Summary
Sambhv Steel Tubes Limited - Q3 FY 2026 Earnings Call Summary Monday, February 02, 2026, 04:00 PM IST
Event Participants
Executives 4 Anu Garg (CFO), Bikash Agrawal (CSO), Mayank Agrawal (AVP CEO’s Office & IR), Vikas Kumar Goyal (MD & CEO)
Analysts 6 Abhinav Shetty, Aryan Bhatia, Chandresh Malpani, Devesh Lakhotia, Hardik Gandhi, Miraj, Pushpender Jindal, Ruchita, Vikram Sharma
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Sales Volume (9M) | 4,05,082 tons | +34% YoY; Strongest ever 9-month performance. |
| Value-Added Sales (9M) | 2.6 lakh tons | +60% YoY; Primarily driven by stainless steel and higher GP volumes. |
| Total Revenue (9M) | ₹1,728 crores | +70% YoY; Driven by higher production volumes and operational efficiency. |
| Total Revenue (Q3) | ₹589 crores | +60% YoY; Reflects robust growth despite seasonal maintenance shutdowns. |
| EBITDA (9M) | ₹184 crores | +73% YoY; Healthy EBITDA per ton maintained at ~₹6,800. |
| EBITDA (Q3) | ₹51 crores | +34% YoY; Compressed QoQ (from ₹6,100 to ₹5,200/ton) due to maintenance and HR coil price volatility. |
| Net Profit (9M) | ₹88 crores | +110% YoY; Doubled due to scale and significant decline in finance costs. |
| Net Profit (Q3) | ₹24 crores | +100%+ YoY; Driven by operational leverage and debt repayment. |
| Gross Debt | ₹210 crores | Includes ₹40 crores term loan and ₹170 crores working capital loan (as of Dec 31). |
Geographic & Segment Commentary
- Stainless Steel Segment: Achieved 13,400 tons sales in Q3 with an EBITDA of ₹13,000/ton. Management is transitioning the mix from 30:70 (300 series vs 200 series) toward 50:50 to enhance realizations to ₹1.5 lakh/ton.
- Galvanized Products (GP): Capacity increased to 1,16,000 tons per annum. Segment EBITDA was impacted by a 15-day maintenance shutdown of the wider width CR coil mill in Q3.
- Carbon Steel (ERW Pipes): Maintained dominance in West, Central, and North India. The segment realized ₹5,600/ton EBITDA for in-house coils vs ₹1,500/ton for third-party procured coils.
Company-Specific & Strategic Commentary
- Greenfield Expansion (Kesda): Project execution has commenced following MOEF clearance; targeted for commissioning by Q4 FY27 with 3.5 lakh tons stainless steel capacity.
- PLI Scheme 2.0: Received approval for two applications related to stainless steel products, which will provide financial incentives for future expansions.
- Co-Branding Strategy: Executed four MOUs for stainless steel pipe manufacturing and targeting 2,500 tons monthly volume through partners to increase brand reach.
- Backward Integration: Evaluating a 25-30 MW captive power plant (₹125-150 crores capex) to eliminate 45% grid dependence and save ~₹50 crores annually.
- New Product Development: Researching entry into high-margin Stainless Steel Seamless Tubes (targeting defense and marine sectors) possibly via a technological joint venture.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA per ton | ₹7,500 (Q4 FY26) | Reversal of HR coil price drops and higher GP capacity utilization. |
| Annual EBITDA | ₹260 crores+ (FY26) | Full-year weighted average target of ₹7,000/ton. |
| Volume | 1 lakh tons (Q4 FY26) | Expected strong jump in sales volume to close the fiscal year. |
| SS Capacity | 4.7 lakh tons (FY27) | Combined capacity following Greenfield Phase 1 and Brownfield expansion. |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Volatility | Q3 margins were pressured as HR coil prices fell 6% in Nov/Dec, leading to a temporary lag in price transmission relative to high-cost inventory. |
| Working Capital Strain | Transitioning to a higher stainless steel mix is expected to increase working capital cycles by 10-15 days compared to carbon steel. |
| Import Pressure | Temporary 3-month window for non-BIS stainless steel imports (Oct-Dec) caused a 2-3% pricing impact; mitigated recently by China’s export duty tightening. |
Q&A Highlights
Margins Recovery
- Question: Why did EBITDA/ton drop from ₹6,100 to ₹5,200 in Q3? (Hardik Gandhi)
- Answer: Primarily due to high-cost inventory during an HR coil price decline, a 15-day maintenance shutdown for GP capacity expansion, and a temporary surge in stainless steel imports (Vikas Goyal).
Expansion Funding
- Question: How is the ₹940 crore Greenfield Phase 1 being funded? (Hardik Gandhi)
- Answer: ₹250 crores already incurred; balance ₹700 crores will be funded via ₹650 crores long-term debt and internal accruals (Management).
Product Strategy (DFT)
- Question: Do you plan to enter larger diameter pipes using DFT technology? (Abhinav Shetty)
- Answer: Planning a 2 lakh ton DFT facility for 7-14 inch pipes to fill an SKU gap and increase bargaining power for coil procurement (Vikas Goyal/Bikash Agrawal).
Legal Disclosure
- Question: Can you clarify the fraud allegation regarding the subsidiary land deal? (Vikram Sharma)
- Answer: A seller failed to disclose a mortgage on land; Sambhv has recovered ₹9 crores of the ₹11.5 crore advance and is pursuing the balance through legal channels (Bikash Agrawal).
Key Takeaway
Sambhv Steel Tubes delivered a strong 9M FY26 performance with revenue and PAT growing by 70% and 110% YoY, respectively, despite Q3 margin compression caused by raw material volatility and planned maintenance. The company is aggressively pivoting toward a high-margin value-added mix, evidenced by receiveing PLI 2.0 approval and doubling stainless steel CR capacity to 1,16,000 tons. Strategic investments in a 3.5 lakh ton Greenfield project at Kesda and the evaluation of seamless tubes and DFT technology signal a shift toward complete product integration and scale. Management has guided for a sharp recovery in Q4 FY26 with EBITDA targets of ₹7,500/ton, predicated on low-cost inventory benefits and increased galvanized volumes. While the expansion will increase working capital requirements, the company remains focused on achieving 4.7 lakh tons of stainless steel capacity by FY27 to substitute imports and capture growing industrial demand.
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