Sarda Energy & Minerals Q1 FY27 earnings call

Sarda Energy & Minerals Limited reported a robust Q1 FY27, achieving its highest ever quarterly EBITDA of INR 762 crores and PAT of INR 478 crores. Total income for the quarter stood at INR 1,717 crores. The PAT figure represents a 9.4% year-on-year growth. Notably, the net profit included a one-time^📎 net benefit of INR 110 crores, primarily from the regulatory approval of the final project cost for the 113-megawatt Sikkim hydropower plant.

The energy business continued to be the key growth driver for the company, contributing nearly 70% of the consolidated EBITDA in Q1 FY27. This segment provides crucial stability to overall earnings. The company has successfully secured medium and long-term power supply agreements for over 380 megawatts, out of its total 710-megawatt saleable power capacity, significantly enhancing revenue visibility and earnings stability for the future.

Q1 FY27 faced several operational challenges, including planned maintenance shutdowns, unplanned outages, and seasonal factors. The 113-megawatt Sikkim hydropower project experienced a temporary shutdown from June 18 to July 5 due to a transmission tower collapse caused by heavy rainfall and landslide, but has since resumed full operations. Additionally, delayed monsoon conditions impacted generation at small hydropower plants, though July trends show improved momentum.

While iron ore pellet production supported operating performance, the consolidated revenue for the steel and ferro alloys segments declined quarter-on-quarter. This was primarily due to planned outages, including the replacement of a 30-megawatt captive power plant unit at Raipur and scheduled maintenance at Vizag. The new 30-megawatt unit is now ready for trial operations, with stable commercial operations expected to begin by mid-August, which should improve production.

Execution across major capacity expansion initiatives is progressing as planned. The regulatory approval process for expanding the thermal power capacity at SKS from 600 megawatts to 1,200 megawatts is on track. Approval processes for three small hydro projects in Chhattisgarh, totaling 74 megawatts, are also proceeding as scheduled. However, the 50-megawatt captive solar project has been delayed due to right-of-way issues, with commissioning now expected before the end of the next quarter.

Development of the Shahpur West high-grade coal mine remains on schedule, with commissioning targeted before the end of FY27. The Bartunga Hill coal mine is expected to be opened by the end of next financial year. Regulatory approvals for the Gare Palma IV/5 and Senduri coal blocks are also progressing as planned, supporting the company's long-term goal to quadruple mining capacity.

The mineral wool project has commenced production and is currently operating at approximately 60-65% of its capacity. However, the project is not yet making profits due to delays in receiving imported equipment and machineries, which have been impacted by the West Asia crisis. The company anticipates achieving revenue between INR 90 crores to INR 110 crores from this segment for FY27, with full production expected within the next 3 to 6 months.

Sarda Energy & Minerals Limited maintains a robust financial position, being net debt-free on both a stand-alone and consolidated basis. As of June 30, 2026, the company reported healthy liquidity of more than INR 2,500 crores. This strong balance sheet provides significant flexibility to fund its ongoing and planned long-term growth initiatives entirely through internal accruals, without relying on additional debt.