Sarda Energy & Minerals Q4 FY25 earnings call

The acquisition of SKS Power Generation has transformed Sarda's financial profile, with the IPP achieving a PLF of 80.42% in Q4 FY25, up from 56% in the previous year. Management noted that the plant reached a 96% PLF in April 2025, ranking 6th nationally. The company is already planning a 600 MW expansion at the site, with environmental clearances expected to be secured within the next 12-18 months.

Management explicitly stated that growth will now be focused on the energy and minerals verticals rather than metals. The energy segment already contributed 50% of EBIT in FY25. This pivot is supported by the upcoming commissioning of the 25 MW Rehar Hydropower project and a 50 MW captive solar plant, both expected to contribute in FY26.

Sarda is aggressively expanding its fuel security and commercial mining interests. Final approval to increase Gare Palma IV/7 capacity to 1.8 million tons is imminent. Furthermore, the Shahpur West Coal Mine received opening permission in March 2025, with production slated to begin by the end of FY26, which will further insulate the company from volatile external coal prices.

The 13% dip in steel volumes was attributed to a 30-45 day planned shutdown for plant modifications aimed at long-term efficiency. While ferroalloy prices are expected to see a 5% depression due to global trade disruptions and tariff issues, management believes their low-cost power position (bottom 25% of the industry) provides a significant competitive cushion against margin compression.

Despite the capital-intensive nature of the SKS acquisition, Sarda maintains a strong liquidity position with over ₹1,250 crore in cash and liquid investments against a net debt of less than ₹1,600 crore. Long-term loan repayments for the next year are manageable at ₹235 crore, providing ample headroom for the planned solar and mining capex.