Steamhouse India Ltd (STEAMHOUSE) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day and welcome to Steamhouse India Limited Q2 FY '27 earnings call. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Sharma from Adfactors PR. Thank you, and over to you, sir.
Amit Sharma (Adfactors PR): Good afternoon, everyone. Welcome to the Q2 and H1 FY '27 earnings conference call of Steamhouse India Limited. Today, from the management side, we have with us, Mr. Vishal S. Budhia, Chairman and Managing Director; Mr. Vaibhav Gattani, Chief Financial Officer of Steamhouse India Limited. We also have the Adfactors PR team on the call today. We will begin the call with the opening remarks from the management, after which, we shall open the forum for the Q&A session. I must remind you that this conference may include forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the management as on the date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference to Mr. Vishal S. Budhia for his opening remarks. Thank you, and over to you, sir.
Vishal S. Budhia (Steamhouse India Ltd): Thank you, Amitji, for the introduction. Good afternoon, everyone, and a warm welcome to Steamhouse India Limited's Q2 and H1 FY '27 earnings conference call. Thank you for taking out the time to join us today. I would also like to extend my sincere thanks to our investors, analysts, and stakeholders for their continued interest, trust, and confidence in the company. Let me begin by sharing our perspective on the progress we have made, our key business developments, and the opportunities ahead as we continue to build Steamhouse into a scalable industrial steam and infrastructure platform. As you know, the community boiler concept is still a relatively nascent stage in India. However, we believe it has significant potential as industries increasingly look for reliable, cost-efficient, and environmentally responsible energy solutions. Under this model, steam is generated centrally and distributed to multiple industries, or industrial customers, through a common pipeline network. This can help customers reduce the need for individual boiler infrastructure while supporting more efficient use of resources. We believe that the combination of industrial growth, increasing focus on energy efficiency and development of organized industrial parks can create a favorable environment for the adoption of this model. Government initiatives to promote industrial infrastructure, sustainability, and more efficient energy solutions could further support this opportunity. Steamhouse is well-positioned to participate in transition, given our operating experience, established customer relationship, and expertise in developing and managing steam infrastructure. We are encouraged by the traction we are seeing. The community boiler project at Bulk Drug Park, Una, Himachal Pradesh represents an important milestone for us. It provides an opportunity to demonstrate our capabilities beyond our established markets in Gujarat and to build a presence in a new industrial geography. More recently, we signed an MoU with the Haryana Enterprise Promotion Centre, Government of Haryana, to explore the industrial infrastructure opportunities in state, involving a proposed investment of Rs. 500 crores. The MoU establishes a framework for cooperation and government facilitation to evaluate potential opportunities, including common boiler infrastructure for industrial clusters. We view this as an encouraging step towards exploring new markets. Despite geopolitical uncertainties, including tensions in the Middle East, we believe India's continued economic and industrial development provides a supportive long-term backdrop for our business. The development of industrial parks and manufacturing clusters can create opportunities for centralized steam infrastructure, and we intend to pursue the, these opportunities in a
Vishal S. Budhia (Steamhouse India Ltd): tends to be on the lower side. Despite these conditions, we are very happy to have the best Q2 in our history. We delivered year-on-year growth in steam volumes during Q2, reflecting continued strength of our business for the first half of FY27. Steam volumes grew by 14.35% year-on-year. The continued progress we are making in expanding our customer base and infrastructure is reflective of the inherent strength. While volumes moderated marginally on a quarter-on-quarter basis in Q2, our focus remains on maintaining operational reliability, improving efficiency, and strengthening profitability as the business scales. We are also seeing progress in our operating performance. EBITDA per ton has improved significantly compared with the corresponding period last year, reflecting our ongoing focus on operational efficiency, cost management, and better utilization of infrastructure. We continue to evaluate alternative fuels that are economically viable and environmentally responsible. Our objective is to manage operating costs while maintaining reliable service for our customers. Let me now take you to through the through our key expansion and project execution updates. Our Jhagadia facility is progressing towards commissioning with approximately 14.8 tons per hour of capacity already contracted out of the planned 30 tons per hour. This gives us a foundation of customer demand as we bring the facility into operation. We are also progressing with our planned expansions at Nandesari and Vapi. These projects are being developed alongside customer discussion and contracting so that we can align new capacity with demand and build utilization in a measured manner. Beyond these projects, Tarapur and Pirana are currently under construction while steam purchase and distribution operations at Dahej SEZ and Haldia are also being planned. Additionally, the company plans to execute its IPO-funded projects at Ankleshwar Phase 3, Panoli Phase 2, and Dahej GIDC Phase 2. Steamhouse continues to explore opportunities across the industrial markets to capitalize on emerging growth opportunities and further expand its geographical presence. Our approach remains disciplined. We want to add capacity where we see credible customer demand, execute projects efficiently, and build utilization progressively. We believe that this approach will help us manage capital prudently while creating a platform for sustainable growth. As our network expands, we expect the combination of customer relationship, pipeline infrastructure, and operating expertise to remain an important competitive advantage for us. I would like to now discuss how we are building complementary growth avenues for Steamhouse. Alongside our core steam business, we are exploring opportunities in industrial gases. At our existing Ankleshwar facility, an additional 750 Nm3 per hour PSA plant is, nitrogen plant is planned with commissioning expected by the end of calendar year 2026. Our existing industrial customer relationships and infrastructure provide a foundation for exploring complementary opportunities in nitrogen and other industrial gases as well. However, steam will remain our core business, and we will approach these additional opportunities with the same emphasis on commercial viability, operational execution, and capital discipline. As far as expanding beyond our established markets is concerned, I would like to highlight the significance of the Una project in Himachal Pradesh. The project involves a 300-tons-per-hour community boiler facility with an EPC mandate of approximately 311 crore rupees inclusive of GST along with a long-term operations and maintenance responsibility. The project cost is to be funded by Himachal Pradesh Bulk Drug Park Infrastructure Limited. For Steamhouse, this is an important opportunity to apply our technical and operating capabilities in a new geography. It also allows us to build experience in delivering and operating large-scale centralized steam infrastructure beyond our existing markets. Our priority will be to execute the project responsibly, meet the required milestones, and establish a a strong operating track record. To conclude, let me share the outlook and priorities going forward. Our priorities are clear. First, we will continue to grow steam volumes and improve utilization across the existing network. Second, we will focus on timely and efficient execution of our expansion projects with an emphasis on customer contracting, commissioning, and operational reliability. Third, we will evaluate
Vishal S. Budhia (Steamhouse India Ltd): ties in new industrial clusters and geographies, including those where government initiatives and industrial parks developments could support the community boiler model. Finally, we will continue to explore industrial gases and alternative fuel solutions as complementary opportunities, while maintaining financial discipline and keeping our core steam business at the center of our strategy. We believe Steamhouse is operating in a market with meaningful long-term potential. Our focus is not simply on adding capacity, but on building a reliable, scalable, and profitable platform, one that combines customer demand, efficient infrastructure, and disciplined execution. With that, I would like to thank our employees, customers, business partners, and shareholders for their continued support. I will now hand over to our Chief Financial Officer, Mr. Vaibhav Gattani, who will take you through the detailed financial and operating performance of Q2 and H1 FY27. Thank you.
Vaibhav Gattani (Steamhouse India Ltd): Thank you Vishal sir. Good afternoon, everyone. I'll take you through Steamhouse India Limited's operating and financial performance for quarter two and H1 FY27. I'll begin with our operating performance, followed by the financial results for the quarter and the first half, and then briefly cover customer retention, our balance sheet and capital allocation priorities. During quarter two FY2027, Steamhouse sold 3,01,642 tons of steam, representing year-on-year growth of 12.06%. On a sequential basis, steam volumes declined by approximately 1.36% during the quarter. In addition to the seasonal impact of the monsoon, our steam purchase and distribution volumes were affected by the temporary shutdown of one of the facilities from which we procure steam for a few days due to scheduled maintenance. This temporarily impacted supply and distribution volumes during the quarter. The facility resumed operations following the maintenance period, and we continue to focus on maintaining steam supply reliability and minimizing the impact of such planned shutdowns on our operations. For H1 FY2027, the total steam sales reached 6,07,459 tons compared with 5,31,240 tons in H1 FY2026, representing growth of 14.35% year-on-year. This performance reflects the continued contribution of our existing customer base, new customer additions, and sustained demand from our industrial customers. In terms of capacity utilization, we achieved 42.41% in quarter two FY27 compared with 35.28% in quarter two FY26 and 41.40% in quarter one FY2027. For H1 FY2027, capacity utilization improved to 41.91% compared with 37.03% in the corresponding period of last year. Although utilization has improved, we continue to see opportunities to increase it further. As volumes grow across our existing facilities, we can spread fixed infrastructure and operating costs over a larger volume of steam. This operating leverage is an important contributor to improving profitability. Coming to our financial performance, revenue from operations for quarter two FY27 stood at ₹128 crore compared with approximately ₹124.94 crore in quarter two FY26, representing year-on-year growth of 2.45%. Within this, revenue from steam generation and distribution was ₹96.97 crore, while steam distribution contributed ₹25.56 crore. The balance came from the other activities, including nitrogen and other reported items. EBITDA for the quarter increased to ₹24.68 crore compared with ₹14.24 crore in quarter two FY2026, registering growth of 73.38% year-on-year. EBITDA margin improved to 19.28% compared with 11.39% [inaudible] clean EBITDA [inaudible] expenses to view of underlying operating performance stood at ₹22.50 crore, an increase of 79.15% from ₹12.56 crore in quarter two FY2026. Profit after tax for quarter two FY2027 stood at ₹7.77 crore compared with ₹2.91 crore in the corresponding period last year, representing growth of 167.14%. PAT margin improved to 6.07% compared with 2.33% a year earlier.
Vaibhav Gattani (Steamhouse India Ltd): these year-on-year improvements reflect the progress we have made in strengthening operating profitability and managing costs as our business grows. On a sequential basis, however, EBITDA moderated from Rs 30.93 crore in Q1 FY27 to Rs 24.68 crore in Q2 FY27. PAT also moderated from Rs 18.34 crore to 7- Rs 7.77 crore while EBITDA per ton declined compared with the previous quarter. This moderation needs to be viewed in the context of monsoon-related operating challenges and movements in operating costs during the quarter. We remain focused on improving fuel utilization, operating efficiency, and the performance of individual facilities to support more consistent margins. Turning to our first half performance, revenue from operations increased to Rs 256.62 crore in H1 FY27, compared with Rs 238.42 crore in H1 FY26, representing growth of 7.63% year-on-year. EBITDA increased to 55.62 crore compared with Rs 33.56 crore in the previous year period, registering growth of 65.72%. EBITDA margin expanded to 21.67% compared with 14.08% in H1 FY26, an improvement of approximately 759 basis points. Profit after tax increased to Rs 26.11 crore compared with Rs 13.09 crore in H1 FY26, representing growth of 99.56%. PAT margin improved to 10.18% compared with 5.49% in the corresponding period last year. Clean EBITDA for H1 FY27 stood at Rs 51.72 crore, up 71.13% from Rs 30.22 crore in H1 FY2026. Another important indicator is EBITDA per ton. For H1 FY2027, EBITDA per ton increased to approximately Rs 916 compared with Rs 632 in H1 FY2026, representing growth of 44.93% year-on-year. Overall, profitability has grown faster than revenue during the first half. Improved capacity utilization, higher steam volumes, and operating efficiencies have contributed to this performance. Our focus is to sustain these improvements as we expand our network and bring additional capacity into operation. An important strength of our business is the continuity of our customer relationships. Approximately 99.48% of H1 FY27 revenue came from repeat customers, highlight- highlighting the recurring nature of demand for our services. Our steam supply agreements also generally include mechanisms to pass-through changes change in coal prices. These arrangements help us in managing fuel price volatility, although the specific mechanisms and timing can vary customer-to-customer. Let me turn now to our balance sheet and capital position. At the end of H1 FY27, our net debt-to-equity ratio stood at 0.16 times compared with 1.57 times in FY26. This improvement reflects the reduction in debt following our capital raise and resulting strengthening of our balance sheet. Our priority remains to maintain a prudent capital structure while ensuring that we have the resources required to execute our growth plans. Following the IPO and the resulting increase in shareholders' equity, our return ratios have moderated. Our reported ROCE was 12.97%, while ROE was 4.53%. These figure- figures are not annualized. As the capital raised is deployed in growth growth projects and as new facilities are commissioned and utilization improves, we expect these investments to contribute to the business over time. The pace and extent of any improvement in return ratios will depend on project execution, customer ramp-up, and operating performance. We are therefore maintaining our disciplined approach to capital allocation. Our priorities include funding committed projects, managing debt and borrowing costs, and retaining sufficient liquidity for day-to-day operations. We shall continue to assess new investments against customer demand, expected utilization, and their potential contribution to long-term profitability. To conclude, Q2 FY27 delivered year-on-year growth in steam volumes, EBITDA, and PAT, although profitability moderated sequentially compared with Q1.
Vaibhav Gattani (Steamhouse India Ltd): For the remainder of FY27, our priorities are to increase utilization across our existing network, maintain operating efficiency, execute our expansion pipeline in a disciplined manner, and continue strengthening our balance sheet. We believe that these priorities will be important in converting our growth opportunities into sustainable financial performance and creating long-term value for our shareholders. Thank you for your time and attention. We'll be now happy to take questions from the participants.
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 Krisha Kanzaria from Boring AMC. Please go ahead.
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