Ladies and gentlemen, good day, and welcome to the Q4 and FY 2026 earnings conference call of Shyam Metalics and Energy Limited, hosted by MUFG Intime. 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 touchtone phone. I now hand the conference over to Mr. Pankaj Harlalka from Shyam Metalics. Thank you, and over to you, sir.
Thank you. Good evening, ladies and gentlemen. I, Pankaj Harlalka, Head of Investor Relations at Shyam Metalics, welcome you all to the earnings conference call to discuss Q4 and full year FY 2026 results. I hope you all had an opportunity to review our press release and the investor presentation, read along with the safe harbor statement, which are available under the investor section of our website, and the same are accessible on the BSE and NSE websites. To discuss the results today, I am joined by Mr. Brij Bhushan Agarwal, Chairman and Managing Director, Mr. Deepak Agarwal, Director of Finance and CFO, and Mr. Sumeet Khaitan from MUFG Intime, our investor relations partner. I would like to invite Brij Bhushan-ji to provide his perspective on the performance of the fourth quarter and FY 2026. Thank you, over to you, sir.
Thank you, Pankaj. Good afternoon, everyone. Welcome to Shyam Metalics and Energy Q4 FY 2026 earnings conference call. I will begin with a brief overview of the industry landscape and operating environment, both of which continue to evolve amid global and domestic development. Globally, the steel industry has remained influenced by trade-related action across the market, while the ongoing Middle East conflict has moderated demand in certain regions. These factors have contributed to a redirection of steel flow into the alternate market, resulting in the price pressure across geographic and heightened volatility in global steel prices. Turning to India, the global steel demand environment remained robust and encouraging. Demand continues to support by broad-based strength across major steel consuming sector, including infrastructure-led construction activity, manufacturing activity, urbanization, with spending on huge infra projects such as road, railways, power.
Coming to Shyam Metalics, FY 2026 has been a very significant year for us, marked by a strong project execution, strategic expansion, operational stabilization. During the year, we achieved meaningful milestone across our manufacturing facility, with key highlights including the completion of CRM complex at Jamuria and the successful commissioning of the blast furnace at our Kharagpur plant. For FY 2026, our sales volume stood at 4.94 million tons, reflecting a strong year-on-year growth of 26%. In Q4 2026, sales volume registered a growth of 22% over the same period of last year. Importantly, we maintained sales mix across product categories while continuing to optimize realization through a sharper focus on the higher value-added products. The strong volume expansion translated into healthy growth in both revenue and profitability.
For the full year FY 2026, the revenue grow by 22%, while the profitability increased by 17%. For Q4 2026, revenue rose by 27% year-on-year, while profitability growing about 42%. This performance underpinned by our integrated operation, diversified portfolio, sustained operational discipline, continuous focus on cost efficiency. We also made substantial progress on strategy growth initiatives during the quarter. Phase II operation of the CRM complex at Jamuria was successfully commissioned. We expanded our aluminum operation at Pakuria through the commissioning of downstream heat treatment process. This development has significantly and meaningfully enhanced our value addition in the downstream capability and further strengthening our integrated manufacturing platform and supporting a long-term growth aspiration. Reaffirming our commitment to a long-term growth, the board has additionally decided for a new CapEx investment of INR 2,700 crores.
This strategic investment is aimed at deepening our presence into the value-added and Specialty Steel segment, downstream stainless steel capability, and accelerating the transition towards a higher value-added product with better margins. The proposed CapEx will be primarily funded through internal accruals, reflecting our disciplined and capital-efficient approach towards value expansion. This investment remains fully aligned with our broader strategy of driving profitable growth through premiumization, downstream in-integration, and prudent capital allocation. We welcome the changing democratic and policy environment in the state of West Bengal and remain extremely optimistic about the state's next phase of industrialization and growth. As a company with deep roots in the state of West Bengal, we expect a more growth-oriented ecosystem to support faster development in the forms of infrastructure, creating new investment inflow, and will add more value to the organization.
With our continued expansion across various metals, in specialty alloy, stainless steel, aluminum, railway infrastructure, value-added products, we believe both the state and the company are well-positioned for a stronger long-term commitment. In closing, we remain firmly focused on the substantial growth, improving profitability, creating long-term value for our shareholders. We sincerely thank you for your continued support, trust, and we look forward to engaging with you in the quarters ahead. With this, now I conclude my speech, and I would request our CFO, Mr. Deepak Agarwal, to take up to the financial performance. Thank you.
Thank you, sir. Good afternoon, everyone. Thank you for joining us today for Shyam Metalics and Energy Limited's earnings call for the fourth quarter and full year ended 31st March 2026. I am Deepak Agarwal, Chief Financial Officer of the company, and I am delighted to present our financial results on behalf of the Board of Directors and the entire Shyam Metalics family. I will take you through our key financial highlights for the fourth quarter and the full year, that is 2025/2026, followed by a discussion on our capital allocation strategy, balance sheet strength, and the strategic investments we are making for our next phase of growth. Our Chairman and Managing Director, Brij Bhushan Agarwal, has already shared his vision. I will now add the financial dimension to that story. First, we will discuss about the quarter four of the current last financial year.
Ladies and gentlemen, I am proud to report that the quarter four of the last financial year has been one of our strongest quarter on record across every critical financial metric. Let me walk you through the highlights. The revenue from operations, INR 5,240 crore, 27% growth year-on-year, and 19% growth quarter-on-quarter. When we talk about the EBITDA, the company has achieved INR 756 crore. There is a growth of 33% on a year-on-year basis, and there is a growth of 40% on a quarter-on-quarter basis. When we talk about the EBITDA margin, 14.4% expanded from 13.8% from the quarter four of the last financial year and 12.2% in quarter three of the last financial year.
When we talk about the operating EBITDA, the company has achieved INR 727 crore, a growth of 41% on year-on-year basis and 49% on a quarter-on-quarter basis. As you all are aware that there is substantially is treasury is there. Therefore, our total EBITDA is INR 756 crore. The operating EBITDA margin is 13.9% versus 12.4% in Q4 of the last financial year. When we talk about the profit after tax, INR 312 crore, 14% growth on year-on-year basis and 58% growth on quarter-on-quarter basis. The PAT margin is 6% against 5.3% in Q4 of the last financial year. What makes these numbers particularly gratifying is not just the magnitude of the growth, but the quality of it.
Our margin expansion has been achieved through disciplined cost management, improvement in realization across most product categories, and a favorable shift in our product mix towards higher value-add segment. Now I will discuss the full year performance that is 2025- 2026. Therefore, the annual turnover for the whole year is INR 18,552 crore. That is 22% growth on year-on-year basis. Full year EBITDA is INR 2,537 crore. That is a growth of 21%. Full year EBITDA margin is 13.7% against 13.8% in the financial year 2025, r esulting amidst sliding input cost pressure. Full year operating margin is INR 2,333 crore. That is a 25% on year-on-year basis. The full year operating EBITDA margin is 12.6% against 12.3% in the last financial year.
The full year PAT is INR 1,061 crore, 17% growth on year-over-year basis. The full year basic EPS is INR 38.1 per share against INR 32.7 per share last financial year. Crossing the INR 8,000 crore of revenue threshold and delivering over INR 1,000 crore of PAT for the full financial year underscores the scale and earning power that Shyam Metalics has built over recent years. This is a business firing on all cylinders. Now we will discuss about the volume growth and part ton realization. The revenue growth is always most meaningful when it is accompanied by a genuine volume expansion, and that is precisely the story here. Overall, the volume grew by 22% on year-over-year basis and quarter four 2026, validating both our capacity expansion investment and our strengthened market positioning.
Let me highlight some of the most significant volume achieved during the quarter four of the current financial year. The CR Coil volume surged by approximately 200% on a year-on-year basis, reaching 50,344 tons, a testament to the ramp-up of our CRM complex at Jamuria. The Pig Iron volume grew by 200% on a year-on-year basis. That is 500,499 tons, reflecting the strongest domestic demand and our expanded product capabilities. Iron Pellet volume grew by 40% on a year-on-year basis. That is 278,341 tons, driven by operational efficiency and improved realization. The Stainless Steel volume grew by 13% year-on-year basis to 27,287 tons, continuing our premiumization journey. On per ton realization, we saw healthy improvement across most product lines.
Aluminum realization improved by 16% year-on-year basis, that is INR 407,461 per ton. Stainless Steel realization improved nearly 17% year-on-year basis. CR Coil, CR Sheet realization rose approximately 15% on year-on-year basis, that is INR 78,513 per ton. These improvements reflect both firm underlying demand and our deliberate push towards value-added and specialty products with a superior margin profile. Let me now walk through some key observations on our consolidated profit and loss account. First, revenue mix. Our Steel product segment continues to anchor the business, contributing approximately 75% of our total revenue mix in both quarter four and the full financial year. Within this, Carbon Steel remains our single largest contributor at approximately 39% of revenue, followed by Pig Iron, Iron Pellet, Specialty Alloy and Stainless Steel.
The growing contribution of sheets, steel, stainless, aluminum is deliberately strategic shift, one that is enhancing our blended margin profile. As far as cash generation, I am particularly pleased to report that our business continues to be robust cash generation. The net cash generated from operating activities for the financial year 2025 is approximately INR 2,000 crore on a consolidated basis, an improvement over the prior year, reflecting the strong earnings, working capital discipline. This cash generation capacity is what gives us the confidence to commit our next phase of capital investment. The Shyam Metalics and Energy Limited continues to maintain a strong balance sheet and healthy return profile in the financial year 2025- 2026, despite being a peak CapEx cycle.
The company reported ROCE 16% and ROE 13% in the financial year 2025/2026, reflecting a disciplined capital allocation, operational efficiency, prudent leverage management that resulted into reflection of our working capital days from 22 days to nine days. Our financial architecture is designed to support growth without compromising financial resilience. We run a fundamental conservative balance sheet, low leverage, strong operating cash flow and adequate liquidity buffer. We move into the dividends. As you all aware that the Board of Director has recommended a final dividend of INR 2.7 per equity share, representing a 27% of the face value of INR 10 each for the financial year 2025/2026. This recommendation is subject to the approval of shareholder at the ensuing Annual General Meeting.
This dividend declaration reflects our confidence in the company's financial health and our commitment to consistently reward our shareholders while simultaneously investing in long-term growth. We believe we strike the right balance between capital return and value creation. Moving to the strategic CapEx. Let me speak about the perhaps the most exciting announcement in our results. The Board has approved a phased CapEx is INR 2,700 crore for our next phase of growth. This investment comprises two major projects. One is the long specialty wire bar mill.
We will be setting up a long specialty wire mill with a furnace at Kharagpur with a capacity of 8 lakh ton at an estimated capital outlay of INR 900 crore. This project is targeting commissioning by 31st March , 2029. Second one is the stainless steel expansion and downstream facility at Sambalpur. We are expanding our stainless steel capacity to 0.6 million ton at Sambalpur, complemented by world-class downstream capability, including Cold Rolling Mill, Precision Cold Rolling Mill, Hot Rolled Annealing & Pickling Line, and a Bright Annealing Line. This estimated investment is INR 1,800 crore, with a targeting commissioning date of March 2029.
This project will be funded majorly from our internal accrual and which is also a mix of, if any debt is required, then we can take. Otherwise, it will be served through our internal accrual. Given our strong operating cash flow generation demonstrated by over INR 2,000 crore in operating cash flow in the financial year 2025, 2026 alone, we are well-positioned to fund this CapEx program while maintaining balance sheet discipline. The evolving democratic and economic environment in West Bengal presents a positive outlook for industrial growth and a long-term development. As a company with a significant manufacturing presence in the state, Shyam Metalics remains encouraged by the potential for stronger infrastructure creation, higher investments, improved industrial activity, and employment generation.
We believe this environment can further support the company's ongoing expansion plan, downstream integration initiatives, and value-added product strategy, while also contributing meaningfully to the broader economic progress of the state. We now look forward to taking your question- and- answer. 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 my press tar and two. Participants are requested to use handsets while asking a question. Ladies and gentleman, we will for a moment while the question queue assembles. The first question is from the line of Amit Dixit from Goldman Sachs. Please go ahead.
Yeah. Hi. Good evening, sir, congratulations for a great set of numbers. Thanks for the opportunity. Couple of questions from my side. The first one is on the volume growth. Last year, volume growth was quite splendid, particularly your value-added products, driven by CR Coil. Now this year, what are the key elements of volume growth? Also, if you could highlight the major capacities that would get commissioned in the course of the year, that would be great. That is my first question.
First of all, as in volume growth, we are expecting 500,000 ton of iron making facility from the DRI side is going to be commissioned this year, which will also have an effect on the power generation, waste heat recovery, and we expect the power generation will also go up. From the Steel side, there will be a substantial growth in the billet manufacturing facilities. What we have commissioned now, we'll see a growth in the billet as well, and there will be a partial growth in our final product like structured TMT with the upgradation and some more feeding of raw material into the Steel segment. In CRM complex, since we are going to commission the Galvalume line within this month end or maybe early next month.
We'll see there will be a substantial volume growth in the flat product, in the Galvalume, as well as in the color-coated. We expect that color-coated is going to be having almost the double volume what we saw in this year, last year. Apart from that, there will be a substantial value we will see from the cost side also because there will be a lot of new power plants coming up, which is going to be commissioned as well. Whatever little power we are buying from the grid, we'll see there will be a positive effect on the cost side of the power. I think majorly, apart from this, aluminum plant also will be commissioned this year. We have set up a new caster with foil stock and foil plant.
We'll see this year the plant will get commissioned, and slowly it will be stabilized. There will be a lot of action this year.
Great, sir. Wonderful. That's very well explained. The second question I had was on, you know, actually aluminum. Now, we have seen aluminum prices remaining very, you know, robust worldwide. For us, since, you know, we are actually converters, how do you see margins? Is it like a passthrough for us or we get some incrementally higher margins on the elevated aluminum price?
I think we should see as a pass-through, you know. Maybe because of little bit more advantage we get because the working capital involvement and the kind of integration, what we are doing from the backward to the forward, we'll see a lot of value coming up. Now we are buying the foil stock. Once we make our own foil stock, we'll see the margin also increasing. Related to your aluminum price, we should not be very, very much worried. Whether we are going with a backward integration where we will have a better margins and also, you know, with the prices of the aluminum is concerned, it is going to be almost pass-through.
Okay. Great to know. Just one last question, if I may. I just wanted to get an idea on the CapEx for this year and next one, if you can.
We have declared a CapEx, like in Ramsarup, we commissioned a blast furnace. Now we are planning to set up a SMS shop and the steel plant, which is going to be of little less than 1 million ton to be both prescribed 800,000 tons. The plant is expected to be commissioned by end of next year, this will have a substantial CapEx setting up the plant. Since it is now a brownfield project, we will be very efficiently we'll be able to do this CapEx. Like we have announced INR 2,700 crores CapEx in this stainless steel downstream activity as well. Where we are seeing, you know, comprising of Ramsarup and stainless steel and all. All this CapEx is going to be spread in next two and a half years.
Apart from that, we are setting up a flat product HR plant. To set up a 2 million ton of HR plant, it generally costs close to INR 16,000 crore-INR 18,000 crore. In our case, only from the HR side, we are almost, you know, 1/3 CapEx what we have declared because we have all the brownfield facilities. We have all forward and backward integration is already integrated. There's nothing to worry. We have a substantial treasury. We are doing a good EBITDA. Year by year we are seeing that, you know, there has been a substantial increase on the numbers and all. As on date it's looking very comfortable.
In case we find there is some kind of a shortfall and all too, we are almost a debt-free company, so finding some kind of a short-term debt is not going to be an issue. As on date, I don't see that will be a problem till we take some more project ahead. Thank you.
Great to hear. [crosstalk].
Thank you, sir. Amit Dixit.
Yeah, let him ask. I think he was having one more question. Please Amit, please carry on.
The one more question I had was on the stainless steel. Now, if I look at the EBITDA per ton of stainless steel, I know it's not great to look at it from a quarter-on-quarter basis, but one of your peers had reported and their EBITDA per ton actually grew quarter-on-quarter. Now, in our case, we have seen a slight contraction in EBITDA per ton. Just wanted to understand whether it is, you know, EBITDA per ton contraction associated with some cost during the ramp-up phase or something, or how do we see margins going ahead? Because stainless steel prices have risen, and one of your peers have given a very optimistic guidance for FY 2027.
First of all, they are into the flat product, we are into a long product. This was a very old plant which was taken in the NCLT through NCLT few years before. We are here, we are almost making, you know, all the stainless steel from the scrap. Right now our new facility of stainless steel which is coming up in our Odisha plant, we have a complete integration, like 80% of the raw material is what we are going to feed from our existing plant. We are getting into a very higher value-added product. We will have a blend of long product and flat product. Yes, it's a time to come with our power cost of less than INR 2 where we are in Indore, we are paying more than INR 6 or INR 7. We are buying scrap.
It's not that big mega-sized project and all. Definitely it will have a very positive impactful, you know, differences when we commission our Odisha stainless steel plant.
Okay. Great, sir. Thank you and all the best.
Thank you.
Thank you. The next question is from Shaleen Kumar from UBS India. Please go ahead.
Yeah, hello.
Hi, Shaleen .
Yes, sir. Hi, sir. Congratulations on a very good set of numbers to both Bhushan Ji and Deepak Ji. Sir, a bunch of questions. The new CapEx which you have announced on the asset side both. What is the end industry are we targeting in both the cases?
The, uh—
Wire and-
—stainless steel basically. Yeah, yeah, we are targeting the pipes and tube market, decorative market of pipes and tubes. There is a specialty pipe market also, which is for the precision pipe and all. Some portion is on the decorative side of aluminum, stainless steel, what is used in the elevators and all. You know, all these are the decorative part. Apart from that, you know, some special category will be catered to the utensils market also, and some in the export different side also.
Got it, sir. The two question arises here. one, what kind of a profitability or return ratios on those CapEx you are seeing? It seems like these are value-added product. Second, these will be little different from the our current channel sales. Is that the right assumption? How are you planning to do the sales here or, you know, how you want to target the customer set?
This is a B2B market—
Yes, sir.
—presently.
All the tube manufacturers in country and outside the country, there's a big market for the stainless steel pipe. We'll be serving to these kind of a customers in the Tube and Pipe segment because we are not thinking to get into a stainless steel tube and pipe because it is a very small business and not a very scalable or a big volume where we need to attract ourselves.
Apart from that, it's a very open market. India is growing and there's a good demand. We are seeing that more and more decorative and being one of a very cheap product, you know, it's not very expensive on the decorative segment. We are seeing in interiors and everywhere around, the stainless steel penetration is increasing. We'll be able to build up more and more penetration in this category.
Got it, sir. Any sense on what kind of a EBITDA per ton, or a return ratios you're looking for this kind of investments?
EBITDA, generally, you know, this is a very interesting business. I would say generally, it, flounder from around INR 15,000-INR 20,000 of EBITDA .
Our overall calculation is in the range of INR 12,000-INR 15,000. It's fetching more in this segment because if you are making everything from the iron ore to the final steel, the EBITDA should be more than INR 80,000. It's going to be interesting product. Apart from that, 80% of the ingredient you are using from your existing product, you know, the steel, the specialty alloy, ferro alloy, power is yours.
It's a brown field. It's nothing where you are building up a raw material inventory within your capital cycle. The yield of the capital is going to be definitely better. It's also going to create more sustainability with this kind of a business if we enter. You know, there's going to be a lot of potential in the near time to, you know, expand and to invest more precious money in the value added and more sustainable.
Got it, sir. Got it. Fair enough, sir. Bhushan ji, one more thing. In this quarter, we can see, you know, there is a clear uptick in the realization for most of our segments. I just want to pick your view here because we have a lull for quite some time or, you know, there's been a softness in the realization. Do you think there is still room for this realization to move up from here for most of your products? Do you think then they will be stable or you see that, you know, there's a risk for the given the global scenario and all? How.
No, I think, there is no chance to go above at from this level because, you know, now we are entering into a Monsoon Session. Apart from that, I think the market is pretty good. We have the EBITDA is close to 14%. Overall, you know. I think it's a very decent. Might be 1% here or there, it doesn't matter.
For us, if you really ask me, market is in nobody's control. We are more focused on our efficiency and cost. To be more optimistic and realistic, I would say, the business will remain stronger because today still we are, you know, fenced by the geopolitical issue. There's lot of restrictions on the logistics side, export market. There's a lot of spending is going to come globally. Earlier, none of the countries used to spend, you know, on the development side and all. With the new revolution and new age, what I see with this multiple war crisis and all, I see India is going to have a good say, in the international participation.
The metal company in India will grow domestically with the internal demand and also will have an edge and, you know, the opportunity to participate internationally also in a very big way.
Fair enough, sir. Definitely. I think there's a change in political atmosphere in West Bengal as well. I hope that that also favors us. One more bit, sir. Like if I look at the quarter EBITDA, it's very good. If I analyze it, we will be, you know, it's like we are crossing more than INR 2,800 crores. How should we think about it? One leg is this, where we have already achieved this number. There are incremental things which are happening. For example, when I was looking at your presentation. The second phase of CRM has only started in April. I think it was not a contributor. If my assumption is right, it was not a contributor in the fourth quarter, so the benefit should come in FY 2027.
As per your presentation, you should be finishing your Phase II of aluminum, right, within FY 2027. Some benefit of that should come. If I put all these things together, can we look or expect a EBITDA of more than INR 3,000 crore for FY 2027?
Shaleen, when I told you last time I remember, I was always speaking close to INR 1,800 crore-INR 2,000 crore EBITDA for this year.
Yes.
Fortunately, we landed into INR 2,400, INR 2,500, including other income. On this realistic term, it was on the operation was close to INR 2,300 plus, correct?
Yes.
I would be little bit more conservative, you know. Like, I don't want to say because, you know, for us, I've been always very conservative and prudent on my say, on my project and on my targets and all.
Sir, what's wrong with my assumption here if I simply say that, I understand your—
No, you're not wrong, but maybe nearby, maybe plus or maybe 5% here and there, I expect, you know. You're not wrong. You're right.
Any chance if we can, if we can get from you or Deepakji, if not now, even later is helpful, what kind of a EBITDA contribution you're expecting from this CRM and aluminum plant in FY 2027 that can help us, like, have some set of, you know, contribution from them. Is it possible to share with us now?
Definitely, I think, CRM EBITDA is going to be close to INR 10,000-INR 11,000 per ton this year. The aluminum EBITDA, I think should remain between INR 35,000-INR 40,000.
But sir—
This year, you know, please.
The timeline of aluminum, because it's still in the commission, can we expect it to happen in first half of FY 2027?
First half we will be starting commissioning and all, so we'll start seeing the effect in the second half.
Okay.
More better from —because, you know, the, all these high-tech plant, it takes time.
It's a greenfield project for the new foil plant and all that stuff. This will take time, but yes, definitely it will have more and more positive impact time to time, with the quarter to quarter.
Just last bit. Then I join back the queue. On the Battery Foil, our product has qualified with the customers?
Yeah, yeah. We are all done.
I'm not sure if you will like to, but would you like to share the name of the customers?
We have done this, you know, there's a non-disclosure agreement.
Sure.
Still, you know, we had been qualified long back. Once we see a battery line coming up, middle of this year and all, we will be penetrating in the Battery Foil.
There will be more than one customer?
Sorry?
There will be more than one customer?
Two to three customers are there.
Two to three customers are there. Got it.
Shaleen-ji, in addition to this, as far as future guidance for EBITDA, the sir is always be in a very conservative. You can see in our financial with the commissioning of aluminum, with the commissioning of CRM, with the commissioning of 0.5 million tons of sponge iron with the commissioning of blast furnace as well in the last financial year. The full year impact will come up in this financial year. definitely we will be achieve whatever we have achieved in last financial year. sir will always say on a very conservative side because he always believe only in the committing less, delivering more. We following only this policy.
Fair enough. Do we have time?
I think this year, you know, we will be very comfortable with our growth close to 30%, you know, over this year.
Over the last two years, very comfortably. Yeah, yeah.
Yeah. I can, l ike if all your project execute if the realization doesn't really hurt, I don't think so any reason that why we should not have a 30% net profit growth, operating profit growth.
Yes. Shyam will always believe on the volume growth. Shyam will never depend on the realization side. If you look into our last four quarter financials, you will find we will be always giving the sustainable EBITDA, sustainable volume growth is there over a period of time.
Fair answer. Good sir. Thank you so much. I'll join back the queue. Thank you.
Thank you.
Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the queue. We have next question from Ashish Kejriwal from Nuvama Wealth Management. Please go ahead.
Hi. Thanks for the opportunity and, sir, many congratulations again for good set of numbers and delighted to hear about your midterm growth plans. Thank you so much for that.
Thank you, Ashish. I hope we are keeping you happy with all your questions all the time and delivering it.
Yes, sir. So far it's going good. Sir, I have two questions. In fact, if I look at our inventory as well as payable days, that has increased significantly in this quarter or maybe in this year. Is there any change in the strategy? I understand that maybe, you know, we may have booked some other, some higher iron ore or coal in order to take advantage of lower prices earlier, which could have increased our inventory days. Is it so? What about the payable days, why it has increased? Any change in the business strategy on that front? That's my first question.
No, no. I can take you these questions. As far as sharply increasing the inventory, only because of if you look into the last year financials, there were no commissioning of blast furnace, there were no commissioning of CRM. One factor is we are positioning the raw material of CRM as well as the blast furnace coking coals and something else. In addition to this, also we are taking the positioning of iron ore, iron making raw materials. That is if you look into our financials also, our inventory level in the last quarter was 99 days. Now we are taking the positioning of 123 days of inventory days. This is the only reason for increasing our inventory.
Okay. We have taken higher than what is warranted as of now, and it will be liquidated in first or second quarter. Am I right in saying?
Correct.
Okay.
Correct.
What about payable days, sir?
Payable day is approximately like 130 days, 13 0 .
Yeah. It has increased significantly from our normal scenario. Is this a one-off type?
No, this is not a one-off. We have a very great credential. Our credential is there. We whatever we are procuring, most of the raw materials are purchased on a credit basis. If you look into our cash conversion ratio is very, very good.
Okay. That's great actually. It's more of a working capital financing and if we are effectively doing it, nothing. This is not a one-off, it can sustain for longer.
Correct. Correct.
Okay, great. Second question is, sir, in terms of cost of or cost of steel making in fourth quarter, what kind of cost increase we have witnessed? If I look at the price hike and EBITDA per ton, it's almost half. Like, you know, steel EBITDA per ton increased by roughly around INR 2,600 per ton and price increase is something like INR 5,100. You know, what kind of price increase we have witnessed in fourth quarter which led to lower, you know, EBITDA per ton compared to the price hikes?
I'm not clear, Ashish. Can you just repeat once again, please?
Sir, if I'm comparing fourth quarter EBITDA per ton of steel versus third quarter, we are seeing that EBITDA per ton increased by roughly around INR 2,600. Whereas the price increase in the carbon steel is around INR 5,100. You know, roughly around INR 2,500 cost increase could be there. I was just trying to get a sense of where this cost increase we have witnessed whether it's in.
There must be—w e will not be very appropriate in answering your question. Overall I can say because when you are into such a big ecosystem, you have your bookings, you have your pre-advanced booking for more than two months, three months in the system, and there are some deliveries which has to happen. There must be a lot of old carryover of a lesser price which may be affecting an average outing and, but may be one of the reason. There cannot be any other reason because whatever the market is, this is a very open price.
If the EBITDA per ton is to be the price which has gone up by some co-cost effect must be there because of cost is increasing because of the vessel rates and all your import prices, your limestone, everything is going up. There must be some kind of a cost pressure also. No, this is basically the restatement of import, the fluctuation loss, the dollar weakness, rupee weakness, that will be the impact of this cost side also.
Is it possible to quantify that, sir?
That we can share you.
Okay.
It will—
I can talk to you later on, sir, on this one.
Yeah, yeah.
Okay, that's great. All the best, sir, for your future plans. That's really amazing to see that. Thank you so much.
Thank you.
Thank you. The next question is from Satyadeep Jain from Ambit Capital. Please go ahead.
Hi. Thank you. First, just a follow-up to Amit's question earlier. What you put together different moving parts in terms of CapEx, what exactly can you guide to what kind of CapEx can we look at in FY 2027 specifically?
Deepak, will you answer?
Yeah, yeah, yeah, no, no. Yeah, yeah. As far as commissioning of CapEx in this financial year, as our share is already shared the 0.5 million tons of expander and we will be commissioning.
No, no. They are talking about the value CapEx, not the how much money we are getting capitalized.
Not the capitalization. Not the cap. Yeah.
As far as the total CapEx is required to be incurred is around INR 10,000 crore. This financial year we will be incurring around INR 2,900 crore from this financial year and INR 3,000 crore in the next financial year, balance will be the next two financial year.
Okay, thank you. On that, sir, just generally wanted to understand the thought process last few years. The intent was to remain net cash as, depending on different moving parts of the earnings, there may be a requirement to take on short-term debt, as you mentioned. Is the company now more comfortable with debt with this size? What's the thought process on capital structure, as you look at all these CapEx? Just wanted to understand the thought process.
No, very comfortable. We had been very, very mature in last 25 years. All these things we had been handling very prudent. All these CapEx, what we plan is in our cash flows, the net cash, because, you know, we don't have any kind of a major debt. There's no interest. Whatever net cash if you see last year, on this we must have made close to around INR 80, INR 90, INR 100 crores net cash in the company. Because there's hardly any interest cost, and I think it's more than INR 2,000 crores. This year also we expect that we will have a substantial cash. When you do a CapEx, you know, you have long-term plans, you know. When you buy machines and all, you get lot of time credits and all. I think we are very comfortable as of now. Nothing to worry. Yeah.
As far as in addition to that—
Sorry.
Hello. Hello. In addition to this also, I would like to add one more thing. As far as debt is concerned, in our system, we have a debt policy in the system is also there. Our debt will not cross at any point, 0.5x to the total equity in any point of circumstances. We will follow this debt policy. If you look into our financials, our sustained cash generation over a period of time will come up around INR 2,000 crore to INR 2,500 crore, and we can easily meet whatever be our CapEx program in next three to four years.
Okay. Thank you for that, sir. Secondly, on West Bengal. You mentioned there is optimism around improvement in infrastructure and all. Just on your Jamuria location after the HSM, the new CapEx that you built, what kind of optionality is there just in terms of land package between Jamuria, Sambalpur? My understanding was that after this CapEx, the land availability might be somewhat limited, but correct me if I'm wrong. What are the plans for expansion in West Bengal to capitalize in case you're looking at that optimism in activity there?
Satyadeep, for next three, four years, we don't have to worry. We are also in the process of procuring more land adjoining our plant because I don't see any problem as on date. For next —we have a clear window for next three, four years, like there is no issue of any land. Some parcels and all we are already in the process of acquiring. Looks everything good, yeah.
Okay. Thank you so much.
Thank you. The next question is from Mr. Vikash Singh from ICICI Securities. Please go ahead.
Hi, sir. Good afternoon, and thank you for the opportunity. Sir, my one question only on the stainless steel CapEx. Given the current circumstances when the government duty protection is more towards the steel, expanding into the stainless steel where usually the Quality Control Orders had not been there. Just wanted to understand, you know, why we have been putting still emphasis on the stainless steel could have been delayed or the ROE or ROC of stainless steel versus steel, how is it sitting right now?
The carbon steel prices is close to $800, you know, if you talk. The stainless steel prices are close to, on an average, $120, $130. I mean to say, you know, $1,200, $1,300. In our case, more than 80% raw material for making stainless steel are downstream. We are doing a carbon steel development also. We are putting up an HR coil plant, and we are also developing in the stainless steel market because the EBITDA in the stainless steel is better than the carbon steel because it is more niche, it is more expensive. Also we have an advantage that we are doing a forward integration, and it also help us to for a proper capital utilization because the working capital load is very less.
For a general people, if they want to stainless steel, they have to buy scrap, they have to put an inventory of three, four months, a lot of issues are there. In our case, we have an advantage. We are also developing into a new metal where we see that in the time to come, we should be able to position more stronger. We started with a small acquisition in the stainless steel. Right now we are doing a run rate of around INR 130, INR 140 crores every month in last two and a half years. Now we are thinking of doing a run rate of close to INR 300 crores in next three years every month. The business is different, but we have lot of advantage. We have our own power, we have our own alloy.
What we are doing, we are just doing a value addition. For me, it is a new business also, and we are doing a value addition in our existing business also. Strategically, we are very different as a standalone industry or our integration, if you see in the stainless steel business.
In terms of ROCEs or return ratios, at current price point, how both steel and stainless steel stacked up for you?
Very difficult question. At what hour you are asking me this question, the hour changes. Anyway, it is always a better. I would say in comparison with the capital, it will have an edge of around more than 20%, 30% over the carbon steel, always. Because it is a limited edition. The challenges are more. And it is a niche market. It is not a commodity product. It is a niche product.
Noted, sir. That's all from my side, and all the best for you.
Thank you, sir. The next question is from Mr. Rajesh Majumdar from 360 ONE. Capital. Please go ahead.
Sir, just one question from my side. What is the status of the ED case on the coal, which you mentioned in the note because this is dated 15th April , so we are in almost mid-May now. Has it been resolved or is there any other thing on this matter?
There is absolutely not to worry because there's nothing. They have given some letter, we are replying. It's nothing to be worried of because there's nothing which is, you know, of an evidence or, you know, something on the statement they have given a notice. That statement will not stand because it has been applied to almost major steel industry in the city. We are one of them. Being one of the popular steel industry, we are on the highlight. We don't have to worry.
Just to follow up with the political change now established, this will be.
Yeah. Look, I can't answer all these. I can't answer all these, your questions. You should meet me separately and take the answers. It's not good.
Sure, sir.
Yeah.
Thank you.
Thank you. The next question is from Tanuj Nangalia from SKP Securities Limited. Please go ahead.
Good evening, everyone. Congratulations to the management on a strong set of numbers for FY 2026. My first question is on the stainless side. Nickel is up nearly 20% since December on the international supply cuts. Do we see any challenges in the nickel sourcing going forward? Is the cost increase something we can fully pass through to the customers?
See, nickel is always going to be a challenge. Nickel in the stainless steel always going to be a challenge. It is not going to be an easy affair. In our portfolio of our product, more than 70% or close to 75%, our stainless is majorly without nickel. You know, we are focusing on the grade which has a minimalistic or no nickel. 20%, 25% to cater the complete basket, we have to have a nickel. We have to import the nickel from Indonesia. Also we have to import the scrap which has a high content of nickel. Yes, it is generally, you know, in most of the time, you know, it is passed on. Whatever the nickel price goes up, the stainless steel price goes up.
There's always a carryover of your inventory plus and minus, which is a regular transitional process which everybody has to abide by.
Okay, sir. Got that. Sir, next question is on the aluminum business side. Is there any decrease in the export order booking due to the ongoing geopolitical conflict? Are we able to service the—
We are oversold. We are oversold.
Okay.
We are not able to supply to the international market. That's it. Yeah.
Okay. Also with the rupee depreciating, do we see there is a margin tailwind given in the aluminum side, the export business?
These are all temporary. Everybody knows, you know, India is a dominating market. They have a special supplies and all. Whatever is there, it is all passed on plus or minus. Maybe periodically one or two months it matters, but the consumer, they take up the price, they take up the hit because once people have to use aluminum, there is no substitute. It is like general other industries, yeah.
Okay. Thank you so much, sir.
Thank you. The next question is from [Harshawardhan ] from Unifi Capital Private Limited. Please go ahead, Mr. [Harsh].
Hi. Good evening. Thanks for the opportunity. Just one question from my side on the Central Pollution Control Board, you know, what came out in terms of the observations. Can you explain what was the non-compliance?
No, no. There was some kind of, you know, the error which was identified by the board inspection, which was resumed in four, five days. We have taken all the action. In the time to come, we will take it more seriously and see how best we can deliver. Yeah.
Within this three months time period, do you believe you will be able to fully address and comply with the board observations were given?
Yeah. Not a problem.
All right, sir. Yeah. Thanks.
Thank you. The next question is from Preet Jain from Niveshaay . Please go ahead.
Sir, my question is being covered. Thanks for the opportunity, but it has been already covered.
Thank you.
Thank you. I have my flight to catch.
Thank you, sir.
Can you make some other way-
Yeah, this was the last question, sir.
Yeah, yeah. Yeah. Okay.
Good. Thank you. As there are no further questions from the participants, I now hand the conference over to management for closing comments.
Thank you. On behalf of Shyam Metalics and Energy Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.