Bokaro launch offsets weak Q1 QoQ, guidance trimmed

Revenue +11.6% YoY but –20.6% QoQ; PAT +25.7% YoY but –42.9% QoQ; EBITDA margin fell to 20.3% from 21.2%

Gross margin did expand 536 bps; but EBITDA margin contracted 90 bps due to fuel cost surge

Fuel price impact on Q1 confirmed; variation mechanism in 'discussions,' not yet implemented or secured

Utilization stated; rolling mill healthy, pipes & tubes well below 65–70% target; no backward-looking demand evidence provided

Prior guidance ~75% revenue, ~45% EBITDA. New guidance 70–75% and 40–45%, respectively. Midpoints cut.

Revenue CAGR prior ~75%, now 70–75%. EBITDA CAGR 45%→40–45%. PAT CAGR 40%→35–40%. Midpoints lower.

Q1 margin 20.3% vs 21.2% prior year (–90 bps). Fuel costs blamed; recovery depends on variation mechanism and commodity prices.

₹341.6 Cr capex incurred; color-coated commissioning Q2 FY27. De-risks supply chain but near-term cash generation weak.

Guidance is for FY28, not FY27. Color-coated commissioning Q2, will ramp over 6 quarters. Won't give FY27 specific numbers.

150,000-ton line. At least 3–4 quarters to fully ramp.

Yes, standard cycle. Received in first week, 10 days, 2 weeks of quarter start.

No exports planned. Refrain from commenting on Q2; focus this call on Q1.

Steel consumption growing 10%+ (above GDP + inflation). Strong govt infra, private investment. East has catching-up opportunity. Antidumping, QCO orders, PLI, ZAM for solar creating tailwinds. 3–5 year momentum sustainable.

14 years galvanizing experience gives confidence. Will offer full product bouquet (Galvalume, Galvanized, ZAM), not just ZAM. Stickiness builds over time. No customers in ZAM segment yet.

Too early; plant still in project stage. Certifications will be pursued after commissioning and stabilization.

Fuel costs affected everyone equally; no competitive advantage. In talks with customers to incorporate fuel price variation mechanism to avoid future volatility.

India produces 160–170M tons steel; ~50% is flat. So 80–85M tons flat products market. Bokaro 0.5M tons is getting foot in door. Quality control edge over competitors key.

Will be capitalized in Q2. Hot trials ongoing now.

Focus is domestic for now. Not losing sleep over FTA. Will pursue opportunistically if presented.

FY30 aspiration is something to achieve; it is possible.

Dependent on Bokaro ramp-up and downstream market absorption. Guidance narrowed/cut; management avoiding FY27 specifics.

Post-Bokaro ramp and operating leverage materialize. Assumes fuel cost hedging and no structural margin compression.

Terminal margin below current levels; implies EBITDA-to-PAT conversion and scale benefits, but margin guidance conservative.

Color-coated capitalization Q2 FY27. Total capex ~₹341.6 Cr deployed to date. Phased commissioning FY27–FY28.

₹341.6 Cr capex deployed. Color-coated commissioning Q2, 3–4 quarters to full ramp. Plant not yet earning; ROCE/ROE remain weak. Delay or production underperformance risks capex return.

Q1 EBITDA margin compressed 90 bps due to fuel price surge from Middle East conflict. Variation mechanism in customer talks but not yet implemented. Future margin stability depends on hedging success.

Pipes & tubes utilization stuck at 40% annualized (vs 34% prior year). Management target is 65–70% by FY29. Weak utilization suggests demand/competitive headwinds or market saturation.

Sashwat Jalan (NV Alpha) flagged new capacity announcements in Eastern region for color-coated and Galvanized products. Bokaro's 0.5M tons is small in 80–85M-ton flat products market. Crowding risk if competitors ramp faster.

Bokaro plant not yet certified (ISO, IATF 16949). Aspires to high-end automotive/institutional customers but certifications delayed until post-commissioning. Certification risk could delay revenue ramp.

Management cut guidance ranges (revenue 75%→70–75%, EBITDA 45%→40–45%, PAT 40%→35–40%) and avoided FY27 specifics. Q1 QoQ revenue –20.6%, PAT –42.9%, contradicting 'strong start' narrative. Credibility weakened.