Summary
Sarda Energy & Minerals Ltd. - Q3 FY 2026 Earnings Call Summary Monday, February 09, 2026 5:00 PM
Event Participants
Executives 4 Manish Sarda, Nilay Joshi, Padam Kumar Jain, Pankaj Sarda
Analysts 6 Aman Goval, Dewang Sanghavi, Manav Gogia, Nupur Ghandhi, Pooja Rathore, Rajesh Bhandari, Rajesh Verma
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹1,360 crores | -8.5% QoQ (est); Impacted by plant shutdowns and weaker price realizations. |
| Consolidated EBITDA | ₹395 crores | +7.3% YoY; Growth driven by energy segment resilience despite maintenance shutdowns. |
| Consolidated PAT | ₹190 crores | -24% QoQ (est); Impacted by seasonal factors and maintenance; 9M PAT grew +59% YoY. |
| Hydro Power Generation | 621 million units | +28% YoY (9M basis); Driven by good monsoon and Rehar project commissioning. |
| Consolidated Net Debt | <₹500 crores | Significant reduction from ₹1,500 crores in March 2025; Net debt/EBITDA <1x. |
| IPP Avg. Realization | <₹5.00 per unit | Moderated due to seasonal off-peak pricing; Recovery expected in Q4/Q1. |
| CPP Generation | 328 million units | Sales of 12 million units; impacted by 30MW turbine replacement shutdown. |
| Capex (9M FY26) | >₹400 crores | On track for FY26 target of ₹550–₹600 crores. |
Geographic & Segment Commentary
- Energy Segment: Revenue supported by the new 24.9 MW Rehar Hydro project with a 40-year PPA at ₹7.42/unit. Thermal IPP performance was impacted by a 45-day planned maintenance shutdown of one 300 MW unit. Management has secured 200 MW medium-term and 100 MW long-term offtake agreements for the IPP, providing cash flow stability.
- Metals & Mining: Steel prices touched 5-year lows during Q3 but recovered 10-15% by late December. Ferroalloys export volumes grew 43% YoY in Q3 to 33,272 MT. The company is transitioning focus between domestic and export markets based on grade-specific realizations (70-grade for export, 60-14 for domestic).
- Mining Operations: Gare Palma IV/7 coal mine is awaiting final approval to enhance capacity from 1.68 MT to 1.8 MT. Sahapur West high-grade coal mine development is on schedule for commissioning by the end of FY27.
Company-Specific & Strategic Commentary
- Integration Strategy: Management highlighted the “Energy plus Minerals” platform where captive coal usage provides a hedge, though they maintain the flexibility to sell captive coal commercially when market prices exceed SHAKTI coal costs.
- Renewable Expansion: A 50 MW captive solar project is scheduled for commissioning in Q1 FY27. The company is actively evaluating further “green power” opportunities to future-proof the portfolio.
- Thermal Expansion: Signed an MOU with the state government for doubling SKS Power capacity; environmental clearance processes are expected to take approximately 24 months before orders are placed.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Annual Capex | ₹550–₹600 crores (FY26/27) | Excludes potential inorganic acquisitions; focused on ongoing coal and hydro projects. |
| SKS Generation | 410–420 crore units (FY27) | Expected slight improvement over the 400 crore unit target for FY26. |
| EBITDA Target | >₹2,000 crores (FY26) | Management remains confident in the trajectory for FY26 and expects FY27 to be higher. |
| Power Tariffs | >₹5.00 per unit (Q4 FY26) | Seasonal demand recovery in summer months expected to drive realizations higher. |
Risks & Constraints
| Risk | Context |
|---|---|
| Cyclicality | Steel and ferroalloy prices are subject to global volatility; Q3 saw prices hitting multi-year lows before a year-end recovery. |
| Regulatory Delays | Higher coal production (3 MT to 5.2 MT) requires fresh Forest and Environment Clearances, with a minimum 24-month lead time. |
| Litigation | The SKS Power acquisition remains under “order reserved” status at the Supreme Court, creating a legal overhang until the final judgment. |
Q&A Highlights
Pricing & Margins
- Question: What is the trend for steel prices in Q4? (Dewang Sanghavi)
- Answer: Blended price hikes of 12-15% are visible from Q3 levels. Pellets are up ~10%, while wire rods and billets have seen ~15% improvement (P.K. Jain).
Operational Shutdowns
- Question: How long was the planned shutdown in Q3? (Nupur Ghandhi)
- Answer: The 300 MW IPP unit was down for 45 days for overhauling. The 30 MW Siltara captive unit was shut on Dec 1 for turbine replacement, expected back in mid-June (Pankaj Sarda).
Coal Strategy
- Question: What is the cost benefit of captive coal vs SHAKTI coal? (Manav Gogia)
- Answer: Production costs are similar (captive may be ₹0.10 higher per GCV), but captive coal offers the strategic option to sell commercially at higher market rates while using SHAKTI coal for power (Pankaj Sarda/P.K. Jain).
SKS Expansion
- Question: When will SKS capacity doubling begin? (Rajesh Verma)
- Answer: MOU is signed. EC process will take 2 years. Ordering will commence only after clearances are received (Pankaj Sarda).
Key Takeaway
Sarda Energy & Minerals delivered a resilient Q3 FY26 despite significant planned maintenance shutdowns in its power segment and a period of 5-year low steel prices. The company transitioned into a significantly stronger financial position, reducing net debt from ₹1,500 crores to under ₹500 crores within nine months. Strategic growth is anchored by the commissioning of the Rehar Hydro project (₹7.42/unit tariff) and the upcoming 50 MW solar plant in Q1 FY27. While Q3 performance was dampened by the 45-day IPP shutdown, management anticipates a strong Q4 and FY27 driven by a 10-15% recovery in steel prices and higher seasonal power realizations. Key watch points include the Supreme Court’s final order on the SKS Power acquisition and the execution timeline for the Sahapur West coal mine by FY27.
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