Sarda Energy & Minerals Ltd (SARDAEN) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Your passcode has been confirmed. Please wait while you are joined to the conference. The conference is now being recorded.
Moderator (Elara Securities India Private Limited): Ladies and gentlemen, good day and welcome to Sarda Energy & Minerals Ltd Q2 FY '27 earnings call hosted by Elara Securities India Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ravi Sodah. Thank you and over to you, sir.
Ravi Sodah (Elara Capital): Yeah, good evening. On behalf of Elara Capital, I welcome you to the Q2 FY '27 result call for Sarda Energy & Minerals Limited. From Sarda Energy, we have with us Mr. Pankaj Sarda, Managing Director, Manish Sarda, Deputy Managing Director, Padam Kumar Jain, Director and CFO and Nilay Joshi, Executive Director. I now hand over the conference to Mr. Pankaj Sarda for his opening remarks. Thank you.
Pankaj Sarda (Sarda Energy & Minerals Ltd): Thank you, Mr. Ravi. Good evening, friends and thank you for joining us on our Q2 and H1 FY '27 earnings call. I hope you have had an opportunity to review the financial results and investor presentation available on the stock exchanges and our company website. H1 FY '27 marked a milestone for SEML with our highest-ever half-yearly EBITDA of 1,326 crores,
Pankaj Sarda (Sarda Energy & Minerals Ltd): income stood at 3,221 crores while cash profit increased to 1,225 crores. During Q2 FY '27, we recalibrated captive power operations in line with market conditions, enabling us to optimize our portfolio mix. The flexibility supported EBITDA of rupees 564 crores and PAT of rupees 320 crores on total income of rupees 1,505 crores. The performance despite planned maintenance shutdowns and operational out outages reflects the strength of our underlying businesses and the benefits of our integrated operating model. Let me now take you through our operational highlights. A key operational highlight this quarter was our entry into manganese ore mining, securing preferred bidder status for the Abbagudem Manganese Block in Andhra Pradesh. Operations are expected to commence in approximately 12 to 14 months. Once operational, the mine will strengthen backward integration, enhance raw material security, and improve cost competitiveness, supporting higher profitability in our ferro alloys business. We are now focused on securing the necessary approvals to restart mining operating mining operations. On the production front, we achieved our highest ever half-yearly pellet output of 429,059 tons. At Raipur, the at Raipur, the replacement 30-megawatt turbo generator commenced operations in August 2026 and is operating smoothly at full capacity, supporting captive power generation and steel production. At our 600-megawatt thermal power plant, planned maintenance of one 300-megawatt unit was completed following a 47-day shutdown during the quarter. We had to take multiple maintenance shutdowns over the last 2 years since the takeover of this thermal power project asset, as this was a distressed asset and had not undergone undergone proper maintenance care, which was restricting it from achieving optimum performance levels. With the maintenance cycles of the last 2 years, we are now confident about the efficient functioning of the plant and expect both cost savings in the operations and higher generation going forward. Our hydropower operations recorded strong performance during the quarter despite lower rainfall in certain catchment areas and an 18-day shutdown of the 113-megawatt Sikkim plant from 18th June to 5th July following a transmission tower collapse. Alongside thermal power, hydropower remains an important part of our long-term energy strategy. Let me now update you on our expansion plan. On the 600-megawatt thermal power project, the Ministry of Environment, Forest and Climate Change has approved the terms of reference for expanding capacity from 600 megawatt to 1,200 megawatt. We expect to receive environmental clearance within the current financial year. This brownfield expansion remains one of our most capital-efficient growth opportunities, supported by existing land, water availability, material handling systems, and power evacuation infrastructure. The approval process for our three small hydropower projects in Chhattisgarh with an aggregate capacity of 74 megawatts is is progressing as scheduled. Our 50-megawatt captive solar project is expected to be commissioned in the next quarter, subject to resolution of right-of-way issues affecting the transmission line. The project will add to our captive renewable energy capacity. For our recent acquired 66-megawatt hydropower project in Arunachal Pradesh, most key statutory approvals are in place, and critical land acquisition has been completed. Work on the approach road has commenced, and we remain confident of meeting the planned project timelines. On mining, development of the Shahpur West high-grade coal mine remains on schedule with commissioning target targeted before the end of the current financial year. The Bartunga Hill coal mine also remains on schedule and is expected to be opened by the end of the next financial year. Regulatory approvals for the Gare Palma IV/5 and Sindhuvalli coal blocks continue to progress as planned. We remain prudent in managing our balance sheet with all ongoing expansion projects funded through internal accruals. We remain net debt-free on both for standalone and a consolidated consolidated basis with liquidity exceeding rupees 2,600 crores as of 30th September 2026.
Pankaj Sarda (Sarda Energy & Minerals Ltd): maintaining financial discipline. Looking ahead, our priorities remain timely project execution and deeper integration across mining, energy, and metals. Our greater emphasis on energy reflects its earning potential, while our integrated operations allow us to respond to market conditions and allocate resources towards better returns. We believe this approach will strengthen earnings, visibility, and support sustainable value creation. With that, I'll hand over to Mr. Manish Sarda to take you through the industry environment and outlook.
Manish Sarda (Sarda Energy & Minerals Ltd): Good afternoon, everyone, and thank you, Pankaj. India's expanding energy requirements continue to create opportunities for businesses with reliable generation assets and access to domestic resources. During the quarter, the country's power generation grew 11% year-on-year to around 536 billion units. Peak power demand increased 18% to 270 GW, a new high for the second quarter. As India adds renewable capacity, the requirement for dependable power across different hours of the day remains important. Solar generation increased 39% year-on-year during the quarter, reflecting the pace of renewable energy development. We believe a diversified generation portfolio supported by fuel security and efficient operations is well placed to serve the country's evolving energy requirements. The government's continued focus on domestic resource development strengthens the opportunity for integrated mining and energy business for SEML. Expanding our mining capabilities alongside our power portfolio will deepen this integration and strengthen the operating foundation for future growth. Our entry into manganese ore mining adds a further opportunity to improve raw material security and cost competitiveness in ferro alloys. Domestic steel consumption also continued to grow, supported by the country's industrial and infrastructure requirements. We remain focused on the contribution of our metals and ferroalloys business with the integrated portfolio with operating decisions guided by profitability and efficient use of our resources. Against this backdrop, we believe SEML is well placed through its integrated presence across mining, energy, and metals. Energy's contribution of more than 73-- 75% of H1 EBITDA demonstrates its importance to our earnings profile. Our emphasis on this business is supported by existing generations-- generation assets, mining capabilities, and expansion, expansion pipeline. At the same time, our diversified operations allow us to capture synergies and respond to changes in relative profitability. Over the longer term, government initiatives under, under Viksit Bharat 2047, Makes, Make in India, and Aatmanirbhar Bharat continue to support investment across manufacturing and industrial infrastructure. Our plans to quadruple mining capacity and double energy generation capacity are aligned with these opportunities. Our priority is to convert these investments into dependable operations, stronger earnings, and sustainable returns. We remain confident that our integrated model and continued execution focus will create enduring value for all stakeholders. With that, we would be happy to take your questions. Thank you.
Moderator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Malika from Agarwal Investments. Please go ahead.
Malika (Agarwal Investments): Hi, sir. This is Malika. Thank you for the opportunity. My question is that how will the Avagudem manganese mine strengthen raw material integration and what proportion of captive requirements can it meet and when should its cost benefits start reflecting in ferro alloy profitability?
Manish Sarda (Sarda Energy & Minerals Ltd): Okay. So, the Avagudem mines we have recently won and, it will take some time for it to start as we are filing all the paperwork that is required. And we expect that we will be able to save Rs. 200 to Rs. 300 per ton. The total mine is 450,000 tons extractable reserves. So, we typically require
Manish Sarda (Sarda Energy & Minerals Ltd): low amount of low-grade ore to economize our high-grade ore, which we import from Australia, from Gabon, and from South Africa. So, we expect that, you know, in the next few months, we'll be having a more clear idea as to when we can start with the paperwork, you know, being filed and everything done, and it will roughly save around ₹200 to ₹400. The exact numbers will come out when we actually start mining. But it gives us a raw material security for our low-grade ores for the next four to five years.
Malika (Agarwal Investments): Okay. Got it, sir. Sir, I just had another question. What is the investment, like
118 more turns of this transcript: log in to Stocksigma to read the full call.