Vibhor Steel

Vibhor Steel Tubes Limited reported a robust Q3 FY26, with revenue reaching ₹301 crores, marking a significant 21% year-on-year increase compared to ₹247.25 crores in Q3 FY25. For the nine months ended December 31, 2025, the company's overall revenue grew by 15% year-on-year to ₹814 crores, up from ₹708 crores in the previous year. This growth is primarily attributed to the successful ramp-up and increasing potential of the Jharsuguda plant, which has started to streamline its operations and gain market presence in the Northeast region.

The company is strategically expanding its product portfolio beyond traditional pipes to include higher-margin offerings such as Highway Crash Barriers, Transmission Line Towers, Pole divisions (Octagon, High Mast, Conical), and Monopoles. Management expects these new products to contribute approximately 20% to the total revenue in FY26, with their share increasing further. These products also boast significantly better EBITDA margins: Crash Barriers at 4.5%, Transmission Line at over 5%, and Monopoles potentially reaching 10%, compared to pipe margins of 3.5-3.8%.

Vibhor Steel is actively investing in capacity expansion, particularly for its galvanizing operations, which are critical for most of its products. The galvanizing capacity at the Jharsuguda plant has already reached its maximum, prompting the installation of a second galvanizing line, expected to be operational within two months. The company is also considering a third galvanizing tank if momentum continues. Additionally, extra machines for Crash Barriers have been ordered for both Hyderabad and Jharsuguda plants, as current capacity is insufficient to meet the strong order inquiries of over 2000 tons.

The company plans a capital expenditure of approximately ₹10 crores for FY26, primarily allocated to acquiring new machinery for Crash Barriers and additional galvanizing tanks. For FY27, a capex of around ₹5 crores is anticipated. These investments are crucial for supporting the expansion of the new product lines and enhancing overall production capabilities, reflecting a vigilant approach to capital deployment based on market demand.

While Jindal continues to be a long-standing partner, contributing about 80% of the pipe revenue, Vibhor Steel is diversifying its client base for new products. Most of the new offerings, such as Metal Crash Barriers and Transmission Line Towers, are primarily taken up by government projects (e.g., state electricity boards, Sikkim) or large private companies (e.g., NTPC, mining divisions). This strategy aims to leverage India's infrastructure growth and reduce over-reliance on a single client for its expanding portfolio.

The Jharsuguda plant, which currently operates at 21% of its installed capacity (Q3 FY26), is projected to reach 30-40% utilization in the next fiscal year (FY27) and further increase to 60% in the year after (FY28). However, new divisions like Transmission Line and Pole face significant challenges in terms of certification and registration across various state departments. The company is aggressively working to get these products certified and registered to unlock their full market potential.