Detailed narrative
Coal Trading Exit Improves Revenue Quality and Margins
Revenue from operations grew 13.35% YoY to ₹128.62 crores, but revenue from steam rose 46.07% to ₹123.37 crores from ₹84.46 crores as the low-margin coal trading business was shut down. EBITDA rose 60.08% to ₹30.93 crores, and EBITDA margin widened 702 bps to 24.05% from 17.03%. Clean EBITDA, adjusted for operating lease expenses, rose 65.43% to ₹29.22 crores. PBT rose 81.25% to ₹21.90 crores, and PAT rose 80.25% to ₹18.34 crores, with PAT margin up 529 bps to 14.26%. Management said that 'coal trading was hardly any margin', so margins 'can be maintained and can be even better going forward⏳'.
Record Steam Volumes as Chemical and Pharma Demand Recovers
Steam sales reached a quarterly record of 305,816 tons, up 16.7% YoY and 11.52% QoQ. Utilization rose to 41.40% from 36.06% in Q1 FY26 and 38.32% in Q4 FY26, meaning the company sold 41% of its total sales potential against 36% a year ago. Management credited the recovery in chemical and pharma customers after the Europe and US tariff agreements. It contrasted this with weak steam consumption across FY24-FY26, when volume growth ran at about 10-12%. Guidance is 5-10% growth at existing sites, and management said 20-25% company-level growth is achievable 'very comfortably' as new capacity comes on. To reduce dependence on one sector, the company has added tyre customers and signed a food processing customer in Haldia.
EBITDA per Ton Passes ₹1,000; the Monsoon Quarter Is the Test
EBITDA per ton rose 37.17% to ₹1,011 from ₹737. Management attributed this to higher volumes, more use of the waste-to-energy boilers at Vapi, and operating leverage. Structural changes support it: coal purchases moved from credit to cash after May 2026, which lowers fuel cost, and solar power has been installed. The CFO said ₹1,000 per ton can be held 'for next few quarters', but Q2 is an exception every year because wet fuel and flooding come with the monsoon. Own-generated steam was 73.7% of Q1 revenue and traded steam 22.2%. Management refused to give separate margins for the two.
Capacity Roadmap: 345 TPH to 705 TPH by Q1 FY29
Four projects (Jhagadia, Vapi, Nandesari, AMC Pirana) are nearly built. They need about ₹60 crores more and should go live in FY27, and they were funded earlier through debt and NCDs. The IPO-funded plants at Dahej GIDC, Ankleshwar and Panoli are due in Q1 FY29, and a 60 TPH plant at Tarapur in Q4 FY28, together needing about ₹170 crores over 15-18 months. About 70% of the existing 345 TPH capacity is contracted. Management targets 60-65% optimum utilization and expects new boilers to run at about 50% in their first months. Contracts run 1 to 10 years, include non-exit clauses, and use a fixed-plus-variable structure with coal costs passed through mostly monthly.
Una Bulk Drug Park: Asset-Light Expansion Beyond Gujarat
Steamhouse won the EPC mandate for a 300 TPH community boiler at the Una Bulk Drug Park in Himachal Pradesh. The project is worth about ₹311 crores including GST, includes long-term O&M, and is funded by Himachal Pradesh Bulk Drug Park Infrastructure Limited. A 9% revenue share goes to the authority and is recovered from steam consumers. Management expects about 8-10% margins with no capex of its own, but terms will only be fixed once the agreement is signed. The opportunity comes from the central government's Bulk Drug Park and PM MITRA schemes (Una has central sponsorship of about ₹1,000 crores) and the CPCB's March 2024 guideline pushing SMEs onto common boilers. The Gujarat Bulk Drug Park tender is open now, and the Ministry of Textiles is also in discussions.
Balance Sheet: Debt Rises Ahead of IPO-Funded Repayment
Gross debt rose to ₹359.48 crores from ₹281.62 crores at the end of FY26, mainly from general corporate borrowings meant to be repaid from IPO proceeds. Management said part of the IPO money has already gone to reducing debt and expects finance costs to ease during FY27. Net debt and cost of debt were not disclosed. FY26 revenue grew 24.4% to ₹491.51 crores, EBITDA grew 20.45% to ₹83.49 crores (16.99% margin), and PAT was ₹38.64 crores, with ROE of 22.36% and ROCE of 16.06%. Cash conversion is strong: billing is fortnightly, collections arrive within 7-15 days, CFO/EBITDA was about 1.2x, and the working capital cycle is guided at 35-40 days.
Industrial Gases and Technology as a Second Growth Engine
A 350 Nm³/hr PSA nitrogen plant is running at Ankleshwar as a pilot. Management is working on cryogenic ASUs to supply oxygen, nitrogen, LIN/LOX, CO2 and instrument air through pipelines instead of tankers. It is talking to gas companies about either building plants itself or using a build-own-operate model. The existing pipe racks were designed to carry 4-6 pipelines, and management estimates new gas pipelines would cost at most 10-20% of the infrastructure already in place. On boiler technology, the company works with leading domestic boiler makers that license German and Japanese waste-to-energy technology. It uses industrial waste as fuel and is in early talks with global organizations about producing steam with atomic energy.
Sticky Customers, Related-Party Links, and Where the Model Fits
Steamhouse serves 21 customers through more than 60 km of overhead pipeline across seven industrial areas, delivering up to 7.5-8 km with about 1 bar pressure drop, a 4-5 degree temperature drop and 3-7% condensation loss. Repeat customers made up 90.72% of FY26 revenue and 99.38% of Q1 FY27 revenue, helped by community-boiler thermal efficiency of 80-83% against 50-65% for captive boilers. Customers save 25-35% when they switch from furnace oil, LDO or natural gas or have intermittent demand, but large coal-fired users gain little ('a little cheaper or at par'). Coal sales to the promoter-linked Sanjoo Group have stopped, but steam bought from Sanjoo Dyeing & Printing Mills for the Sachin network will continue for at least the next few quarters. Trading agreements are also signed in Dahej SEZ and Haldia.
