Ladies and gentlemen, good day and welcome to Sarda Energy & Minerals Limited Q2 FY 2027 earnings call hosted by Elara Capital . 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 Ravi Sodha. Thank you, and over to you, sir.
Yeah, good evening. On behalf of Elara Capital, I welcome you to the Q2 FY 2027 result call for Sarda Energy & Minerals Limited. From Sarda Energy, we have with us Mr. Pankaj Sarda, Managing Director, Manish Sarda, Deputy Managing Director, Padam Kumar Jain, Director and CFO, and Nilay Joshi, Executive Director. I now hand over the conference to Mr. Pankaj Sarda for his opening remarks. Thank you.
Thank you, Mr. Ravi. Good evening, friends, and thank you for joining us on our Q2 and H1 FY 2027 earnings call. I hope you have had an opportunity to review the financial results and investor presentation available on the stock exchanges and our company website. H1 FY 2027 marked a milestone for SEML with the highest-ever half-yearly EBITDA of INR 1,326 crore, up approximately 4% year-on-year, and PAT of INR 799 crore, up approximately 5%. Total income stood at INR 3,221 crore, while cash profit increased to INR 1,225 crore. During Q2 FY 2027, we recalibrated captive power operations in line with market conditions, enabling us to optimize our portfolio mix. The flexibility supported EBITDA of INR 564 crore and PAT of INR 320 crore on total income of INR 1,505 crore.
The performance, despite planned maintenance shutdowns and operational outages, reflects the strength of our underlying businesses and the benefits of our integrated operating model. Let me now take you through our operational highlights. A key operational highlight this quarter was our entry into manganese ore mining, securing preferred bidder status for the Avagudem manganese block in Andhra Pradesh. Operations are expected to commence in approximately 12 to 14 months. Once operational, the mine will strengthen backward integration, enhance raw material security, and improve cost competitiveness, supporting higher profitability in our ferroalloys business. We are now focused on securing the necessary approvals to restart mining operations. On the production front, we achieved our highest-ever half-yearly pellet output of 429,059 tons at Raipur. At Raipur, the replacement 30 MW turbo generator commenced operations in August 2026 and is operating smoothly at full capacity, supporting captive power generation and steel production.
At our 600 MW thermal power plant, planned maintenance of one 300 MW unit was completed following a 47-day shutdown during the quarter. We had to take multiple maintenance shutdowns over the last two years since the takeover of this thermal power project asset, as this was a distressed asset and had not undergone proper maintenance care, which was restricting it from achieving optimum performance levels. With the maintenance cycles of the last two years, we are now confident about the efficient functioning of the plant and expect both cost savings in the operations and higher generation going forward. Our hydropower operations recorded strong performance during the quarter despite lower rainfall in certain catchment areas and an 18-day shutdown of the 113 MW Sikkim plant from 18th June to 5th July following a transmission tower collapse. Alongside thermal power, hydropower remains an important part of our long-term energy strategy.
Let me now update you on our expansion plan. On the 600 MW thermal power project, the Ministry of Environment, Forest and Climate Change has approved the terms of reference for expanding capacity from 600 MW to 1,200 MW. We expect to receive environmental clearance within the current financial year. This brownfield expansion remains one of our most capital-efficient growth opportunities, supported by existing land, water availability, material handling systems, and power evacuation infrastructure. The approval process for our three small hydropower projects in Chhattisgarh with an aggregate capacity of 74 MW is progressing as scheduled. Our 50 MW captive solar project is expected to be commissioned in the next quarter, subject to resolution of right-of-way issues affecting the transmission line. The project will add to our captive renewable energy capacities.
For our recently acquired 66 MW hydropower project in Arunachal Pradesh, most key statutory approvals are in place, and critical land acquisition has been completed. Work on the approach road has commenced, and we remain confident of meeting the planned project timelines. On mining, development of the Sahapur West high-grade coal mine remains on schedule, with commissioning targeted before the end of the current financial year. The Bartunga Hill coal mine also remains on schedule and is expected to be opened by the end of the next financial year. Regulatory approvals for the Gare Palma IV/5 and Senduri coal blocks continue to progress as planned. We remain prudent in managing our balance sheet, with all ongoing expansion projects funded through internal accruals. We remain net debt-free on both a standalone and a consolidated basis, with liquidity exceeding INR 2,600 crore as of 30th September, 2026.
Our financial strength was further reflected in upgrade of SEML's credit rating by one notch from AA- to AA, and a two-notch upgrade in Sarda Metals & Alloys Limited rating from A to AA- by CRISIL. This strong financial position gives us the flexibility to execute our growth plans while maintaining financial discipline. Looking ahead, our priorities remain timely project execution and deeper integration across mining, energy, and metals. Our greater emphasis on energy reflects its earning potential, while our integrated operations allow us to respond to market conditions and allocate resources towards better returns. We believe this approach will strengthen earnings, visibility, and support sustainable value creation. With that, I'll hand over to Mr. Manish Sarda to take you through the industry environment and outlook.
Good afternoon, everyone, and thank you, Pankaj. India's expanding energy requirements continue to create opportunities for businesses with reliable generation assets and access to domestic resources. During the quarter, the country's power generation grew 11% year-on-year to around 536 billion units. Peak power demand increased 18% to 270 GW, a new high for the second quarter. As India adds renewable capacity, the requirement for dependable power across different hours of the day remains important. Solar generation increased 39% year-on-year during the quarter. Reflecting the pace of renewable energy development, we believe a diversified generation portfolio supported by fuel security and efficient operations is well-placed to serve the country's evolving energy requirements. The government's continued focus on domestic resource development strengthens the opportunity for integrated mining and energy business for SEML.
Expanding our mining capabilities alongside our power portfolio will deepen this integration and strengthen the operating foundation for future growth. Our entry into manganese ore mining adds a further opportunity to improve raw material security and cost competitiveness in ferroalloys. Domestic steel consumption also continued to grow, supported by the country's industrial and infrastructure requirements. We remain focused on the contribution of our metals and ferroalloys business with the integrated portfolio, with operating decisions guided by profitability and efficient use of our resources. Against this backdrop, we believe SEML is well-placed with its integrated presence across mining, energy, and metals. Energy's contribution of more than 75% of H1 EBITDA demonstrates its importance to our earnings profile. Our emphasis on this business is supported by existing generation assets, mining capabilities, and expansion pipeline.
At the same time, our diversified operations allow us to capture synergies and respond to changes in relative profitability. Over the longer term, government initiatives under Viksit Bharat 2047, Make in India, and Atmanirbhar Bharat continue to support investment across manufacturing and industrial infrastructure. Our plans to quadruple mining capacity and double energy generation capacity are aligned with these opportunities. Our priority is to convert these investments into dependable operations, stronger earnings, and sustainable returns. We remain confident that our integrated model and continued execution focus will create enduring value for all stakeholders. With that, we would be happy to take your questions. Thank you.
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, we will wait for a moment while the question queue assembles. The first question is from the line of Mallika from Agarwal Investments. Please go ahead.
Hi, sir. This is Mallika. Thank you for the opportunity. My question is that how will the Avagudem manganese mine strengthen raw material integration, and what proportion of captive requirements can it meet, and when should its cost benefits start reflecting in ferroalloy profitability?
Okay, so the Avagudem mines we have recently won, and it will take some time for it to start as we are filing all the paperwork that is required. We expect that we will be able to save INR 200 -INR 300 per ton. The total mine is 450,000 tons extractable reserves. We typically require very low amount of low-grade ore to economize our high-grade ore, which we import from Australia, from Gabon, and from South Africa. We expect that in the next few months, we'll be having a more clear idea as to when we can start with the paperwork being filed and everything done. It will roughly save around INR 200- INR 400. The exact numbers will come out when we actually start mining. But it gives us the raw material security for our low-grade ores for the next four to five years.
Okay, got it, sir. Sir, I just had another question. What is the investment like?
It was already operating mine. Somebody was already operating it. The lease has expired, and we have acquired it through the auction route. We will be ascertaining all the costs. We know the rough estimates. On that basis, we did the auction, and we participated in the auction. But it would not be prudent to comment right now until unless we ascertain the realities on ground.
Are you looking for more such things?
Yes, we are continuously looking for mines which can add raw material security to our entire operation because we have our ferroalloys plants in Raipur and in Visakhapatnam both. We are actively looking in Maharashtra, which is logistically closer to Raipur, Madhya Pradesh, Maharashtra, all the regions which are closer to Raipur, and in Andhra, Odisha, the regions which are closer to our Andhra plant. We are continuously on the lookout. If there is an international opportunity for manganese as well, we are looking out for that.
Got it, sir. Thank you so much, and congrats on this quarter.
Thank you.
Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and one on your touch-tone telephone. I repeat, in order to ask a question, please press star and one on your touch-tone telephone. The next question is from the line of Deepak Kumar, an individual investor. Please go ahead.
My question is, what is the difference between two shutdown? One you had taken in December and January for 300 MW, and just you have completed for 600 MW. What is the difference, and what is impacted in top line?
We have two power generating units of 300 MW each. In alternate years, generally shutdown has to be taken for every unit. Last year, we had taken for one unit. We have taken for another unit.
Then impacting top line, you have said it is a very stressed unit, and we have developed, so it will impact our top line?
No, it will not. It will exceed last year's generation.
Okay.
It will further improve our generation capacity. Yes, for the quarter, it has impacted, but on the year as a whole, we will exceed the last year's generation.
Okay, then this quarter, there is no need of any shutdown?
No, there is no need for any shutdown. Now, this quarter and next quarter, we won't require any shutdown in normal course.
Okay. Now, my second question is, you have taken 47 days shutdown for 600 MW, even though you have generated almost good unit, power unit. Only 200 million unit you have deferred from actual. So why this happened? This is a half shutdown, half--
No, this is only shutdown of only one unit of 300 MW. One unit was operating at full capacity.
Okay. You have written in pamphlet is 600 MW to mention. That's why I--
No, actually it is 300 MW unit was closed. As I told, every year we have to take shutdown of one unit for 30 days to 40 days, depending upon the condition of the unit. Generally, it is in the range of 30 days.
Okay. Thank you. Thank you very much.
Thank you very much. The next question is from the line of Tina Maheshwari from OP Equity Advisor. Please go ahead.
Hello, good afternoon. Congratulations on your result. My question is, with energy contributing over 75% of H1 EBITDA, how do you see thermal and hydropower earnings scaling up, and what generation and profitability levels are achievable in H2 FY 2027?
In case of hydro, definitely in the H2 profitability on lower side because of the seasonal conditionalities. In thermal, it will be substantially higher because of the improved market conditions as well as higher generation in the second half.
Okay. Thank you.
Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and one on your touch-tone telephone. The next question is from the line of Atharv, from an individual investor. Please go ahead.
Thanks so much, sir, for the opportunity. My question to you is, following record actual pellet production, what scope exists to increase capacity utilization further? How do you see pellet demand realizations and margins evolving in H2 FY 2027?
So far as capacity utilization is concerned, in thermal power plant, IPP thermal power plant, it will improve in the second half, as already stated. Because in the first half, capacity utilization was on lower side. In rest of the other plants, it depends in case of steel plants. Iron ore pellet, it will remain more or less in the same line. Sanchayan also, it should remain in the same line. In case of billets and wire, it will depend upon the market conditions at what price we are able to sell the power. If we are selling power at remunerative prices, there may be a lower production. If we are getting normal price of power realization, then we may have a higher production from in steel billet and wire.
Got it. Thank you, sir. Also, I had another question. My second question is, how are the realization in steel and what do you expect in few quarters?
Manish ji?
Yeah. Hello?
Can you hear me, sir? My question is on the realization in steel and what do you expect in the next quarters?
Steel, if you look at it, overall is buoyant right now, and especially the flat section is more buoyant compared to the long sections. We are hoping that in the coming quarter also, steel will remain strong and realizations will be also decent. But we are facing a severe issue in terms of the logistics cost, because of high crude prices. The next quarter is a little unpredictable, but the demand remains stronger.
Okay. Can you quantify the logistic cost?
How do I quantify the logistics cost? Because different, like all the imported coal that is coming from South Africa, the usual freights are normally around $18-$22, for a 50,000-ton vessel. Currently, the freights are close to $36, $38 in terms of bulk freight. You can imagine the increase. Coal has become a little more expensive in terms of production of steel. Coking coal has become very, very high from Australia. During this season, there is a lot of flooding that happens in Australia, due to which coking coal mines get impacted, and the prices typically in December are normally high, December, January period. There will be a little bit of a squeeze on the raw material side because of the logistics issues. But otherwise, I think the steel cycle looks to be good.
Also, I just want to add here that the mining facilities in India as well are flooded because of the heavy monsoons that we got. Because of that also, the production capacities of most of the mines are at the lowest of their phases. That is why the raw material prices have really gone high in the country because of that. This should ease out in the coming two to three months.
If you look at the prices of flat steel, they are close to INR 75,000-INR 77,000. If you look at the long product pricing in Mumbai, in some places, they are even close to INR 54,000. We have seen a significant increase in terms of pricing, but we all have to assess in the next quarters how much the squeeze will be, whether the West Asia tensions would ease, because that will ease a lot of pressure in terms of logistics.
We are meeting part of our coal requirement from our captive coal mines.
Yes, we do. We do have our own coal mines, and we do meet our own requirements, so we are somewhat isolated.
Thank you so much, sir. Congratulations on the success of H1.
Thank you.
Thank you very much. The next question is from the line of Kamlesh Bagmar from Lotus Asset Managers. Please go ahead. Mr. Kamlesh, please go ahead.
Yeah, thanks for the opportunity, sir. Sir, just one bookkeeping question. So what was the realization in the hydropower sales and the thermal power sales for SKS in this particular quarter? And going forward, where do we see our realizations? What realizations we can factor in for our assumptions?
The thermal power realization was about INR 5.30--
Okay.
--in this quarter.
Okay. With regard to hydropower, sir?
In case of hydropower, it was above INR 6.
Going forward, the way, like we are signing up our, or doing the PPA bilateral or all those things, we are going next year or in the second half, what realizations we can factor in there? Because there is so much of--
Your voice is not clear.
Yeah, the voice is quite muffled.
What realizations we can factor in for coming year? Both hydro as well as the thermal.
In the second half, prices should be much better than what we have achieved in the first quarter because the power demand scenario is much different.
And sir, in thermal, what percentage of capacity we have tied up now?
We have tied up 60% of our sellable power.
In hydro, like say, I believe Sikkim and other part is still untied.
Yeah, Sikkim is untied.
Okay. We want to--
The other hydro project. Apart from Sikkim, all the other hydro projects are tied up.
Okay, great.
Sikkim has a strategy we have, it's not tied up.
Okay, great. Thanks.
Thank you very much. The next question is from the line of Deepak Kumar, an individual investor. Please go ahead.
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No, no, it was... Even in the last investor call, I do not mention that we will be taking a shutdown.
Okay, no problem. Okay, thank you.
Thank you very much. The next question is from the line of Vivek Sharma from KNM Advisor. Please go ahead.
Hi, good evening. First of all, congratulations on the results and you have now achieved the highest H1 EBITDA figure of north of INR 1,300 crore. I wanted to ask something on the line of what are the key growth drivers that could sustain this momentum? That is one. And what would be the revenue and EBITDA growth target that you expect for entire FY 2027? Thank you.
The improved realization, particularly from the hydropower and thermal power, have been contributing factor in the improved profitability. And we expect the same to continue in the second half also. Quantification will be very difficult because situation is very dynamic on the pricing side in all the segments.
Okay, sir. Can you do over INR 2,500 crore in FY 2027 then?
We do not give any forward guidance.
Sure, sir. Okay.
That is very speculative actually, so we do not do any forward guidance on numbers.
All right. That was it from my side. Thanks so much.
Thank you very much. The next question is from the line of Priyansh Lakhotia, an individual investor. Please go ahead.
Hello, am I audible?
Yes.
Okay. My first question is, if we compare quarter-on-quarter segment-wise revenue, then revenue from steel is down by approximately INR 49 crore and power sales is down by INR 138 crore. To make apple-to-apple comparison of actual performance across these segments, I think it is necessary to exclude the impact of shutdown of the 300 MW power unit and 30 MW turbine replacement in steel. Could you please advise that how much was the loss of revenue in the power segment during Q2 that was attributed to the shutdown of this 300 MW plant? And how much loss of revenue during quarter two was attributed to turbine replacement?
Assuming that we generate 400 crore units in a year.
200 crore from one unit, one quarter. 25 crore unit, maybe about INR 130 crore-INR 140 crore of the revenue we have lost because of shutdown of the unit.
This is for the 300 MW?
Yeah, 300 MW.
Okay, so approximately INR 120 crore. And for the steel segment?
Steel segment, we have not operated billet plant and wire rod plant because we were selling power in the market. That was the reason for shortfall in the revenue.
Okay. In continuation, do you foresee any more plant shutdown in the next 12 months? If yes, then which quarter and how much capacity should be considered for these three segments across the three segments?
So far as the current year is concerned, next half year we do not foresee any shutdown in the thermal power plant.
Okay.
Next year, definitely one unit will again be shut down for 30 days in normal, 30 to 40 days whatever, depending upon the condition of the unit. For the current financial year, there is no major shutdown.
Okay, got it. My second question is, what was the average realization of power per unit in the spot market for the Sikkim hydropower project during Q1 and Q2, and what was the average realization per unit in spot market for the Sikkim hydropower during the October month?
That October figures may not be readily available, but for six months we have earned more than INR 6 a unit from Sikkim hydropower project.
More than INR 6 per unit. This was for Q1 and Q2?
Yeah, put together six months.
Okay, six months. Okay. What was the same average realization power per unit in spot market for SKS Power Thermal Plant, similarly for Q1, Q2, and October?
It was INR 5.28.
Sorry?
Hello?
Yes.
Hello. For SKS Power Project, we had earned INR 5.42 in the second quarter.
No, for the SKS Power Thermal Plant.
Yeah, yeah.
It was also INR 5, you said?
More than INR 5. In the range of INR 5.20- INR 5.50, in the range of, in between somewhere about INR 5.20- INR 5.50.
INR 5.20-INR 5.50. My final question is, what was the average realization of iron ore pellets during Q1, Q2, and during the October month?
In quarter one, it was about INR 10,000, and in the second quarter, it was slightly below, about INR 9,800 a ton.
Okay. Okay, got it. That's it from my side. Thank you.
Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and one on your touch-tone telephone. I repeat, in order to ask a question, please press star and one on your touch-tone telephone. The next question is from the line of Heena Parekh from Solvaren Capital . Please go ahead.
Hi, thank you for the opportunity. My question was on the SKS plant. With the maintenance program completed at SKS, what utilization levels and incremental generation can the 600 MW thermal power plant achieve in the coming H2 for FY 2027?
Can you repeat your question, please?
Estimated generation.
Sorry? You want me to repeat the question?
Yeah, yeah, please.
Yeah. So this is for the SKS plant. So with the maintenance program completed at SKS, what utilization levels and incremental generation can the thermal power achieve in H2?
In the first half, we have achieved 202 crore units. And for the whole year, we expect to cross 420 crore.
400 and?
420 crore for the whole year.
Okay, got it. Got it. I had one more question. What is the update on the SKS environment clearance?
Ma'am, as mentioned in my opening remarks as well, we have received TOR, terms of reference, from the MoEF, and we are expecting to get the environment clearance in this financial year.
Okay, got it. I think that's all. I mean, most of them is covered. Thanks a lot and all the very best.
Thank you.
Thank you very much. As there are no further questions, I would now like to hand the conference over to Mr. Jain for closing comments.
Thank you, everyone, for participating in today's earnings call. We closed the first half with record EBITDA, higher profitability, and progress across our strategic priorities. Energy continues to anchor our earnings. Record pellet production reflects the capabilities of our operating asset, and our entry into manganese mining strengthens our opportunity for further integration. We remain focused on executing our expansion plans while maintaining financial discipline and strong balance sheet. Thank you for your continued support. If you have any further questions, please reach out to us or our investor relations team. We look forward to speaking with you again next quarter. Have a great evening. Thank you.
Thank you very much. On behalf of Sarda Energy & Minerals, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.