Summary
Godawari Power & Ispat Limited - Q3 FY26 Earnings Call Summary Monday, February 09, 2026 4:00 PM
Event Participants
Executives 3 Abhishek Agrawal (Executive Director), Dinesh Gandhi (Executive Director), Sanjay Bothra (CFO)
Analysts 8 Abhi Shah, Aryan Bhatia, Devesh Shah, Manav, Sahil Sanghvi, Sahil, Shikhar Mundra, Siddharth, Siddharth Gadekar, Vikas Singh
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (9M) | Slight Decline | Marginal YoY dip due to softer realizations across most product categories. |
| EBITDA Margin (Q3) | 20% | +300 bps YoY from 17% in Q3 FY25 despite lower volumes and realizations. |
| PAT Margin (Q3) | 13% | Stable QoQ; reflects strong operational efficiency and margin resilience. |
| Iron Ore Mining Vol (Q3) | — | +46% YoY growth driven by enhanced operational momentum. |
| Value-Added Steel Sales | — | +15% YoY growth; offset the temporary decline in pellet sales. |
| Iron Ore Mining (9M) | — | +27% YoY growth; Ari Dongri mine performance remains strong. |
| Pellet Production (9M) | — | +10% YoY growth; 17% increase in sales volume during the period. |
| Cash Reserves | ~₹1,000 crores | Strong liquidity maintained to fund upcoming heavy capex cycle. |
| Net Zero Target | FY 2050 | Long-term ESG commitment with current CARE Edge rating of 76.6. |
Geographic & Segment Commentary
- Mining: Received Environmental Clearance (EC) to more than double Ari Dongri mining capacity from 2.35 MT to 6 MT. Commercial ramp-up to 5 MT is expected in FY27, reaching the full 6 MT run rate by October 2026.
- Pellets: Commissioned an additional 2 MT pellet plant in December 2025, taking total capacity to 4.7 MT. Management expects >90% utilization in FY27, targeting production of 4.2 MT+ with an 80:20 split between high-grade and low-grade pellets.
- Power & Energy: Expanding captive solar capacity from 165 MW to 540 MW and installing a 45 MWh Battery Energy Storage System (BESS) at the mines. These initiatives aim to reduce grid power costs from ₹11/unit to ~₹3/unit.
Company-Specific & Strategic Commentary
- Battery Energy Storage System (BESS): Launching a 20 GWh manufacturing facility with a ₹1,025 crore capex. First phase operations target April 2027 with 7-8% margins using advanced 628Ah cell technology.
- Cold Rolled Mill (CRM) Complex: 0.7 MT CRM complex on track for March 2027 commissioning. Land acquisition is complete and bank funding is secured; project targets 8-10% EBITDA margins.
- Asset Monetization: Board approved divestment of 37.85% stake in Ardent Steel for ~₹91 crores. Transaction expected to close by March 2026 to simplify group structure.
- Integrated Steel Plant: Evaluating a 1-million-ton blast furnace steel plant project with an estimated ₹5,000 crore capex. Final “go/no-go” decision expected by the annual board meeting in April/May 2026.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Total Capex | ~₹2,000 crores (FY27) | Covers CRM, solar expansion, and BESS; excludes potential steel plant capex. |
| Group Revenue | ₹12,000 - ₹15,000 cr (FY28) | Driven by full mining ramp-up, CRM commissioning, and BESS contribution. |
| Mining Capacity | 5 MT (FY27) / 6 MT (FY28) | Ramp-up contingent on receiving Consent to Operate (CTO) in Feb 2026. |
| Long-term Revenue | ~₹25,000 crores (FY30) | Management’s vision for the expanded integrated complex and BESS vertical. |
Risks & Constraints
| Risk | Context |
|---|---|
| Market Oversupply | New pellet capacities from competitors like Lloyds and NMDC may create temporary volume pressure. Management plans to mitigate this via high-grade pellet premiums. |
| Raw Material Costs | Volatility in imported South African RB1 coal prices (currently ~₹11,000/ton). Recent INR depreciation also impacts landed costs for thermal coal used in DRI. |
| Execution Risk | Simultaneous execution of BESS, CRM, and Solar projects requires significant management bandwidth and technical adaptation to new sectors. |
Q&A Highlights
Pricing & Demand
- Question: How is Q4 shaping up versus Q3? (Manav, YES Securities)
- Answer: Q4 is seeing an upsurge; pellet prices are up 10-12% and DRI up 20%. Domestic demand is strong as customers buy ahead of the monsoon (Abhishek Agrawal).
BESS Strategy
- Question: What are the unit economics for the BESS project? (Aryan Bhatia, InVed Research)
- Answer: Revenue of ~₹80 lakh per MWh; an 8 GWh output at 50% utilization would yield ~₹6,500 crore revenue at 7-8% margins (Abhishek Agrawal).
Mining Costs
- Question: How will mining costs move with the capacity ramp-up? (Siddharth Gadekar, Equirus)
- Answer: Deeper mining (150m vs 100m) will increase raw costs, but volume leverage and solar power integration will keep long-term costs stable at ~₹3,000/ton (Abhishek Agrawal).
Steel Plant Decision
- Question: When will the decision on the ₹5,000 crore steel plant be made? (Vinit Thakur)
- Answer: We were waiting for mining EC. The final decision to proceed or drop the 1 MT steel plant will be taken by the April/May 2026 Board meeting (Abhishek Agrawal).
Key Takeaway
Godawari Power & Ispat Limited delivered a resilient Q3 FY26, characterized by a 46% surge in iron ore mining despite a temporary drop in pellet sales due to a plant accident. The quarter was highlighted by the receipt of Environmental Clearance to expand mining capacity from 2.35 MT to 6 MT, a critical milestone for raw material security. Strategically, the company is diversifying into high-value segments, including an 800-crore CRM complex and a ₹1,025-crore BESS manufacturing venture, while expanding captive solar capacity to 540 MW to drive down costs. Management expects total group revenue to scale to ₹12,000-15,000 crores by FY28 as these projects commission. While market oversupply and coal price volatility remain watch points, the company’s transition to an integrated high-grade producer with a fortified balance sheet positions it for significant scale. Forward growth remains contingent on the upcoming “go/no-go” decision for the ₹5,000 crore integrated steel plant.
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