Vardhman Special Steels Q2 FY27 Earnings Call Transcript Released
Vardhman Special Steels released its Q2 FY27 earnings call transcript. The company reported record sales and a 50% increase in EBITDA and PAT year-on-year. Key developments include progress on a new steel plant, expected completion by September 2029, and a forging plant by March 2028. Project costs are revised upwards, exceeding ₹2,000 crore. The company is considering suspending dividends for 3-4 years and is expanding its solar capacity.
The announcement includes details on significant capex plans, project timelines, revised cost estimates, potential dividend suspension, and expansion into new business areas, all of which are material to investors and the company's future performance.
The company reported record sales, significant year-on-year growth in revenue, EBITDA, and PAT, and discussed positive developments regarding new projects and capacity expansions. Positive outlook on demand and operational efficiencies contribute to the positive sentiment.
Vardhman Special Steels Limited has released the transcript of its Q2 FY27 earnings conference call, which was held on October 28, 2026. The call featured discussions on the company's business and financial performance for the second quarter of the fiscal year.
Key highlights from the call included record sales for the quarter, driven by strong demand, partly attributed to GST cuts on two-wheelers and smaller vehicles, as well as robust SUV sales. The company also noted an increase in demand from the non-automotive sector. Management discussed the ongoing progress of their new steel plant, with equipment finalized and environmental approval expected by December 2026. The project is on track for completion by September 2029 and stabilization by March 2030.
Expansion plans for the solar plant by an additional 22.5 megawatts are underway. The forging plant is expected to be operational by March 2028. Regarding the financing structure for the new plant, the company is considering a 1:1 debt-to-equity ratio, which would involve lower equity raising and a higher debt component. A rights issue is planned for the latter half of the next calendar year. The project cost is anticipated to exceed the initially envisaged ₹2,000 crore due to increased land and equipment costs, a depreciated rupee, higher sea freight, and rising commodity prices. The company is also reconfiguring the project to better serve non-automotive parts and exploring an increase in production capacity beyond 500,000 tons to 700,000 tons in the second phase.
Management is examining the suspension of dividends for 3-4 years, with a decision to be made by the Board in April. The company has received approval from a European OEM, and mass manufacturing has commenced, with sales expected to begin in January. The new NDT line is slated for commissioning by December, and the new peeling line by early November. The company has applied for an increase in melting capacity to 360,000 tons.
Financially, total sales for the quarter increased by 27% year-on-year, with revenue from operations up by 39%. EBITDA and PAT saw a rise of approximately 50%. This improvement is attributed to robust demand, operational efficiencies from recent capex, and the solar plant's performance. The EBITDA per ton is currently at the higher end of the company's guidance range of ₹9,000 to ₹12,000.
Discussions also covered volume growth, which is expected to be at the higher end of the initial forecast, with sales projected at around 260,000 tons for the year. Average realizations are expected to continue at a similar pace, with potential price increases anticipated for the third quarter. The company clarified that borrowing figures include a reclassification due to Ind AS changes, and overall debt and creditors have not increased. The brownfield expansion for melting capacity from 300 to 360 KTPA, if approved, would require approximately ₹100-115 crore and take about a year to implement after approval, including a necessary shutdown. The company is also focusing on expanding into non-automotive segments like tool and die steels, oil and gas, and railways, with significant volume growth expected once the new plant is operational.
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Vardhman Special Steels Limited filed this with the NSE as a statutory disclosure, categorised under concall transcript released. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by Vardhman Special Steels Limited. Read the original for the full detail.