FY27 with INR1,025 crores capex.
FY27 capex estimated at INR2,000 crores (+/- INR200 crores).
Total turnover projected to reach ~INR25,000 crores by 2030.

Key financials

2 periods

Q3 FY26

EBITDA Margin
20%
PAT Margin
13%
Iron Ore Mining Production Growth
46%
YoY +46%
Value-Added Steel Products Sales Growth
15%
YoY +15%

9M

FY26 EBITDA Margin
22%
FY26 PAT Margin
14%
FY26 Iron Ore Mining Production Growth
27%
YoY +27%
FY26 Pellet Production Growth
10%
YoY +10%
FY26 Value-Added Product Production Growth
4%
YoY +4%
FY26 Pellet Sales Growth
17%
YoY +17%
FY26 Value-Added Product Sales Growth
-3%
YoY -3%

What they filed

Q1 FY27: revenue up 32.3%, net profit up 2.8% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	1,268	1,298	1,468	1,323	1,308 +3%	1,139 −12%	1,610 +10%	1,750 +32%
Expenses	1,021	1,076	1,150	999	1,048	922	1,171	1,417
EBITDA	247	221	318	324	260 +5%	218 −1%	439 +38%	334 +3%
Margin	19%	17%	22%	24%	20%	19%	27%	19%
Other income	24	20	32	26	23	27	18	38
Interest	14	13	15	15	11	13	19	20
Depreciation	39	37	40	44	41	45	48	50
Profit before tax	218	192	295	291	231 +6%	188 −2%	390 +32%	302 +4%
Tax rate	27%	24%	25%	26%	30%	24%	28%	26%
Net profit	159	145	222	216	162 +2%	143 −1%	280 +26%	222 +3%
EPS	2.38	2.16	3.31	3.23	2.41	2.14	4.17	3.29

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.

Guidance & targets

Capacity

Iron Ore Mining Capacity (Ari Dongri) Capacity · FY28 (April '27 onwards) · High confidence 6 million tons

Previously 2.35 million tons → 6 million tons

For next year, from 2.35 million, we're looking at a capacity of 5 million and then the next year, which is FY so April '27 onwards, we're looking capacity of 6 million tons.

— Abhishek Agrawal
Captive Solar Capacity Capacity · March '26 to March '27 (phased) · High confidence 540 MW

Previously 165 MW → 540 MW

expanding its solar -- captive solar capacity by over 3x from 165 megawatt current to 540 megawatt... beginning from March '26 to March '27.

— Dinesh Gandhi

Volume

Iron Ore Mining Production Run Rate Volume · By October/November '26 · High confidence 6 million tons

by October, November of FY sorry, October '26, we should be able to start producing at a run rate of 6 million tons.

— Abhishek Agrawal
Pellet Production Volume Volume · From next year onwards (FY27) · High confidence >4 million tons (4.2 million tons)

we should be able to produce more than 4 million, 4.2 million tons from next year onwards.

— Abhishek Agrawal
Boria Tibbu Mine Beneficiation Output Concentrate Volume · High confidence ~1.5 million tons (40% recovery)

the output concentrate will be close to about 1.5 million tons at 40% recovery.

— Abhishek Agrawal

Project Completion

5.4 million ton Crushing and Beneficiation Plant Project Completion · End of Q2 FY27 · High confidence —

we expect to complete the work for beneficiation plant by end of Q2 FY '27.

— Dinesh Gandhi
0.7 million tons CRM Complex Project Completion · March '27 · High confidence —

Commissioning targeted for March '27.

— Dinesh Gandhi
BESS Manufacturing Project Project Completion · Q4 FY27 · High confidence —

commissioning of BESS project is targeted for Q4 FY '27.

— Dinesh Gandhi
Boria Tibbu Mine Expansion (plant up and running) Project Completion · FY30 (3 years from now) · High confidence —

So we see that plant up and running in say FY '30, which is 3 years from now on, bare minimum.

— Abhishek Agrawal

Utilization

Pellet Plant Capacity Utilization Utilization · Next financial year (FY27) · High confidence >90%

for next year next financial year, we will operate at more than 90% capacity.

— Abhishek Agrawal

Capex

BESS Manufacturing Capex Capex · 2026, '27 · High confidence INR1,025 crores

capex of INR1,025 crores during 2026, '27

— Dinesh Gandhi
Total Capex Capex · FY27 · High confidence INR2,000 crores (+/- INR200 crores)

Our FY '27 capex will be close to about INR2,000 crores plus/minus INR200 crores.

— Dinesh Gandhi
Total Capex Spend Capex · Current financial year (FY26) · Medium confidence INR600-700 crores

we would have spent close to about INR600 crores to INR700 crores in the current financial year.

— Dinesh Gandhi
Steel Plant Capex Capex · Medium confidence INR5,000 crores

Capacity will be 1 million, and the capex we envisage should be somewhere about INR5,000 crores.

— Abhishek Agrawal

Disinvestment

Disinvestment of 37.85% stake in Ardent Steel Disinvestment · March '26 · High confidence —

This transaction is expected to be completed by March '26.

— Dinesh Gandhi

ESG

Net Zero Carbon Emission ESG · By 2050 · High confidence —

achieving net zero carbon emission by 2050.

— Dinesh Gandhi

Revenue

Revenue from Steel Complex Revenue · FY28 (once mining/pellet at full capacity) · High confidence INR6,500-7,000 crores

we're looking at a revenue of close to about INR6,500 crores, INR7,000 crores from the steel complex.

— Abhishek Agrawal
Revenue from BESS Revenue · FY28 (8 gigawatts capacity) · High confidence INR5,000 crores

On the battery storage side, if you can see a capacity of 8 gigawatts, so you can consider revenue of INR5,000 crores

— Abhishek Agrawal
Revenue from CRM Revenue · FY28 (50% capacity, 3-3.5 lakh ton) · High confidence INR2,000 crores

from the CRM, again, you consider 50% capacity, which is a 3 lakh, 3.5 lakh ton, so you can consider a volume of close to about INR2,000 crores.

— Abhishek Agrawal
Total Turnover Revenue · FY28 · High confidence INR12,000-15,000 crores

anything between INR12,000 crores to INR15,000 crores will be the turnover from FY '28.

— Abhishek Agrawal
Total Turnover Revenue · 2030 · High confidence INR25,000 crores

So I'll tell you, roughly at about INR25,000 crores.

— Abhishek Agrawal

Debt

Peak Gross Debt Debt · FY27 · High confidence INR1,500 crores

peak debt at FY '27 as of the capex which have been announced till date will be in the range of net debt will be lower but on the gross side, it will be in the range of about INR1,500 crores

— Dinesh Gandhi

Cost

Employee Expenses Increase (New Labor Laws) Cost · Annually · High confidence INR7-8 crores

hardly about INR7 crore, INR8 crores on an annual basis.

— Abhishek Agrawal
Mining Cost Cost · Longer term · High confidence INR3,000

we still expect the mining cost to be at 3,000 level in the longer term, which is currently right now.

— Abhishek Agrawal

Profitability

Free Cash Flow (without steel plant) Profitability · Annually from FY28 · High confidence INR2,000-2,500 crores

from FY '28 once all our capex are done and the new production capacity comes up, there will be close to about INR2,500 crores or INR2,000 crores of free cash every year.

— Abhishek Agrawal

Margin

CRM Complex EBITDA Operating Margin Margin · Year-on basis · High confidence 8-10%

I see EBITDA -- operating margin level at about 8% to 10% on the maximum side, 8% to 10%.

— Abhishek Agrawal
BESS Operating Margin Margin · High confidence 7-8%

operating margin of about 7% to 8%.

— Abhishek Agrawal
BESS Modeling Margin Margin · High confidence ~7%

for our modeling, we have considered a margin of about 7%.

— Abhishek Agrawal

Pricing

Ferro Alloy Prices Pricing · Next few months · High confidence INR74,000-75,000

I feel the prices should be about INR74,000, INR75,000 for a few months going forward.

— Abhishek Agrawal

Product Mix

High Grade Pellet Production (Post-Expansion) Product Mix · Post-expansion · High confidence 70%

Previously 65% → 70%

the split will be, so about -- about 70% will be high grade, 30% will be low grade.

— Abhishek Agrawal
High Grade Pellet Production (Two Bigger Plants) Product Mix · High confidence 80%

The two bigger plants will keep producing -- sorry, the ratio will change to 80%. So 80% will be high grade, 20% will be low grade.

— Abhishek Agrawal

Risks & concerns

Volume pressure in iron ore/pellet market due to increased supply from competitors.
medium

Management acknowledged potential volume pressure but stated GPIL's quality and target audience would maintain performance.

Analyst downplayed
Execution delays for large capex projects (CRM, BESS, Solar).
medium

Management indicated a cautious, phased approach for BESS and solar, and provided specific completion timelines for all projects.

Management acknowledged
Increased mining costs due to deeper excavation.
low

Management stated mining costs would slightly increase but be offset by higher volume and cost savings from green energy.

Analyst acknowledged

Q&A highlights

3 direct

Capital Allocation and Future Investments Direct

after batteries, our whole and sole focus would be on the steel only and/or we will still take up those small pockets of capex because we are kind of a little bit reluctant to do a large capex on a single segment.

Reveals the company's strategic priorities for future large-scale investments beyond the current projects, indicating a potential focus on steel after BESS.

Asked by Vikas Singh

Iron Ore Supply and Market Competition Direct

So there might be some volume pressure. But because of our quality, because of our mining capacity and the beneficiation going up, the quality we make, we have a different end buyer. Our target audience is totally different. So we don't see a challenge in terms of our performance.

Addresses concerns about increased competition and supply in the iron ore market, with management asserting their competitive advantage through quality and target audience differentiation.

Asked by Vikas Singh

Steel Plant Decision and Capex Direct

In best possible -- worst possible scenario, I think by end of -- so which will be the annual Board meeting, which will happen in April and May, we will have full clarity on that. So either we are going ahead or we're not going, we'll drop it.

Provides a clear timeline for a major strategic decision regarding a potential INR5,000 crore steel plant, which will significantly impact future capex and growth trajectory.

Asked by Vinit Thakur

3 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Overview

Godawari Power reported a steady Q3 and 9M FY26, with 9M EBITDA and PAT margins remaining strong at 22% and 14% respectively. Q3 FY26 saw EBITDA margin expand to 20% from 17% in Q3 FY25, despite softer realizations and moderated sales, EBITDA, and PAT quarter-on-quarter. Iron ore mining production increased by 46% Y-o-Y in Q3, while value-added steel products sales grew by 15% Y-o-Y. Pellet sales temporarily declined in Q3 due to an accident in September '25, impacting production and sales volumes.

Significant Capacity Expansions

The company is undergoing substantial capacity expansions across its core operations. Iron ore mining capacity at Ari Dongri is set to increase from 2.35 million tons to 6 million tons by FY28, with a run rate of 6 million tons expected by October/November '26. An additional 2 million ton iron ore pellet plant was commissioned in December '25, boosting total pellet manufacturing capacity to 4.7 million tons. The 0.7 million tons CRM complex is on track for commissioning by March '27, with construction beginning in April 2026.

Green Energy and BESS Initiatives

GPIL is aggressively expanding its captive solar capacity over 3x, from 165 MW to 540 MW, with phased completion between March '26 and March '27. This is complemented by a decision to set up a 45 MWh battery energy storage system in one solar project. Furthermore, the company is venturing into BESS manufacturing with an initial 20 gigawatt capacity, targeting commissioning by Q4 FY27 with a capex of INR1,025 crores during 2026-27. This strategic pivot aims to enhance cost efficiency and achieve net-zero carbon emissions by 2050.

Capex and Financial Outlook

The company's capex for FY27 is projected to be around INR2,000 crores (+/- INR200 crores), primarily for CRM, battery storage, and additional solar capacity, excluding any potential steel plant investment. Total turnover is expected to reach INR12,000-15,000 crores by FY28, with a long-term target of approximately INR25,000 crores by 2030. Peak gross debt is estimated at INR1,500 crores by FY27, with management confident in meeting capital allocation requirements through strong cash reserves.

Market Dynamics and Cost Optimization

Domestic steel demand is strong, with Q4 and Q1 now considered the best quarters for steel, driving pellet, DRI, and finished product prices up by 10-20%. Management expects margins to slightly improve post-expansion due to enhanced quality and higher premiums, offsetting potential volume pressure from increased market supply. Significant cost savings are anticipated from captive power projects, with grid tariffs of INR11 (mining) and INR7 (plant) being replaced by power at INR3, reducing the average cost of generation below INR3.

Strategic Decisions and Future Growth

A decision on a potential 1 million ton blast furnace steel plant, with an estimated capex of INR5,000 crores, is expected by the annual Board meeting in April/May. The company also plans to expand its Boria Tibbu mine by FY30 to secure raw material for its pellet plant, aiming for 4 million tons of beneficiation and 1.5 million tons of concentrate output. Disinvestment of a 37.85% stake in Ardent Steel for approximately INR91 crores is expected by March '26, streamlining the group structure.

This is an AI-generated summary of a publicly available earnings call transcript.

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