Resilient topline masked volume miss; margins squeezed by energy costs

Finished goods sales volume down 7.3% YoY; industrial gas unavailability was primary drag

Revenue ₹11,278.5 Cr (+10.5%), PAT ₹768.7 Cr (+7.6%), EBITDA growth ~1.4%

Management sticking to range but admitting cost pass-through lag of ~50% on gas; revisions deferred to Q2

Q1 volume down 7.3% YoY; management explicitly deferred full-year guidance to Q2, conceding catch-up required

Plant still under local certifications; 'gradually' ramping, no Q1 contribution; timeline vague

Management confirmed demand 'never an issue, absolutely'; supply (gas) was bottleneck

Prior FY27 guidance 7–9% volume growth; Q1 misses at −7.3% YoY. Management now says 'stick to H1 guidance' but deferring full-year to Q2, implying catch-up needed.

₹18k–20k per ton maintained, but management admits gas cost not fully passed (~50% lag). Revisions deferred to Q2 'if any change required,' signaling pressure acknowledged.

SMS under 'local approvals and certifications' with no Q1 contribution. Expected 70–80% by FY27-end but currently 'ramping up' (vague) vs. productive contribution.

CEO: 'Give us 1–2 quarters...don't want to mention something and revise again.' No new timeline; this is the second or third deferral.

₹2,400–2,600 Cr for FY27 reaffirmed, on track. Cold rolling expansion to 2.67 Mt by FY28 on schedule.

Sticking to H1 guidance numbers started with. If any change, will update in H2.

Now started ramping up, under local certifications. Gradually sales will start coming up.

Still sticking to guidance. Try to pass costs to customer both ways. If any change, end of next quarter I'll come back.

Definitely would have delivered volume guidance if situation hadn't come. Gas increase India-specific, competitors didn't see same impact. Couldn't pass 100% due to lag.

Always gradual recovery. No magic wand to suddenly create that.

Already investing regularly. Focus now on downstream cold rolling, increase from 2 Mt to 2.67 Mt. FY27 capex ₹2,400–2,600 Cr on course.

Give us 1–2 quarters more. Don't want to mention something and revise again. Progressing, but need more time.

Too early to share these numbers. Give us another quarter.

Absolutely. Only targeting markets if we see substantial margin improvement. Domestic is priority, EBITDA maximization is philosophy.

ADD moving positive direction, verifiers being appointed. Public hearing Sep 9 is part of process; verifiers will travel then findings come after. QCO extension to March '27 likely; after that, we're pushing for no further extension.

Will ask Angad to take offline. Lot of work done, high scores from DJSI, Sustainalytics, S&P. Scrap-dependent so robust.

Less than 2–3% from Europe. 90–95% from domestic and Southeast Asia. Focused supply chain development over last few years.

Around Q3 this year, sometime should get ready. Then time to reach rated capacity.

Absolutely, demand was never a concern or never an issue. Whatever we produce, we will sell.

Q1 '27: 35%, 47%, 18% respectively.

Not gone below pre-war levels from peak in Q1. Come down 40–50% from peak but still fluctuating due to global actions. Down from high Q1 levels.

Yes, absolutely. PNG at Jajpur, pressure and availability improved. Back to our pre-war levels.

Nothing further planned by us. SAIL done similar deal with govt entity (welcome move). POSCO did same 4–5 years ago. Shows supply chain security critical.

Export strategy but domestic priority. Europe quota system impacting, Middle East war impacting, but pre-empted and developed new markets: Brazil, Colombia, Korea, Japan.

Chromeni at 80–85% utilization, continuing to increase. Chromeni was major saver in Q1, only plant on full PNG when gas disruption. Rathi at ~70%, learnings from new entry, optimizing mix.

H1 guidance 'sticking to,' but Q1 miss of 7.3% means H2 must deliver ~20% growth to hit 7% full-year. Management now deferring full-year revision to Q2 results.

Gas cost spiked but management only able to pass ~50% through. Sticking to guidance on technical basis but admitting lag; revision deferred to Q2 'if any change required.'

On track. Jajpur, Hisar, Kharagpur projects progressing. HRAP 1.1 Mt expected Q3. 600 Nm³/h green H₂ at Jajpur expected August 2026.

Quantified and capex-backed, but Q1 volume miss (−7.3%) and Indonesia SMS ramp delay create near-term risk to trajectory.

Early Q1 gas shortage reduced finished goods volume 7.3% YoY. PNG transition at Jajpur started, but Hisar, Ghaziabad alternatives still in planning. No diversification complete yet.

EBITDA grew only 1.4% vs revenue +10.5%; power/fuel hit 10.5% of topline. Management admitted unable to pass 100% of gas cost increase due to pass-through lag. H1 EBITDA per ton ₹18k–20k guidance at risk if cost normalization stalls.

1.2 Mt melt shop still under local certifications; no Q1 contribution. Expected 70–80% utilization by FY27-end (typical first-year ramp), but timeline vague. Slippage would impact slab sourcing for downstream and weigh on 3.5 Mt by FY29 target.

Europe quota system reducing headroom; MENA war constraining Middle East sales. CBAM compliance manageable (scrap-intensive, high ESG scores) but quota reduction flagged as bigger issue. Diversification into Japan, Korea, Brazil ongoing but requires time.

CEO explicitly deferred clarity to 'another 1–2 quarters,' echoing same language from prior calls. No progress announced; major expansion on hold. If delayed materially, capacity growth path to 3.5 Mt by FY29 could be at risk.