Shera Energy Ltd (SHERA) Q2FY27 Concall Transcript - Sep-2026 Qtr
Aarshi: Ladies and gentlemen, good day and welcome to the Shera Energy Limited Earnings Call hosted by Branding Edge. 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this call is being recorded. I now hand the conference over to Ms. Jhanvi Kankaria from Branding Edge. Thank you and over to you, ma'am.
Jhanvi Kankaria (Branding Edge): Thank you, Aarshi. Good afternoon everyone and welcome to Shera Energy Limited's earnings concall to discuss the H1 FY '27 results. We have on call with us Mr. Naseem Sheikh, Chairman and Managing Director, Mr. Sumit Singh, Chief Financial Officer, Mr. Sahil Sheikh, President and COO, and Ms. Isha Sheikh, Vice President, Strategy. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces. May I now request Mr. Naseem Sheikh to take us through the company's business outlook and performance, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.
Naseem Sheikh (Shera Energy Ltd): Good afternoon, everyone and thank, and thank you for joining us on Shera Energy's earning call for the first half for financial year 2027. Our results, earning release and investors presentation are available on the stock exchange and on our website. I hope you have had a chance to look at them. H1 FY '27 marks a landmark first half in Shera journey for the first time in our history. The group has crossed rupees 1,000 crores of revenue
Naseem Sheikh (Shera Energy Ltd): we have built over two decades, and I would like to walk you through what is driving them and where we are taking Shera from here. Let me begin with the environment we are operating in because it explains a great deal of our growth. India is in a middle of large electrification under the National Electric- Electricity Plan. India targets to invest about 9.15 lakh crores in its transmission network by 2032. The transformation capacity is expected to grow to 2,342 gigawatts over the same period. Every one of those transformers need will be would need for the winding wire and conductors, which is the product that Shera was built on. At the distribution end, the 3.03 lakh crores RDSS program continues to modernize grids and replace aging distribution transformers. Renewable and electric mobility are adding fresh demands on top of this. India's installed power capacity has crossed 500 gigawatts. Solar capacity has grown many times over in decade and EV sales rose above 25% in financial year '26. Domestic solar cell and module manufacturing is also scaling up, which creates demand for PV ribbons, one of our new product. On the raw material side, India imports more than 90% of its copper concentrate. Nil custom duty on copper scrap and National Critical Mineral missions are supporting domestic recycling and integrated producers. This is where our recycling business and our Zambia project became strategically important. Metal prices remained volatile through the period with LME copper at elevated levels. We see all as a structural feature of our industry, not a passing phase. Companies that can recycle, work across metal and secure their own inputs will be better placed to protect margins. This is exactly the model we are building. Against this backdrop, the first half of financial year '27 was the strongest in the history. Demand from transformers and power equipment manufacturers was robust and broad-based and we used our existing capacities better. Our average monthly order book stands around 200 crores, which gives us a good visibility. This is also the period when our new business began to contribute. At Shera Metal, our forward forward integration business, the new facility for superfine enameled wire, PV ribbon wire and busbar is now in commercial production. CTC conductor trials are complete and our first commercial order has been executed. We expect full-scale CTC production by the end of this financial year. CTC is used in large power transformers up to 765 kV class, a segment India still largely imports. So, this is an important substitution opportunity for us. At Rajputana Industries, our listed recycling subsidiary, we have added around 4,950 MT per annum a new capacity at Reengus across four nickel iron alloy, copper cables, wires and aluminum, including 24 metric ton per annum of
Naseem Sheikh (Shera Energy Ltd): nickel iron alloy capacity, we also added 36,000 km per annum of cable and conductor capacity. Both have started commercial production. With this, the group's consolidated installed capacity increased from 46,750 metric tons to about 51,700 metric tons. The nickel alloys are a specialty niche with few organized Indian players, and they take Rajputana beyond commodity products. In H1 FY '27, Rajputana contributed a revenue of about 453 crores and a PAT of about 10 crores. In Zambia, Shera Zambia Limited, our 99.5% subsidiary in the in the Copperbelt, produced its first trial batch of 8.6 metric tons of 99.99% pure copper cathode and the full batch was sold. The phase one capacity is 1,200 metric tons per annum, with the potential to scale to 5,000 tons. We expect commercial operations to begin in Q4 FY '27. We also strengthened our balance sheet during the period. On 14th July 2020 '26, we allotted 45 lakh convertible warrants at Rs. 118 each on a preferential basis, aggregating to 53.10 crores. A day later, Acuité upgraded our long-term rating to A- with stable outlook and our short-term rating to A2+. Both gives us more financial flexibility to fund the next phase of growth. Let me now walk you through the numbers. All figures are on consolidated basis. For the first half FY '27, the revenue from operations was 1,047.40 crores, up by 34.2% from Rs. 780.65 crores a year ago. EBITDA stood at Rs. 70.78 crores, up by 70.9% and EBITDA margin expanded by 146 basis points to 6.76%. Profit after tax nearly doubled to Rs. profit after tax was Rs. 30.77 crores, up by 102.3%, with a PAT margin improving by 99 basis points to 2.94%. What I am most pleased with is that profit grew three times faster than revenue. Metal prices were volatile during the period. Our multi-metal capability across copper, aluminum and brass lets us serve the customer as their material needs shift, and in-house recycling giving us better control over input cost. Together with disciplined working capital management, this helped us to grow volumes without putting pressure on margins. These results came mainly from our existing operations. The new value-added lines have only just began contributing, and Zambia has yet to enter the commercial production. Looking ahead, let me talk how we see the next phase of growth for Shera. We are building Shera into an integrated non-ferrous metal platform that covers the value chain from cathode to billets, rods, wire and finished conductors. Our new product in India take us closer to the cust-
Naseem Sheikh (Shera Energy Ltd): and into more specialized higher-margin applications. Zambia takes us closer to the source of copper, our single largest raw material cost. We are also taking a further step in building our international presence. Yesterday, our board approved a incorporation of a wholly-owned subsidiary in Dubai with an investment up to USD 5 million. The subsidiary will focus on trading and warehousing of non-ferrous metal, electrical equipment and their raw materials. Dubai is a natural hub between our operations in India and Africa, and our export markets in GCC and beyond. It will help us serve international customers more closely and raw materials source raw materials more efficiently. The incorporation is subject to applicable regulatory approvals in India as well as in United Arab Emirates. Our FY30 vision is to work towards 20% to 30% annual revenue growth, driven by capacity new value driven by new capacities, new value-added products and exports. Over the coming quarters, our priorities are clear. At Shera Metal, we will scale up our new value-added products lines and aim to reach full scale CTC production by end of this year. At Rajputana, we will ramp up our nickel alloys and cable business while continuing to expand our recycling capability. In Zambia, our goal is to begin commercial production and then prove that we can source, process and sell consistently at commercial scale. Our new Dubai subsidiary will act as a trading and warehousing hub helping us to grow exports beyond our current 15 plus other countries and build on our central African base. We have also met an eligibility criteria for migrating to NSE main board as well as BSE and the formalities are underway. Through all of this, we will keep improving utilization, working capital and leverage as we grow. This is a real work between opportunity and a dependable business, and we will invest with attention towards working capital, financing cost and returns. That is an ambition we must earn through execution every year. We made winding wires because we understood transformers. We expanded our products because customers trust trusted us and with more of their requirements. We build recycling because we saw value in the in what others treated as waste. And we are developing Zambia because we want to secure more on our supply chains. We are building Shera for the long term and we intend to keep earning your confidence as we grow. Thank you. I will now handover over to the moderator to open the floor for questions.
Moderator: Thank you, sir. 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. Participants, you can press star and one to ask your questions. The first question is from the line of Mr. Aryan Shetty from
Moderator: Capital, please go ahead.
Aryan Shetty: Hi, sir. Congratulations on a very strong first half. So, my question is on the revenue run rate. In H1 FY '27, the company's average monthly sales were around ₹170 to ₹180 crores. So, do you think, do you see that the run rate going higher in H2 as the new capacities ramp up, and with the monthly order book, as you said, is ₹200 crores? And also, what would be the key drivers in getting there?
Naseem Sheikh (Shera Energy Ltd): Thank you for your valid question. And very correct, you have calculated very correctly. But if you see our figures, as we don't declare on a monthly basis, but if I see on my internal records, the company was doing 150-odd crores in the initial months, then it scaled up to 176, and for last couple of months, we are doing roughly 200 around. So, I expect this to be moving in a right direction, and the company is expected to maintain a CAGR of roughly 30%-35% around in terms of quantity and in terms of that growth. New product line definitely is going to add up sizable into that. The revenue is mainly dependent on the market price as well. So, if the market price volatilities are in the range of 10% plus-minus, then definitely ₹200 crores is an achievable target that we will be maintaining for this financial year. And if the market price goes further high or further down, then it may have a marginal impact. But the negative impact is going to be subdued by the quantities that we are adding on month-to-month basis. The new products that are coming up, like CTC is yet to come into a large production, so that we anticipate to happen after 3 months. And going further, I expect the revenues of the company is going to be increasing.
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