Sarda Energy & Minerals Limited — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

Sarda Energy & Minerals reported a mixed Q3 FY26, with consolidated revenue at INR1,360 crores and PAT at INR190 crores, impacted by planned shutdowns and subdued market prices. Despite these challenges, EBITDA grew 7.33% YoY to INR395 crores, and 9-month PAT surged 59% to INR954 crores. The company significantly reduced net debt to below INR500 crores and made progress on key growth initiatives in both energy and mining segments, including new PPAs and project commissioning timelines.

Highlights

  • EBITDA increased to INR395 crores in Q3 FY26, up 7.33% YoY from INR368 crores in Q3 FY25, driven largely by the energy segment.

  • 9-month FY26 PAT increased by 59% to INR954 crores, reflecting robust operating performance.

  • Net debt significantly reduced to below INR500 crores as of December 31, 2025, from INR1,500 crores as of March 31, 2025, strengthening the balance sheet.

  • Hydropower generation increased by 28% YoY to 621 million units for the 9-month period, supported by above-average monsoon conditions and new project commissioning.

  • Secured a 40-year Power Purchase Agreement (PPA) for the 24.9 MW Rehar Hydro Power Project at INR7.42 per unit, providing long-term revenue visibility.

Concerns

  • Q3 FY26 consolidated revenue stood at INR1,360 crores, impacted by planned plant shutdowns and weaker price realizations.

  • Q3 FY26 consolidated PAT was INR190 crores, affected by the same operational and market factors.

  • The quarter was impacted by the annual maintenance shutdown of the IPP (45 days) and the shutdown of one captive power unit for equipment replacement.

  • Subdued metal and energy prices, with steel prices touching 5-year lows, affected realizations in Q3 FY26.

Key financials

  1. Revenue ₹1,360 Cr
  2. EBITDA ₹395 Cr +7.3%YoY
  3. PAT ₹190 Cr
  4. PAT (9 months) ₹954 Cr +59%YoY
  5. Net Debt ₹500 Cr

What they filed

Q1 FY27: revenue down 11.0%, net profit down 17.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue763 1,047 1,013 1,307 1,092 +43%918 −12%1,017 +0%1,163 −11%
EBITDA195 306 262 526 332 +70%208 −32%304 +16%442 −16%
Net profit123 189 115 386 240 +95%163 −14%160 +39%319 −17%
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.

Capital allocation

high confidence
  • Capex ₹600 Cr
    • 50 MW captive solar power project
    • 30 MW TG set replacement
    • Mine development (Sahapur West)
    We have spent more than INR400 crores already in the 9 months. And what we had given the guidance of INR500 crores to INR600 crores, we should be able to comfortably achieve somewhere in the range of INR550 crores to INR600 crores approximately. That will be the capex of INR600 crores for the FY26.
  • Debt Net ₹500 Cr
    Our balance sheet remains strong with negligible net gearing and net debt to EBITDA well below 1x. Consolidated net debt as of 31st December 2025 was below INR500 crores, significantly reduced from approximately INR1,500 crores as of 31st March 2025.
  • M&A SKS Power Acquisition · Pending regulatory

    Potential capacity doubling

    As an update on the ongoing litigation matter regarding SKS Power acquisition, the appeals filed by the unsuccessful resolution applicants have been heard by the honourable Supreme Court and the matter has been reserved for order. ... So, we have already signed an MOU with the state government. And we should get the MOU in hand, maybe in another one month. And then we'll start all the environment clearances process, etcetera.
  • Liquidity Liquidity disclosed Liquidity remains robust. On a standalone level, the company remains cash positive.
    And liquidity remains robust. On a standalone level, the company remains cash positive.

Guidance & targets

Capacity

  • Gare Palma IV/7 Coal Mine Capacity Enhancement Approval Capacity · current financial year (FY26) · High confidence 1.8 million tons (from 1.68 million tons)

    Previously 1.68 million tons → 1.8 million tons (from 1.68 million tons)

    Approval to enhance the capacity of the Gare Palma IV/7 Coal Mine from 1.68 million tons to 1.8 million tons is at the final stage and is expected shortly. We remain confident of achieving the enhanced output within the current financial year.

    — Pankaj Sarda

  • 600 MW IPP Thermal Power Project Expansion Approvals Capacity · Ongoing · Medium confidence Approvals
    We are also pursuing approvals for expansion of our existing 600 megawatt IPP thermal power project.

    — Pankaj Sarda

  • 3 Million Tonne Coal Mine Expansion EC Capacity · minimum 24 months · Medium confidence EC approval
    No, it will take minimum two years because forest clearance also is there apart from EC. ... Minimum 24.

    — Pankaj Sarda

Commissioning

  • Sahapur West Coal Mine Commissioning Commissioning · before the end of the next financial year (FY27) · High confidence Commissioning
    Development of the Sahapur West high-grade coal mine is progressing as scheduled, with commissioning targeted before the end of the next financial year.

    — Pankaj Sarda

  • 50 MW Captive Solar Power Project Commissioning Commissioning · first quarter of the next financial year (Q1 FY27) · High confidence Commissioning
    commissioning of the 50 megawatt captive solar power project is expected in the first quarter of the next financial year.

    — Pankaj Sarda

  • 30 MW TG Set Replacement Commissioning Commissioning · mid-FY27 · High confidence Commissioning
    Work is progressing on schedule regarding the 30 megawatt TG set replacement; with commissioning expected by mid-FY27.

    — Pankaj Sarda

Profitability

  • IPP Average Tariff Profitability · Q4 FY26 · Medium confidence slightly above INR5

    Previously INR5 (Q3 FY26) → slightly above INR5

    Q4 will be better than this level. So it was lower than INR5,, not INR5. Now it will be slightly above, but we expect is above INR5.

    — Padam Kumar Jain

  • EBITDA Profitability · FY27 · Low confidence better from 2026, higher than 2026
    We are in the cyclical industry so generally we don't give advance guidance, but what we foresee, it should be better from 2026, higher than 2026.

    — Padam Kumar Jain

Volume

  • SKS Power Generation Volume · next year (FY27) · Medium confidence 410-420 crores units
    Generation should be slightly higher from that level. It should be slightly higher from that level. 420 crores, 430 crores units, is that a good number to take? Maybe 410, 420 in between somewhere it should be.

    — Padam Kumar Jain

Prices

  • Steel Price Realizations Prices · Q4 FY26 · Medium confidence 12% to 15% increase

    From Q3 FY26 levels today

    current price realizations, so from there you can consider about 12% to 15% depending upon product to product.

    — Padam Kumar Jain

Capex

  • Capex Capex · FY26 · High confidence INR600 crores
    That will be the capex of INR600 crores for the FY26.

    — Padam Kumar Jain

  • Capex (organic opportunities) Capex · FY27 · Medium confidence similar expenditure to FY26
    And similar expenditure for FY27 except the inorganic opportunities. For the organic opportunities what we have already committed, we shall be spending on capex.

    — Padam Kumar Jain

Market context

  • Prices (general) Prices · FY27 · Low confidence positive
    No, 2027 prices will be positive.

    — Padam Kumar Jain

What to watch in Q4 FY26

Gare Palma IV/7 Coal Mine Capacity Enhancement Approval

within the current financial year (FY26)
Current At final stage, expected shortly
Target Approval received and enhanced output achieved

Why it matters

Crucial for increasing raw material availability and production volumes, directly impacting operational efficiency and revenue.

Approval to enhance the capacity of the Gare Palma IV/7 Coal Mine from 1.68 million tons to 1.8 million tons is at the final stage and is expected shortly. We remain confident of achieving the enhanced output within the current financial year.

Risks & concerns

  • Planned shutdowns of IPP and captive power unit

    medium

    Annual maintenance shutdown of the IPP and shutdown of one captive power unit for equipment replacement impacted Q3 production and revenue.

    Management acknowledged

  • Subdued metal and energy prices

    medium

    Q3 FY26 saw subdued metal and energy prices, with steel prices touching 5-year lows, impacting realizations.

    Management acknowledged

  • Litigation regarding SKS Power acquisition

    medium

    The appeals filed by unsuccessful resolution applicants have been heard by the Supreme Court, and the matter has been reserved for order, creating uncertainty.

    Management acknowledged

  • Delays in environmental clearances for coal mine expansion

    medium

    Fresh ECs and forest clearance for the 3 million tonne coal mine expansion are expected to take a minimum of two years, potentially delaying capacity growth.

    Analyst acknowledged

Q&A highlights

7 direct
Captive Power Plant (CPP) production and sales units for Q3 FY26 Direct
328 million units. And sales was 12 million units.

Provides specific operational data for the captive power plant, clarifying production and sales volumes for the quarter.

Asked by Manav Gogia

Average tariff for IPP in Q3 FY26 and outlook for Q4 FY26 Direct
That was somewhere in the range of INR5. ... Q4 will be better than this level. So it was lower than INR5,, not INR5. Now it will be slightly above, but we expect is above INR5.

Clarifies the power realization for the reported quarter and provides directional guidance for an expected improvement in the next quarter.

Asked by Manav Gogia

Timelines for captive coal mine expansions (3 million tonne and 5.2 million tonne) and fresh ECs Direct
No, it will take minimum two years because forest clearance also is there apart from EC. ... Minimum 24.

Sets realistic expectations for the timeline of critical raw material capacity expansion, highlighting the regulatory hurdles and extended approval process.

Asked by Manav Gogia

Update on SKS Power capacity doubling plans and associated timelines Direct
So, we have already signed an MOU with the state government. And we should get the MOU in hand, maybe in another one month. And then we'll start all the environment clearances process, etcetera. ... I think all the approvals might take another two and a half to three years. Would that be the right understanding? Correct.

Provides an update on a significant potential growth project, detailing the initial steps and confirming the expected long timelines for approvals.

Asked by Manav Gogia

Rates and tenure for new Power Purchase Agreements (PPAs) for thermal and hydro projects Direct
Two PPAs are for 5 years each, one PPA is for 25 years. The medium term is in the range of INR5.25, the long term one it is in the range of I think INR5.60 to INR5.80 somewhere we have. ... That is our hydro power project, the 25 megawatt hydro power project. Okay, so hydro gets more, is that it? Yes.

Details the terms of new power purchase agreements, providing clarity on revenue visibility and specific tariff rates for different power sources.

Asked by Rajesh Bhandari

Reasons for sequential and year-on-year downtrend in revenue, EBITDA, and PAT Direct
One is the pricing of the steel, which has gone down. Second is lower generation of hydro power because of seasonal effect and third is shutdown of the one unit of IPP for maintenance and one captive power plant unit was also shut down for replacement. That also had an effect on volume and profitability was lower in the third quarter.

Explains the specific operational and market factors that contributed to the sequential and YoY decline in Q3 financials, including commodity prices and plant shutdowns.

Asked by Aman Goval

Guidance for FY27 EBITDA, specifically if the INR2,000 crores target for FY26 is on track and what to expect for FY27 Partial
We are in the cyclical industry so generally we don't give advance guidance, but what we foresee, it should be better from 2026, higher than 2026.

Analyst attempts to elicit specific FY27 guidance, but management provides only a directional, qualitative outlook, citing the cyclical nature of the industry.

Asked by Pooja Rathore

Comparison of domestic versus export pricing and realization for ferroalloys Direct
on certain grades like the 70 grade silico manganese that we produce, we get a better realization in export and on certain grades like 60-14, the domestic market is far better compared to the export markets. And primarily the pricing remains almost the same, it's only the payment cycles which get impacted in terms of exports because in the export markets you typically have around 21 days of payment cycles.

Provides nuanced insight into the market dynamics and profitability drivers for different ferroalloy products and sales channels, including payment cycle considerations.

Asked by Pooja Rathore

3 min read 6 chapters

Detailed narrative

Q3 FY26 Financial Performance and Operational Impacts

Sarda Energy & Minerals reported consolidated revenue of INR1,360 crores for Q3 FY26, reflecting the impact of planned plant shutdowns and weaker price realizations. Despite these headwinds, EBITDA increased to INR395 crores, up 7.33% year-on-year from INR368 crores in Q3 FY25, primarily driven by the energy segment. Consolidated PAT for the quarter stood at INR190 crores. For the nine-month period ending December 2025, the company delivered a robust operating performance with PAT increasing by 59% to INR954 crores.

Energy Segment Growth and New PPAs

The company's integrated Energy plus Minerals platform demonstrated steady execution. Hydropower generation for the nine-month period increased by 28% year-on-year to 621 million units, supported by favorable monsoon conditions and the commissioning of the 24.9 megawatt Rehar Hydro Power Project. A 40-year Power Purchase Agreement (PPA) has been signed for the Rehar project with Chhattisgarh State Power Distribution Company Limited at a tariff of INR7.42 per unit, ensuring long-term revenue visibility. Additionally, the company secured 200 MW of medium-term and 100 MW of long-term power offtake for its IPP, providing cash flow stability.

Mining and Raw Material Capacity Expansion

Development of the Sahapur West high-grade coal mine is progressing on schedule, with commissioning targeted before the end of the next financial year (FY27). Approval to enhance the capacity of the Gare Palma IV/7 Coal Mine from 1.68 million tons to 1.8 million tons is in its final stage and expected shortly, with enhanced output anticipated within the current financial year. Approval processes for other coal mines (Gare Palma IV/5, Bartunga, and Sinduri) are also ongoing. The company noted that fresh environmental clearances for the 3 million tonne coal mine expansion would take a minimum of two years.

Strategic Projects and Capital Allocation

The commissioning of a 50 megawatt captive solar power project is expected in the first quarter of the next financial year (Q1 FY27). Work on the 30 megawatt TG set replacement is progressing, with commissioning anticipated by mid-FY27. The company is also pursuing approvals for the expansion of its existing 600 megawatt IPP thermal power project. Capital expenditure for FY26 is projected to be between INR550-600 crores, with over INR400 crores already spent in the first nine months, and similar expenditure planned for organic opportunities in FY27.

Balance Sheet Strength and Debt Reduction

The company maintains a strong balance sheet with negligible net gearing and net debt to EBITDA well below 1x. Consolidated net debt as of December 31, 2025, was significantly reduced to below INR500 crores from approximately INR1,500 crores as of March 31, 2025. This substantial debt reduction reflects the company's disciplined financial management and robust liquidity position, with the company remaining cash positive on a standalone level.

Industry Outlook and Market Dynamics

The broader industry environment shows positive trends, with India's crude steel production growing over 10% in calendar year 2025, supported by infrastructure spending and manufacturing activity. Steel prices, which had touched multi-year lows, recovered sharply by 10-15% towards the end of December. Power demand remained largely flat year-on-year, with IEX average prices moderating to INR3.33 per unit. Ferroalloys exports increased by 43% year-on-year in Q3 FY26 to 33,272 metric tons.

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