SAMBHV

Sambhv Steel Tubes Limited delivered a landmark FY26, with total sales volume growing 37% to 396,000 tons and revenue increasing 60% to INR 2,413 crores. EBITDA surged 79% to INR 276 crores, resulting in an EBITDA margin of over 11%, while PAT more than doubled to INR 143 crores, with PAT margin improving from 3.8% to 6%. Q4 FY26 marked the highest ever quarterly performance, with revenue of INR 685 crores (up 38%), EBITDA of INR 92 crores (up 91%), and PAT of INR 56 crores.

The company is making steady progress on its expansion plans, including the greenfield project at Kesda and Kuthrel-2, with Phase 1 of 360,000 TPA stainless steel capacity on track for commissioning in Q4 FY27. Brownfield expansion includes completed debottlenecking for stainless steel CR coils, increasing capacity from 58,000 TPA to 116,000 TPA, with consent to operate expected this week. Additionally, ERW pipes and tubes capacity is being expanded by 150,000 TPA via Direct Forming Technology (DFT) with an estimated capex of INR 50 crores, aiming for a total ERW capacity of 0.5 million TPA.

Sambhv's product mix continues to evolve towards high-margin, high-value-added offerings. The company aims to achieve 2 million tons of finished steel capacity by 2030, comprising 1 million tons of MS pipes and tubes, 0.3 million tons of coated products, and 0.7 million tons of stainless steel coil. This strategy is expected to secure a 10-12% market share in both MS coil & pipe and stainless steel flat products & coil segments by 2030.

A proposed 30 MW captive power plant at Sarora, with an estimated capex of INR 150 crores, is expected to make the Sarora unit 100% self-sufficient in power, improving overall operating efficiencies and saving INR 60-70 crores annually. The company has also switched its energy requirement from LPG to LNG in January 2026, mitigating war-related energy cost volatility and ensuring 24x7 plant operations.

The company maintains a prudent approach to debt, targeting long-term debt not exceeding 1.5 times net worth or 1.5 times forward EBITDA. The peak long-term debt for the current capex plans is projected at INR 800 crores, with an additional INR 200-300 crores for working capital. The INR 200 crores additional capex announced this quarter will be funded by INR 150 crores of debt and the balance from internal accruals.

While the cash conversion cycle remained stable at 17 days in FY26, management anticipates an increase to 25-30 days once stainless steel production goes live in 2028. This expected increase is attributed to the advanced raw material cycle and longer credit periods associated with stainless steel products compared to MS pipe.