Sambhv Steel Reports Record FY26, Unveils Rs 930 Cr Expansion Drive

Sambhv Steel Tubes Ltd has announced a landmark fiscal year 2026, reporting a remarkable 147% year-on-year growth in consolidated Profit After Tax (PAT) and a 60% surge in consolidated revenue. Sales volume for the fiscal year increased by 37%.

Record Performance and Ambitious Expansion Plans

The company detailed its FY26 financial results, showcasing substantial growth. Profit After Tax (PAT) grew by an impressive 147%, while revenue increased by 60%, supported by a 37% rise in sales volume.

Sambhv Steel is advancing ambitious expansion plans. Its greenfield projects at Kesda and Kuthrel-2 are progressing, with Phase 1 — a 3,60,000-ton stainless steel capacity project — expected by the fourth quarter of fiscal year 2027. The total capital expenditure for this Kesda Phase 1 project is INR 930 crore, of which INR 300 crore has already been invested.

Further brownfield expansions include doubling the Cold Rolled (CR) coil capacity to 1,16,000 tons per annum (TPA) and increasing Electric Resistance Welded (ERW) pipe capacity by 1.5 lakh TPA to 5,00,000 TPA. A 30 MW captive power plant, requiring INR 150 crore, is also being established to enhance energy self-sufficiency.

Strategic Growth and Market Ambitions

This significant expansion underscores Sambhv Steel's strategy to scale operations and capture greater market share, particularly in the higher-margin stainless steel segment. The company has outlined a long-term vision to achieve a total capacity of 2 million tons by 2030. This includes specific targets for Mild Steel (MS) pipes/tubes, stainless steel, and coated steel, with aspirations for a 10-12% market share in both MS and stainless steel segments.

Enhanced Capabilities and Future Outlook

Shareholders can expect substantially increased production capacities across key product lines. The company's investment in captive power plants aims to improve energy self-sufficiency, potentially reducing operational costs. A clear roadmap is set for fiscal years 2027 and beyond, featuring targeted volume growth and a strategic vision for considerable market share by 2030. For its standalone operations in FY27, the company projects volume growth between 10% and 15% compared to FY26 levels.

Key Risks and Financial Management

Management has indicated that the current working capital cycle of 17 days is an anomaly. They anticipate this cycle may extend to between 25 and 30 days by 2028, a trend expected as the business mix shifts towards stainless steel.

Long-term debt is projected to increase significantly to finance the ambitious 2030 expansion plans. Careful financial management will be essential to keep debt within the guided financial metrics, aiming for debt to remain at or below 1.5 times Net Worth or 1.5 times forward EBITDA on a standalone basis. For the first quarter of FY27, the company guides for standalone EBITDA per ton in the range of INR 7,500 to INR 8,000.

Competitive Landscape

Sambhv Steel operates within competitive market segments. Key competitors include APL Apollo Tubes Ltd., known for its scale and innovation in steel pipes, and Jindal Stainless Ltd., a leading player in the stainless steel market Sambhv Steel aims to penetrate.

Investor Focus and Next Steps

Investors will likely focus on the following key developments:

• The successful execution and timely completion of the Kesda Phase 1 greenfield project, scheduled for Q4 FY27.
• Management's approach to managing rising debt levels, ensuring they remain within stated financial covenants.
• The realization of projected EBITDA per ton figures in a competitive market.
• Observed trends in the working capital cycle as the company's product mix evolves.
• Actual volume growth performance against the projected 10-15% target for FY27.