Gallantt Ispat Q2 FY27 Results: Revenue Rises as Operational Challenges Pressure Margins

Revenue stood at INR 1,146 crores, while Profit After Tax (PAT) was reported at INR 61 crores for the quarter.

Reader Takeaway: Improved utilization at Kutch and capacity expansions at Gorakhpur drive growth, offset by temporary operational shutdown costs.

What just happened

Gallantt Ispat reported a steady revenue of INR 1,146 crores for the second quarter of FY27, representing a 13% increase compared to the previous year. However, profitability saw a contraction, with EBITDA at INR 111 crores and a 9.64% margin, down from the previous quarter's INR 185 crores (16.19% margin). PAT for the period was INR 61 crores.

Why this matters

The margin compression was primarily driven by non-recurring operational events. A planned shutdown at the Gorakhpur plant—designed to increase capacity from 1 million to 1.23 million tons—faced an unexpected extension due to a turbine issue, which spiked power costs. Additionally, the company dealt with higher coal and freight expenses alongside a temporary timing mismatch in realizing finished product price hikes.

Strategic Developments

The company is aggressively moving toward backward integration to stabilize input costs. In August 2026, Gallantt Ispat was awarded a coal block in Singrauli, which is expected to reduce reliance on imported coal in the medium term. Furthermore, iron ore exploration is underway with a target for FY28 operations, which management expects to boost EBITDA by roughly INR 2,000 per ton. On the energy front, solar power projects in Siddhpur and Prayagraj are slated to save the company INR 30-40 crores annually in power costs once fully operational.

What changes now

Management has signaled that the bulk of the heavy operational shutdowns are now behind them. The expanded Gorakhpur capacity is on track to be fully operational by November 2026. The company remains committed to funding its INR 3,000 crore capital expenditure program entirely through internal accruals, maintaining a debt-free status regarding term loans.

Risks to watch

Investors should closely track the ramp-up of the expanded Gorakhpur facility; management is targeting 85-90% utilization by December 2026. Execution risk remains for the multi-year iron ore and coal block projects, where regulatory and due diligence milestones are critical.

What to track next

Watch for the updated medium-term growth strategy, which is scheduled for release in Q4 FY27, along with the progress on the remaining INR 500 crores of capex planned for the remainder of the fiscal year.