Scoda Tubes FY26 Profit Rises 22% Amidst Operational Challenges

Scoda Tubes Limited announced its financial results for the fiscal year ended March 31, 2026 (FY26). Profit After Tax (PAT) for FY26 grew by 22% year-on-year to ₹38.8 crore. Revenue from operations for the full fiscal year stood at ₹518.7 crore. The company also holds an order book of ₹175 crore.

Reader Takeaway: FY26 PAT grew 22% YoY, but Q4 was hit by gas shortages and plant shutdown.

What just happened

For the full fiscal year 2026, Scoda Tubes reported revenue from operations at ₹518.7 crore and EBITDA of ₹76.2 crore, translating to a margin of 14.7%. Profit After Tax (PAT) for FY26 was ₹38.8 crore, with a PAT margin of 7.5%. The company highlighted a 22% year-on-year growth in PAT for the fiscal year.

However, the fourth quarter (Q4 FY26) saw a decline in PAT by 7% year-on-year to ₹6.3 crore. This was attributed to a plant shutdown lasting 15-17 days in March due to gas (PNG) shortages, which led to fixed cost under-absorption and a 40% impact on production volumes during that period.

Why this matters

Despite the Q4 operational disruptions, the full-year PAT growth indicates resilience. The company is transitioning to become a diversified stainless steel player, moving beyond its single-segment seamless focus. Management's confidence is reflected in the guidance for FY27, projecting 25% revenue growth and maintaining EBITDA margins between 14-15%. This signals a recovery and expansion outlook.

The backstory

In FY25, Scoda Tubes had an EBITDA margin of 16.1%. The dip to 14.7% in FY26, according to management, is due to under-absorbed fixed costs as new capacity is commissioned. Receivables have also increased across the industry due to supply chain disruptions and longer payment cycles.

What changes now

Scoda Tubes is embarking on a significant capacity expansion. Plans include adding 20,000 MT/annum of seamless capacity and increasing welded capacity to 21,150 MT by H1 FY28, involving an investment of approximately ₹45 crore for FY27 capex. This expansion aims to cater to growth sectors like data centers, HVAC, and power.

Risks to watch

Key concerns include the impact of ongoing geopolitical risks on energy prices and logistics, leading to container shortages and margin pressure. The company expects peak debt to rise to around ₹250 crore in FY27 to fund its capital expenditure. Inventory days are currently high at 217, with a target to reduce this to 160-170 days in FY27.

Peer comparison

While specific peer margin data was not provided in the filing, management noted that the FY26 EBITDA margin dip is a temporary outcome of new capacity coming online and fixed cost under-absorption. The company aims to bring margins back into the 14-15% range as guided for FY27.

Context metrics (time-bound)

• FY26 Revenue: ₹518.7 crore
• FY26 EBITDA: ₹76.2 crore (14.7% margin)
• FY26 PAT: ₹38.8 crore (7.5% margin)
• Q4 FY26 Revenue: ₹123.6 crore
• Q4 FY26 EBITDA: ₹16.7 crore (13.5% margin)
• Q4 FY26 PAT: ₹6.3 crore (5.1% margin)
• Current Order Book: ₹175 crore
• FY27 Revenue Growth Guidance: 25%
• FY27 EBITDA Margin Guidance: 14-15%
• FY27 Capex: ~₹45 crore
• Peak Debt (FY27): ~₹250 crore
• Target Inventory Days (FY27): 160-170 days

What to track next

Investors should closely monitor the execution of the capacity expansion projects, the successful reduction of inventory days, and the company's ability to manage its debt levels. The operational recovery post Q4 disruptions and achievement of FY27 growth guidance will be critical.