Sarda Energy Q2 FY27 Earnings Call: Record H1 EBITDA At Rs. 1,326 Cr, Thermal Capacity To Double To 1,200 MW (SARDAEN)

Sarda Energy & Minerals Ltd held its Q2 FY27 earnings call on October 31, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record H1 Profitability Despite Outages

• Record H1 FY 2026-2027 EBITDA of Rs.1,326 crores — highest-ever half-yearly, up ~4% YoY, with PAT of Rs.799 crores (up ~5% YoY), total income of Rs.3,221 crores and cash profit of Rs.1,225 crores.
• Q2 FY 2026-2027 delivered EBITDA of Rs.564 crores and PAT of Rs.320 crores on total income of Rs.1,505 crores, achieved despite planned maintenance shutdowns and operational outages; captive power operations were recalibrated to optimize the portfolio mix.
• QoQ revenue declined — steel revenue fell ~Rs.49 crore and power sales fell Rs.138 crore vs Q1 FY 2026-2027, largely reflecting the thermal unit shutdown.
• Energy contributed more than 73–75% of H1 FY 2026-2027 EBITDA — management cited this as demonstrating the business's importance to the company's earnings profile.
• Highest-ever half-yearly pellet output of 429,059 tons at Raipur in H1 FY 2026-2027; the replacement 30 MW turbo generator was commissioned in August 2026 (Q2 FY27) and is operating smoothly at full capacity.

Shutdown Drag Reverses; Realizations Firm

• 47-day planned shutdown of one 300 MW unit at the 600 MW SKS thermal plant completed in Q2 FY 2026-2027; the CFO estimated a revenue loss of Rs.130-140 crore in Q2 from the shutdown (basis: ~400 crore units annual generation, ~200 crore units from one unit). Management clarified the shutdown covered only one 300 MW unit, not 600 MW as mentioned in the pamphlet.
• SKS thermal realization of Rs.5.42/unit in Q2 FY 2026-2027 (spot market range Rs.5.20-Rs.5.50); hydropower realization was above Rs.6/unit in Q2, with Sikkim spot realization above Rs.6/unit for H1 FY 2026-2027 combined.
• SKS H1 FY 2026-2027 generation of 201-202 crore units; management expects full-year FY 2026-2027 generation to cross 420 crore units and to exceed FY 2025-2026 generation.
• 60% of sellable power tied up as of Q2 FY 2026-2027; Sikkim hydro capacity remains untied as a deliberate strategy, while all other hydro projects are tied up.
• Shutdown cadence clarified — each of the two 300 MW units requires shutdown in alternate years (typically 30-40 days); no shutdowns required in Q3 and Q4 FY 2026-2027 in the normal course, but one unit is expected to shut again for 30-40 days in FY 2027-2028, depending on unit condition.
• Hydro resilience — strong Q2 FY 2026-2027 hydropower performance despite lower rainfall in certain catchment areas and an 18-day shutdown of the 113 MW Sikkim plant (18 June–5 July 2026) following a transmission tower collapse.
• CFO guided hydro profitability lower in H2 FY 2026-2027 on seasonal conditionalities, while thermal profitability is expected to be substantially higher on improved market conditions and higher generation — directional only, with no volumes or figures quantified.

Manganese Entry and Coal Pipeline Advance

• Awagudam manganese block (Andhra Pradesh) won via auction — preferred bidder status secured; the mine holds 450,000 tons of extractable reserves and will supply low-grade ore to economize high-grade ore currently imported from Australia, Gabon and South Africa.
• Operations expected to commence in ~12-14 months (FY 2027-2028) — management expects the entry to strengthen backward integration, raw material security and ferro alloys cost competitiveness; cost savings of Rs.200-300/ton (later cited as Rs.200-400/ton) are expected, with exact numbers to be confirmed only once mining actually begins.
• Raw material security for 4-5 years of low-grade ore requirements; the company is continuously scouting additional manganese mines in Maharashtra, Madhya Pradesh, Andhra Pradesh and Odisha, and is also evaluating international opportunities.
• Coal timelines — Shahpur West high-grade coal mine commissioning targeted before end of FY 2026-2027; Bartunga Hill coal mine expected to be opened by end of FY 2027-2028; regulatory approvals for Gare Palma 4x5 and Sindhuri coal blocks progressing as planned.
• MOEF has approved the Terms of Reference for expanding thermal capacity from 600 MW to 1,200 MW; Managing Director Pankaj Sarda stated the company expects to receive the environment clearance in FY 2026-2027, citing existing land, water availability, material handling systems and power evacuation infrastructure as making this a capital-efficient brownfield opportunity.

Buoyant Steel Market, Rising Input Cost Squeeze

• Steel market currently buoyant — Deputy MD Manish Sarda noted flat products stronger than long products, with flat steel prices near Rs.75,000-77,000 and long products near Rs.54,000 in some places in Mumbai; he expects strong demand and decent realizations in Q3 FY 2026-2027, though the quarter is "a little unpredictable."
• Imported coal freight spike — South African freight for a 50,000-tonne vessel, normally $18-22, is currently at $36-38, making coal more expensive for steel production.
• Australian coking coal prices very high — seasonal flooding is impacting mines, with prices typically peaking in December–January (Q3–Q4 FY 2026-2027); management expects a raw-material squeeze in Q3 FY 2026-2027 but views the steel cycle as good.
• Domestic raw material prices pushed higher — MD Pankaj Sarda noted heavy monsoons flooded mining facilities across India, pushing mine production capacities to their lowest phase; he expects this to ease over the next 2-3 months (Q3 FY 2026-2027).
• Captive coal cushion — the company is meeting part of its coal requirement from its own captive mines, leaving it "somewhat isolated" from the freight spike; West Asia tensions remain a logistics risk to be assessed from Q3 FY 2026-2027 onward.
• H2 FY 2026-2027 utilization outlook — IPP thermal plant utilization expected to improve (H1 was on the lower side); steel/pellet and sponge iron plants to run at similar levels, while billet and wire output may be lower if power is sold at remunerative prices, or higher if power realizations are only normal.

Net Debt Free with Upgrades

• Net debt free on standalone and consolidated basis — liquidity exceeding Rs.2,600 crores as of 30 September 2026 (Q2 FY27-end); all ongoing expansion projects funded through internal accruals.
• CRISIL upgrades — ACML upgraded one notch (AA- to AA) and Sarda Metals and Alloys Limited upgraded two notches from A (destination rating not specified in remarks).

Directional Optimism, No Quantified Guidance

• Management declined to quantify FY 2026-2027 revenue or EBITDA growth — CFO Padma Kumar Jain said quantification is very difficult because the pricing situation is very dynamic across all segments; asked whether the company could deliver over Rs.2,500 crores in FY27, the CFO reiterated that the company does not give forward guidance, calling such numbers "very speculative."
• Power prices expected much better in H2 FY 2026-2027 than Q1 FY 2026-2027 levels — management cited a much different power demand scenario; no specific realization number was given for FY 2027-2028 despite the analyst's query.
• Industry backdrop cited by management — India's power generation grew 11% YoY to ~536 billion units and peak power demand rose 18% to 270 GW (a new Q2 high) in Q2 FY 2026-2027; solar generation increased 39% YoY in Q2 FY 2026-2027 (industry data).
• Management plans to quadruple mining capacity and double energy generation capacity (period unspecified) — aligned with government initiatives under Viksit Bharat 2047, Make in India and Atmanirbhar Bharat, which management said continue to support investment across manufacturing and industrial infrastructure.
• Renewables/hydro pipeline on track — three small hydropower projects in Chhattisgarh (74 MW aggregate) progressing as scheduled; the 50 MW captive solar project is expected to be commissioned in Q3 FY 2026-2027, subject to resolution of right-of-way issues affecting the transmission line; for the 66 MW Arunachal Pradesh hydro project, most key statutory approvals are in place, critical land acquisition completed and approach road work commenced.
• Priorities — timely project execution and deeper integration across mining, energy and metals, with greater emphasis on energy reflecting its earning potential; no quantitative guidance, targets or specific timelines were provided in the closing remarks.