Ladies and gentlemen, good day and welcome to the Q1 FY26 earnings conference call for Sarda Energy & Minerals Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Jain from Stellar Investor Relations. Thank you, and over to you, sir.
Thank you, Shruti. Good evening, everyone, and thank you for joining us today. To discuss Q1 FY26 business performance, we have with us the senior management team of Sarda Energy & Minerals Limited, represented by Mr. Pankaj Sarda, Managing Director; Mr. Padam Kumar Jain, Director and Chief Financial Officer; Mr. Manish Sarda, Deputy Managing Director; and Mr. Nilay Joshi, Executive Director. Before we proceed with this call, I would like to mention that some of the statements made in this call may be forward-looking in nature and may involve risks and uncertainties. The company also undertakes no obligation to update any forward-looking statements to reflect developments that occur after the statement is made. Documents relating to the company's financial performance, including the investor presentation, have been uploaded on the Stock Exchange and the company's website.
I now hand over the conference call to Mr. Pankaj Sarda, and then we will open the floor for Q&A. Thank you, and over to you, sir.
Thank you. Good afternoon, ladies and gentlemen. Operational performance: FY25 marked a significant milestone in our growth journey, and Q1 FY26 performance reinforces the strong foundation and long-term sustainability of our earnings. The earnings mix has also evolved with an increasing share of energy business in the total earnings. We achieved record revenue and profit this quarter, driven by better energy prices and higher hydropower generation. Hydropower generation grew by 37% YoY, supported by early monsoon. Our IPP thermal power plant achieved a significantly improved plant load factor of 90.21% in Q1, as against 71.65% in Q1 FY25, largely due to ongoing operational efficiency measures. For the quarter ended, the plant stood at 15th rank in Central Electricity Authority's ranking of best thermal power plants against 118th rank in June 2024. The pellet plant and captive power plant also reported record production.
We strategically terminated the long-term power purchase agreement executed with CSPDCL for a 113-MW hydropower project. This now gives us the opportunity to sell power in the open market, which we believe will be beneficial over the long term. Expansion and project updates: Coal mines. Gare Palma IV/7: w e have received consent to operate for an increased capacity of coal washeries from 0.96 million tonnes to 1.8 million tonnes in May 2025. Final approval for increasing coal mining capacity from 1.68 million tonnes to 1.8 million tonnes is expected this quarter. Shahpur West mine development work is progressing as per schedule, and production is expected before the end of the next financial year. Bartunga Hill JV: DPR and mining plans submitted to SECL. Forest land diversion approval is in progress. Power plants: Rehar Hydro Power Project, 25 MW. The commercial operation began on 8 July 2025.
We have entered into a long-term power supply arrangement with CSPDCL at generic tariff. Generic tariff for the current year is yet to be notified by the regulator. Kotaiveera Hydro Power Project, 25 MW. The project is in the approval stage, with work expected to begin in the next quarter. Two additional small hydro power projects are in various stages of approval. Captive solar power, 50 MW. Most of the equipment has been delivered, and transmission line work is ongoing. Project commissioning is expected in the current financial year. 30 -megawatt TG set replacement. Work is on schedule, with operations expected to begin by mid-FY27. We will be taking shutdown of the unit in the next quarter. Financial performance: In Q1 FY26, we posted record consolidated revenue of INR 1,633 crore, up 76% YoY and 32% QoQ.
The YoY increase partially reflects the inclusion of IPP operations required on 22 August 2024. Improved volumes and realizations in steel and ferro alloys also contributed, especially after maintenance shutdowns impacted Q4 FY25. Profitability: Operating EBITDA rose to INR 627 versus 382 crore YoY, with the energy segment contributing a larger share. Consolidated profit after tax grew 118% YoY to INR 435 crore. Strong price realization for untied-up power supported their growth, though prices have softened this quarter. Debt and liquidity: Net consolidated debt, including working capital loans, fell to INR 1,000 crore, from INR 1,600 crore. Long-term loans repayable within the next year stand at INR 206 crore. Liquidity remains robust, with INR 1,700 crore in cash and liquid investments, excluding treasury loans. The net debt-to-EBITDA ratio is well below 1. I now hand over to Shri Manish Sarda-ji to discuss the industry overview and outlook. Over to you.
Thanks, Pankaj. India's fiscal deficit is projected to decline to 4.4% in FY26, down from 4.8% in FY25. The lower inflation has enabled early rate cuts supported by RBI's liquidity measures. Infusion of liquidity by RBI has helped in the transmission of rate cuts to the industry. This will positively impact corporate earnings and CAPEX. Tax breaks are also expected to boost consumption. Global steel production declined over 4% year-on-year in Q1 to 466 million tonnes, with China down 6%. Despite this, Chinese exports surged, with net exports exceeding 53 million tonnes during January to May 2025, putting pressure on global pricing. In contrast, India recorded 10.3% growth in crude steel production to 40.6 million metric tonnes, with 8% growth in finished steel demand. Imports moderated post-imposition of safeguard duty and quality control order, but still exceeded exports.
Although, because of higher growth in production over consumption, the long-product steel prices remained under pressure. Lower input costs like iron ore and coal helped improve margins. The Indian Coal Index declined by 13% year-on-year, from 142 to 128. We have focused more on the domestic market for steel or ferro alloys due to better realization. As a result, exports in Q1 dropped to 21,500 metric tonnes, from 32,500 metric tonnes year-on-year. Outlook: The Chinese government has recently announced another stimulus of CNY 69 billion to tackle consumption bottlenecks and to bolster the domestic market amid global volatility. This will be the fourth batch of stimulus, bringing the total to the annual target of CNY 300 billion. This should be positive for metal markets, and margins should improve, particularly due to fall in input prices. Fall in interest rates will enhance competitiveness and spur capital investments.
Increased government spending is expected to support economic growth and credit expansion. Power demand, and so the power prices, remain subdued in the monsoon season, except for long-term supply contracts, which will have bearing on the performance quarter on quarter. However, higher generation from hydropower projects in the quarter will partly offset this. Commissioning of Rehar Hydro Power Project will also add to the performance of the Q2. Lower finance costs are expected to further strengthen profitability. That concludes our performance and outlook. The performance improvement measures at our IPP are clearly reflected in the results. We remain confident of delivering .
Let us put the floor to the—
Yeah, okay.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mahek from Agility Advisors. Please proceed.
Yeah, hello, I'm audible?
Yes.
Yes, sir.
Yeah, thank you so much for the opportunity. So, I just wanted to understand, so we have taken a resolution to raise INR 1,000 crore of debt. So can you please specify what are the plans of the company with the debt which we are raising?
Can you come again? We lost you in between. Hello, can you come again, please?
Yeah, sorry. Thank you. So I wanted to understand. So we took a resolution for a 1,000 crore debt raise. So can you please explain what are the plans of the company? Where are we planning to utilize them, and when are we planning to raise this?
Yeah, this is only an enabling resolution. So that in case of companies with AA and above ratings are required to part-finance their working capital requirement through market-listed borrowings. So it is only an enabling resolution. We don't have any plans as such to raise any funds. And this resolution has been taken in the past also, but we have not raised the funds.
Okay. That's it from me, sir. Thank you.
`Thank you. The next question is from the line of Manav from YES SECURITIES Limited. Please proceed.
Yes, hi. Very good evening, and thank you for the opportunity. Also, congratulations on the good set of numbers. My first question is on the date of the Supreme Court case on the SKS acquisition. Where are we as things stand currently?
So as of now, it is listed for 6 August 2025, which will be after tomorrow.
Okay, got it. So 6 August is when we expect a final— It's going to be an interim hearing or a final hearing?
So whenever the hearing will happen, it is a final hearing only. But as of now, it is listed for 6th. That's all that we can say.
Sure, sure. So okay. The other thing on 1.8 million tonnes of the coal mine. So earlier, we were expecting it during the Q1. Now it's shifted to Q2 FY26. I mean, if you could just enlighten more on that.
No. We already have permission for 1.68 million tonnes. And whenever we get during the year, even if we get by December or January, we will achieve the 1.8 million tonnes during the year. So it is irrelevant whether I get in March, June, or September. Because for the year, we will be able to achieve. It's only in the process, in the final stage of approval. So it will not affect our annual target of 1.8 million tonnes.
Got it, got it. Sure, sir. So my next question is much more for the steel business. How do you see the realizations shaping up for Q2? Because I believe the long products are seeing realizations quite subdued. Do we see any improvements on a quarter-on-quarter basis?
So typically, you know that monsoon season is a season where long products' prices are always subdued because construction activities practically in many parts of the country get to a hold sort of thing. So we are hoping that now, with the consumption pattern going forward, with the monsoons getting over, the prices also will improve along, and the demand also will improve.
Got it. And so will we continue to maintain our position, right, on not taking further expansions on the steel front and focusing mainly on the power story for the company?
Yeah, as of now, the expansion is focused on energy and wire rods only, yes.`
Got it, got it. Sure. So I have no way to join back the queue. Thank you so much for the opportunity.
Thank you. The next question is from the line of Rakesh Roy from Boring AMC. Please proceed.
Hi, sir. My first question regarding again is the realization and volume term. If you see the volume term on a PMA basis, our steel volume grew by nearly 22%. But at the same time, our realization is down by 23%. Any reasons for the sudden jump in volume and big drop in realization?
Realization is not down 23% in steel.
Overall, sir. Because if I take steel, if I take your number, steel number is revenue divided by the volume, like iron ore, pellets, sponge, and this one. So it comes nearly how much has come—
Hello! [Crosstalk] You refer to our presentation, which has been uploaded on the Stock Exchanges. So if you refer to slide number nine, you will get all the steel and ferro alloys realizations over the quarter that all details are there. So you can see for yourself the realization— I mean, what you are saying is not adding up, actually. Just look at the slide, you will have clarity.
Okay, okay. Right, sir. Because I have just taken the number from—
No. No—
—what you are doing for steel detail.
We disclose realizations every quarter for all the steel products and ferro alloys. So if you have a look at the slide, you will get clarity.
Okay, right, sir. And sir, in terms of, sir, from Q1, how much is our realization power, sir? How much is the unit per unit, sir?
That is also given on slide number 6.6. So yeah, 6.16.
Slide number 6, sir. Okay, right, sir. And sir, last question regarding, sir, any outlook for your steel for whole year and power for whole year for FY26? Any guidance?
So far as volumes are concerned, steel volumes will remain more or less same. Slightly—
Like yes.
Whatever increment is there on account of the efficiencies, that will be there. Otherwise, steel volumes are stable.
Like FY25?
Yeah, yeah.
And regarding power?
Power also, because last year it was only for the whole year, you can assume 80% PLF.
80% PLF. And sir, in terms of margin, margin will improve or margin will sustain this Q1 for next two, three quarters? For Q1 margin?
We have already given details in our opening remarks, and it is subject to the market conditions. Depends on the market prices.
Okay. In short term, if you see, sir, in Q2, mostly, I can guess your margin will improve because coke price is down. Can we assume?
There are multiple factors: coal prices, iron ore prices, then steel prices. There are multiple factors. But our outlook, we could say we have already covered in our opening address.
Right, sir. Right, sir. Thank you, sir.
Thank you.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Priyansh, a n investor. Please proceed.
Hello. Hi, am I audible?
Yes.
Yeah. Hi. Thank you everyone for this opportunity. My first question is regarding the hydropower project. So we know that the PPA has been terminated. In this regard, please reply to the following questions. At what rate the power was being sold under the PPA Sikkim project? A nd at what rate is the company fetching now for sale in spot market or to other customers for the sale of this power? Is the company able to sell the entire 130 MW in spot market, or some power remains unsold during—after the termination of this PPA? Also, what was the reason which led to the termination of this PPA? The second question is regarding the steel division. So it has been exceedingly well, doing well in the past quarter?
You can come one by one. One by one questions. That will be better.
Okay, okay. So can you. Yeah.
The question is on the hydropower project?
Exactly.
Yes. So that will respond first.
Okay.
We had entered into power purchase agreement with cost plus tariff, so our tariff was going down year on year as the interest burden was going down, as our cost was going down, our tariff was also going down, and the transmission cost was on our head, so revenue was going down year on year. That's why we decided to terminate this agreement, and we are selling power in the open market. We are able to sell 100% of the power. A nd annual average of the realization for the time being may remain at the levels what we were getting previously, but yes, in longer term, we will be getting the benefit of the increasing rates of power over a longer period of time.
Okay. And do we have any estimate on the average rate that we're selling per unit?
Average, it depends season- to- season. It will vary, but it should be somewhere in the range of INR 5 plus/ minus.
INR 5 plus/ minus . Okay.
If you look at the annual average, it should be.
Understood. Okay. Got it. I'll move on to my next question then. So we know that the steel division has been doing exceedingly well in the Q1, 25/ 26, since the revenue increased by 10% QoQ, but the profit jumped by 100% QoQ. So my question is, is this jump in profitability of the steel division sustainable in the current quarter or even next quarter? Or was there any one-off item in the June quarter which led to this really high jump in profit?
No, there was no one-off item in the steel division. Yes, volume had also gone up as compared to the March. In the March, there were certain shutdowns in the plant. So steel division, there is no one-off item. And we should be able to sustain and improve from here.
So we'll be seeing a similar growth is what you're believing.
Yeah.
Understood. Okay. That's it. That's it from my end. Thank you so much for your question answers.
Thank you. Participants who wish to ask a question, may please press star and one at this time. The next question is from the line of Gautam Jain from GCJ Financial. Please proceed.
Yeah. First, congratulations for a solid set of numbers. My question is, can I get the break-up of your power business segment revenue, which is like INR 939 crore? Can I get the break-up of that into captive IPP and hydro?
We can provide offline, may not be available immediately, but that will be available. That should not be a problem.
In the hydro business, hydropower business, is it like that your Q1 and Q2 are better than the last two quarters?
Your voice is cracking. Repeat. Always in hydro, Q2 is always better than the last quarter.
I mean, the first two quarters are better than the last two quarters of the financial year, right?
Not always. Q1 may not always be better than the Q3. Generally, Q2 is the peak generation because of the rainy season. Q3 is a little lesser than that. And first depends upon the incoming of the monsoon. If it is early monsoon, we get good rains. And sometimes if monsoon comes in June, then revenues may be on the lower side.
Okay. And the last question is, you said about Chinese stimulus, and that would be good for the steel pricing. So are we seeing better pricing Q2 versus Q1?
Manish-ji?
Yeah. No, no. Chinese stimulus has just come around right now. We have just recently seen that the Chinese stimulus is there. We'll have to wait and see. But I'm sure that once the monsoons are over, we'll see better pricing and better demand as well.
Okay. Okay. May I ask one more question?
Sure.
Yeah. So with regard to your gross debt and cash level, which is around INR 2,700 crore of gross debt and INR 1,700 crore of cash in hand, so what are the repayment schedule, if I may know?
INR 1,000 crore is the loan and INR 1,700 crore is the cash. Both are opposite. It is not—it cannot be combined together.
No, no. I know. I'm saying gross debt is INR 2,700 crore and cash surplus INR 1,700 crore. So net debt comes to INR 1,000 crore. I'm asking is, what is the repayment schedule on the gross debt side?
Repayment is hardly— for the current year. It is only INR 200 crore for the current year.
What will we do with the cash in hand because that is substantially rising because of our cash flow is very strong?
It's an opportunity, right? Opportunity. And definitely, our growth plans are going on. We are spending about INR 500 to 2,000 crore a year on the expansion projects in different segments, whether it is coal mines, hydropower projects, and other projects.
So may I know total CAPEX for next three years, including current year?
As I told, every year we have been spending in the range of INR 500 to 1,000 crore a year. As of whatever we have planned for next two, three years.
Okay. So that will continue even from 2026, 2027, 2028, right?
This is what we have already planned, and there may be new opportunities also.
Okay, okay. Great. Thank you so much. You have been doing very, very good. Thank you. You created a lot of wealth, and we'll continue to do more of the best.
Thank you.
Thank you.
Thank you. To ask a question, please press star and one now. The next question is from the line of Rajesh Bhandari from Nakoda Engineers. Please proceed.
[Foreign] Sir, good afternoon. और इतने बढ़िया रिजल्ट के लिए बहुत-बहुत बधाई, sir. मां शारदा, स्वस्ति, लक्ष्मी सबकी कृपा है। और यह कृपा बनी रहे, यही हम चाहते हैं। बहुत ही बढ़िया रिजल्ट रहा है, sir. बहुत-बहुत बधाई उसके लिए। अच्छा, sir, आपके बातों से यह पता चला कि स्टील में और ferro alloys में ज्यादा अपना एक्सपांशन का मन नहीं है. It's more on power and mining. तो mining में अगर है, तो we will remain only in India और we will explore on outside India also and rare earth also. और power में जो है, sir, अभी अपने पास 600 MW चल रहा है. तो additional जो auxiliary 600 MW की है already, do we have any plans for expansion of that 600 additional?
The infrastructure is there for 1,200 MWs.
Yes, sir.
We definitely will be going for environmental clearances for another 800 MW in future. That much land and everything in the infrastructure is there.
Yes. It looks like.
And what was your other question, sir?
[Foreign] Mera tha, sir, ki jaise abhi steel mein jaise baatcheet se pata chala ki steel and ferro alloy mein apne expansion ke plans jyada kuch hai nahi man mein abhi. It's more on power and mining?
Because this 800 MW itself will take around INR 8,000 crore of CAPEX.
[Foreign] हाँ।
[Foreign] तो।
[Foreign] Aur main, sir, main ek cheez bolna chahunga ki ye jo hai, this is the indication ki aap log kitna samajhdari se aage badh rahe hain. And this will turn the small cap into a large cap company. Because steel aur ferro alloys mein itne log ho gaye hain, power is the best thing jismein aap ja rahe hain abhi, and mining also.
[Foreign] And hamari taraf se aapko bahut-bahut badhai aur shubhkamnaayein ki yeh jo line mein aap badhenge, to uske saath ham logon ka bhi kuch bhalai hoga. But mere ko ek hi cheez poochna tha, sir, ki mining mein abhi outside India bhi jaane ka kuch program hai apna aur rare earth mein bhi kuch program hai? So we have an operating mine in Indonesia
[Foreign] Uska expansion planning chal raha hai.
Yes.
God willing, we will try to achieve one million ton in near future in that mine, coal mine.
Yes.
[Foreign] And kahin par bhi koi opportunity aayegi, to we are open for any opportunity.
[Foreign] Ji, ji, ji. Nahin, chaliye, theek hai, sir. Meri taraf se abhi to filhaal. Achha, doosra mera ek cheez tha, sir, ki jo loan ke liye aap soch rahe hain, to aap to itne badhiya result de rahe hain, QIP ke liye koi dikkat hi nahin hai, sir. Log to hazaaron crore de denge. Khaali hazaar kyun?
[Foreign] नहीं, अभी।
[Foreign] जिस तरह से दूसरी कंपनियाँ ले रही हैं, हाँ?
[Foreign] Abhi apna koi plan hai nahi fund raise ka. Immediate mein aisa koi plan nahi hai.
[Foreign] Ji, ji, ji.
[Foreign] Achha, achha, achha. Main theek hoon, sir. Aur main, haan, mera aur koi question hoga, to I'll come further. Ji.
Thank you.
Thank you, sir. Thank you very much.
The next question is from the line of Priyansh, an individual investor. Please proceed.
Yeah. Can you hear me?
Yes, sir.
Yeah. My question again pertains to the Sikkim Hydropower Plant. So what was the average generation of power in the June quarter, and what was the power generation in the July month?
Just a moment.
Yeah.
June quarter, the numbers that you see in the investor presentation for hydro, that is largely from Sikkim.
Okay.
This is, we had 100 million units.
100 million units. Okay. And in the July month?
July, we shall have to take immediately. We don't have it at hand.
Okay, okay. Maybe I can reach out later to the team then.
Yeah, yeah. You can offline.
Understood. Okay. That's it. Thank you.
Thank you. The next question is from the line of Vedant Sarda, from Nirmal Bang PMS. Please proceed.
Thank you for the opportunity. I wanted to know that what kind of ROCE we are targeting for the CAPEX plans and for overall as a company?
See, return on capital employed will differ project to project, but there are certain projects which are related with integration. There are new projects. So there are multiple variables and for different projects. Because if you go for hydropower projects, ROC expectation is different because there you have consistency in the profitability. Then if you are going for the steel projects, then ROC expectation will be different. So specifying specifically, this is my ROC expectation project to project and looking to the market condition.
And ROC also, you have to see only in the terms key whether market is in the upward mood or downward mood. In case of steel sector, when you enter into the market is already down, ROCE immediately if you compare, that may not be very good. So ROCE is totally dependent upon the market conditions, but definitely it should be much better than our weighted average cost of capital. That is what the criteria is.
Yes, sir. Like we don't have any.
No, no, just to add to that. S ee, like Mr. Jain already explained, different projects will have different decision-making parameters. But I would suggest that while we don't want to give a ROCE number, but you can go by our past actions, okay? Because historical numbers are there for you to see. So normally that is the decision-making that we are applying. You can go by the past actions. We don't want to put a number to it right now.
Okay. Like we don't have any plans for steel expansion currently, and you better hold any kind of opportunity if you see. You would like to grab that. So like if you find any kind of mine or anything, any project you are wishing, so some kind of number set if you can give. Like you are growing a company, you would be continuously doing CAPEX, it seems.
No, no. See, there have been multiple large CAPEX that we have done in the last few years itself, okay, that you would have seen, whether it was SKS Power, it was the hydropower project, etc. So there you can take the thought process, you can understand the thought process. We don't want to put a number because that becomes restrictive, and that is not the only decision-making factor. It is an important decision-making factor, but not the only one.
Okay, sir. Fine.
Thank you. The next question is from the line of Arpit Shah from Stallion Asset. Please proceed.
Hello. Can I hear you?
Yes, you are.
Yeah. Just congratulations on very great set of numbers, great acquisition in terms of SKS Power. I just wanted to understand the power that we generated in the quarter one by realization of closer to INR 6.16 per unit. So how should we think about this number? I think we were getting around INR 5 per unit earlier on, maybe in the second or the Q3. How should we look at this number going ahead? This is a sustainable number, or this is a number just for quarter one, and it just drags down and brings the total annual average to INR 5 per unit?
No. This, what we earned in the Q1 may not be the right number for the whole year. Definitely, generally, Q1 is always better because of the summer seasons. But in addition to that, there are multiple variables which decide the power pricing. So Q2 always remains subdued. Q3 and all other things, other quarter pricing depends upon the demand supply, then climatic conditions, how long the rains go on. There are multiple variables. But yes, Q1 is definitely better for the thermal power pricing, which may not be true for the whole year.
So how do we then look at because you're already operating in 90% load factors, how should we think about SKS Power numbers for FY26? And since you already got a new hydropower plant operation from November to December, how should we look at the whole of the power segment in terms of EBITDA for FY26?
It's already told so far as capacity utilization. It comes under annual average should be somewhere in the range of 80%, what we gave the guidance.
All right. But how should we think about the absolute?
30%.
Yes. How should we think about the absolute?
How can we think about the hydro? We can expect 30% PLF and more. Somewhere in the range of, tell me?
So how should we think about the absolute EBITDA number for FY26 because it's just power plant?
Absolute EBITDA, we don't give any specific EBITDA numbers. Last time also we had stated in general our power generation from the thermal power project should be in the range of 400 crore plus minus units. EBITDA will depend upon the electricity pricing, which varies in the range. EBITDA may range somewhere about INR 2 plus minus 0.50 paisa.
Got it. And what kind of power generation in terms of units should be for hydropower?
Hydropower total 167 MW is running. 40% plant load factor, 148 MW.
167 MW.
Total is 166. 166, one more started.
Okay. How much would be in terms of units?
No, no. 167 MW, and you take around 40%-45% maybe of PLF, you know?
Got it.
Maybe about INR 60 crore units you can assume.
INR 60 crore.
INR 60 crore around.
Got it.
But then this is all dependent on rains, you know? So it is, see, the right way to look at it, I would say, is your thermal will be very strong in the Q1. Your hydro will be very strong in the Q2. And the other two quarters, I mean, Q3, there will be some hydro and thermal will be okay. So, I mean, it will taper off for the third and Q4, maybe a little weakness in hydro, you know, because of the rains not being there. So that's the right way to look at it. The Q2 should get support from the hydro power generation, while thermal might be a little weak.
Got it. So broadly, what we have to see is annually, we're probably going to be at about 450 crore odd units combined hydro and thermal. Our EBITDA per unit should be INR 2 plus or minus INR 0.50. That comes to about, let's say, closer to 1,000 crore plus EBITDA for the power business as a segment. That's how we should think about it?
I think that could be the reasonable expectation. Rest depends upon the market condition.
Got it. Perfect. So we got it. Thank you so much. Thank you.
Thank you. The next question is from the line of Manav Gogia from YES SECURITIES Limited. Please proceed.
Yeah. Hi. Thank you so much for the opportunity again. So one question, much more on the numbers front, it was for hydropower. Would you be able to provide the average selling price per unit for the quarter?
We don't have immediately, but it should be somewhere in the range of INR 5.
Okay. More or less INR 5 on an average. Got it. Got it.
And so. INR 5. Plus. Plus side.
Oh, sorry, I could not get you.
INR 5 plus.
INR 5 plus. Okay. Got it. Got it. Sure, sir. The second question would be on the power segment, when would you be able to specify some ballpark timeline of doubling the SKS power capacity?
It's because it's a long-term process of approvals. We have to go for all the environmental clearances and those approvals. So giving any timeline at this stage will be too early.
Got it. Got it. And so currently, we are doing the Gare Palma expansion from 1.68 to 1.8. And I believe the company's end goal would be to make sure that that mine is particularly captive for your SKS Power. So how do we see those expansions going ahead post 1.8 million for FY26? And then if you could give some breakdown?
So post that, we are evaluating. I think so we'll take it again, it totally depends on the environmental clearances in place. We'll try to expand it to 3 million ton plus.
Got it. And we'll be applying for fresh ECs for this expansion?
Yeah. Fresh EC has to be applied. So after all the process will start, after we receive 1.8 million ton environmental clearance, all the approvals and everything for fresh ECs will be applied.
So more or less, we can assume an 18 to 24-month period to have things all on hand.
Max.
Can be a fair assumption, right? Maximum. Sure. And so one question on if you could quantify the landed costs for imported coal for the steel operations, just in case you have it handy?
RB2 and RB3 coal landed to Raipur. The freight also changes from time to time from Vizag to Raipur. Somewhere around INR 8,000 per ton to INR 10,000 per ton.
Sure. So we have seen some benefits on the cost front due to the prices going down in the international market. So they are yet to be accrued probably in the next quarter.
Manish Viya?
No, we have been trying to avoid imported coal as much as possible as the domestic coal is also available, and our entire aim of the group is to ensure that we utilize maximum coal from our own mines, and only the shortfall is what we are trying to source from international markets, and that too many times we get good quality coal in auction from the Indian mines, so we are trying to maximize that strategy more rather than depending upon imports.
Got it. Got it, sir. So one last question I wanted to have. Basically, currently the SKS power, we are selling it on IEX, right, if I'm not wrong?
No, we have a mix. We are selling part of the quantity, but generally it is short term, not on daily basis. We have bilateral contracts for short term, medium term, both ways.
Got it. Okay. And do we plan to have the PPAs for the SKS pipeline in the upcoming months or two years?
We have PPAs, but there are some medium term PPAs. There are some short term PPAs. And a part of small quantity, sometimes we sell even on the IEX on daily basis also. Depends. This is a mix of a mixed basket of the PPAs.
Got it. Got it. So my main agenda was to just realize that we currently had a realization of around about INR 6.16 per unit. So we can expect if more PPAs are in place, this realization number to probably go down a bit in the.
No, see, it is like this. On the PPA, our stated thought process is clear. We had outlined it in the last call also that over, I mean, we had the idea is to enter into a stable PPA, a long-term PPA. So maybe tie up a significant part of the capacity in long-term PPA and the balance take the benefit of the market forces. So that is the broad idea. We are in the process of executing that.
Sure. Sure. Thank you so much for that. That was very helpful. Thank you so much and all the very best.
Thank you.
Thank you. The next question is from the line of Rakesh Roy from Boring AMC. Please proceed.
Yeah. Hi, sir. So one question regarding your margin front. As you mentioned, nearly 76% of revenue from EBITDA comes from the power sector. And same with our steel business, if you minus these EBITDA numbers from your power revenue, our steel EBITDA will get 150. This is 18%, sir. So what is your outlook and how is the Q4, Q1, FY25 margin for steel business?
Q4?
Q1, FY25.
Yeah.
So this quarter, our steel margin is nearly 18% as per your data, sir.
Okay.
So you have your data diya hai, huh? So Q1, FY25, how much our steel margin is?
Q1, FY25?
Yeah.
Historical results. We'll take a look, sir, Q1, FY25. You'll get it on the exchanges.
If overall margin, because it includes hydro also, sir, in Q1, FY25. I'm saying the only steel margin, sir.
No, no. We disclose segment-wise EBITDA. You can refer to our past results.
No, no.
For the quarter you want to.
Exactly, sir. I'm asking all this, sir, not EBITDA. EBITDA's the number.
Last year it was definitely much better than compared to the Q4 and the Q1 26. Q1, FY25 was better than current year. But it's specific.
Okay.
Depreciation is EBITDA. Sorry, what is your question? Can you repeat your question? Q1 was.
My question is, sir, this quarter, our steel margin is 18%. Okay? Same last year's Q1, how much is our steel margin, sir? EBITDA number.
No, no. If you go to slide number six of the presentation, you will get Q1, FY25 total EBIT broken up into the various segments. Steel.
Exactly, sir. But this is for EBIT number. I asked you about the EBITDA number, sir.
That you can write to us, we will provide you. We don't have all.
Right. Okay, sir. And sir, same thing, sir, can you assume this number will improve from here onward? 18%?
It should. I mean, there is a lot of discussion already. We were part of it. We have given enough for the margin number.
Okay. And sir, any chance in August or September you will get any price hike? Because as you say, price will increase or price will rise after monsoon. Any idea how much you are going to take and how is the market condition that time? Can you give me the light on this?
No, no. Price movement is going to be on the market. Hello?
Hello?
These are hypothetical questions. I don't think we will be able to give anything on that. Whatever outlook we could say, we already given in our opening address. Rest depends upon the market conditions.
Right, and sir, last question, as you mentioned.
Sorry, Mr. Rakesh, sir. May we request you to join the question queue?
Right.
Thank you. The next question is from the line of Jayesh Gandhi from Harshad Gandhi Securities Private Limited. Please proceed.
Congratulations on good set of numbers. I have two questions. The first one is, what is our average realization for SKS in July?
July, we could be able to provide you off the line. We don't have in hand immediately.
Okay, but is it five plus or we should think about less than five?
It should be in the range of INR 5.
Okay. And my another question is, apart from whatever commission.
5 plus only. I think 5 plus only. It will be 5 plus only.
Okay. And my second question is, apart from whatever capacity we have shown, which is commissioned for power, is there any additional capacity that we can think about getting commissioned this year?
No. There is no other capacity which is getting commissioned this year except 50 MWs solar power plant. That will get commissioned during the current year.
That will be for captive consumption, right?
Yes. That will be for captive consumption.
That's all from my side, sir. Good luck for future.
25 MW already commissioned in July.
Yeah. Yeah. Thank you. Thank you very much.
Thank you. The next question is from the line of Mahek Talati from Agility Advisors .
Hi, sir. Thank you for the follow-up. So wanted to understand, so we have a hearing scheduled with the Supreme Court in the next two days. And we are planning to proceed with Capex for the SKS as well. So can we assume that the INR 1,000 crore debt resolution can be used here as for the CAPEX as well?
Even if we start getting approvals, at least for the next one and a half to two years, there won't be any CAPEX on that particular SKS project. So this resolution, what we have taken, will not be applicable for the SKS power project.
Okay.
We will need only for a year. It is just an analytical question to clarify. It is just an analytical question. We take it as a year.
No, that I understood. And sir, second question was, did we see any price drop for the coal which we are acquiring for our SKS power plant? Or they have been flattened?
For SKS power plant, we are getting coal at the notified price.
Okay. So no change in the acquisition cost, right?
There is no.
Okay. Understood. Understood. Thank you.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. Participants who wish to ask a question, may please press star and one at this time. The next question is from the line of Rajesh Bhandari from Nakoda Engineers. Please proceed.
[Foreign] Thanks for giving me a chance once again. Sir, मेरा एक point था, ये BSE side के ऊपर में जो आप result दिखाते हैं, वो actually stand-alone वाला result आता है, sir. So consolidated result अगर होगा, that is better because most of the companies, they give consolidated result. अपना जो आता है, वो stand-alone वाला आता है, sir.
[Foreign] Sir, दोनों आता है, sir. आप एक बार देखिएगा, दोनों आता है, presentation में भी दोनों रहता है, result भी दोनों आता है, sir.
[Foreign] नहीं, वो नहीं presentation में, वो जो अपना उसपे face पे जो आता है, ना, sir, वो वाला consolidated नहीं आता, वो आता है खाली ये. बाकी अंदर में detail में कोई जाता है, तो consolidated भी आता है, but normally people see only on the BSE का जो first page होता है, उसके ऊपर में. So most of the companies, they give consolidated. ये just एक request है, sir.
[Foreign] Pura ek statement mein saare result rahte hain, stand-alone bhi rahta hai, and consolidated bhi rahta hai. Ho sakta hai aage peeche ke page mein kuch hoga.
[Foreign] जी, जी.
[Foreign] ठीक है, बस यही.
Ha, sir, please.
[Foreign] जी.
Okay. Thank you, sir. Thank you.
Thank you. Participants who wish to ask a question, may please press star and one at this time. As there are no further questions from the participants, I now hand the conference over to the management for the closing comments. Over to you, sir.
Yeah. Thank you. The performance improvement measures at our IPP are clearly reflected in the results of the Q1 . We remain confident of delivering record results for the financial year 2026 despite sectoral challenges in the steel. Our strategy of reinvesting surplus cash into diversified future-ready projects continues. The company continues to reinvest surplus funds in diverse projects to ensure long-term sustainable growth. FY26 will benefit from full-year operations of the IPP power plant, increased coal production, and the commissioning of three new projects, which are 25 MW Rehar Hydro Power Plant, which commissioned in July 2025, mineral wool plant, and 50 MW captive solar power plant. Thank you for joining us today. Please feel free to reach out to us or our investor relations team with any further queries. Thank you.
Thank you. On behalf of Sarda Energy & Minerals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.