This article first appeared on GuruFocus .
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Total Income:Rs. 1,717 crores for Q1 FY27.
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EBITDA:Rs. 762 crores, the highest ever quarterly EBITDA.
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Net Profit (PAT):Rs. 478 crores, a growth of 9.4% year-over-year, and the highest ever quarterly PAT.
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One-Time Net Benefit:Rs. 110 crores included in net profit, mainly related to regulatory approval of the final project cost for the 113 MW Sikkim hydropower plant.
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Energy Business Contribution:Contributed nearly 70% of consolidated EBITDA.
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Power Supply Agreements:Secured medium and long-term agreements for over 380 MW out of the total 710 MW saleable power capacity.
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Thermal Power Plant PLF:Average plant load factor of 85.9% at the 600 MW thermal power plant.
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Balance Sheet:Net debt free on both standalone and consolidated basis.
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Liquidity:Healthy liquidity of more than Rs. 2,500 crores as of June 30, 2026.
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Release Date: August 03, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Sarda Energy & Minerals Ltd ( BOM:504614 ) reported its highest-ever quarterly EBITDA and PAT in Q1 FY27, with EBITDA at Rs 762 crores and PAT at Rs 478 crores, a 9.4% YoY growth.
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The company has secured medium and long-term power supply agreements for over 380 MW out of its 710 MW saleable power capacity, significantly improving revenue visibility and earnings stability.
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Sarda Energy & Minerals Ltd ( BOM:504614 ) is now net debt-free on both standalone and consolidated bases, with healthy liquidity of more than Rs 2,500 crores as of 30 June 2026.
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The 113 MW Sikkim hydropower plant, which was shut due to a transmission tower collapse, has resumed full operations with no material restoration costs, as the expenses are largely covered by insurance.
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The company's expansion pipeline is on track, including the Shahpur West coal mine targeted for commissioning before the end of FY27 and the 30 MW captive power plant ready for trial operations, which is expected to boost steel production.
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July power prices on the IEX have moved up to Rs 5 per unit from Rs 4.19 per unit YoY, indicating a favorable pricing environment for the company's power business.
Negative Points
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The Q1 FY27 net profit included a one-time net benefit of Rs 110 crores, meaning the underlying operational performance was lower than the headline numbers suggest.
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Production in the steel and ferroalloy segments declined YoY due to planned outages, including the replacement of a 30 MW captive power plant unit at Raipur and a 23-day scheduled maintenance at the Vizag captive power plant.
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Generation at small hydropower plants was adversely affected by delayed monsoon conditions during Q1, leading to a shortfall in water availability.
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The commissioning of the 50 MW captive solar project has been delayed due to right-of-way issues on the transmission line, with the new expected timeline pushed to before the end of the next quarter.
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The mineral wool project is currently operating at only 60-65% capacity and is not yet profitable, with production ramp-up hindered by imported equipment stuck due to West Asia-related supply chain disruptions.
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Steel prices remained range-bound with a mild negative bias during the quarter, and the company faces ongoing risks from elevated oil prices and geopolitical tensions that could impact input costs and demand.
Q & A Highlights
Q: What was the impact of the one-time benefit of Rs 110 crore on net profit, and how should we think about the normalized quarterly EBITDA run rate for the rest of FY27? A: Padam Kumar Jain, CFO, clarified that the one-time benefit added Rs 162.64 crore to revenue and Rs 18 crore to other income in the form of interest. At the EBITDA level, the effect is approximately Rs 137 crore (before tax). For the rest of the year, the CFO noted that Q2 is typically better due to hydro generation and improved power prices, but declined to provide specific forward guidance due to market volatility.
Q: With 380 MW of power capacity now under long-term PPAs, will the average power realization decline as more PPAs are signed? A: Padam Kumar Jain, CFO, stated that the back-calculation of Rs 8 per unit is incorrect as it includes prior-period adjustments. He confirmed that PPA tariffs are in the range of Rs 5-6 per unit, but over time, realizations will increase as peak demand and inflation rise, particularly for hydropower. He also noted that while solar is suppressing daytime prices, peak-hour prices have risen significantly, with the peak window expanding from 5 hours to 8-10 hours.
Q: What is the timeline for the environmental clearance and construction commencement of the 600 MW brownfield expansion at SKS? A: Pankaj Sarda, Managing Director, explained that the studies for the Terms of Reference (TOR) are complete and submission is expected within three months. Following the public hearing process, final environmental clearances are expected in 6-8 months, after which construction and consultant appointments will begin.
Q: What is the breakdown of the 5.5 million ton coal mining target, and what is the timeline for the new mines? A: Padam Kumar Jain, CFO, provided a detailed breakdown: Gare Palma 4/7 will contribute 1.8 million tons, Shahpur West 1.6 million tons, Sinduri 0.6 million tons (provisional), and Gare Palma 4/5 2 million tons. Shahpur West is expected to start by the end of FY27, while Batunga Hill will open by the end of FY28. Nilay Joshi, Executive Director, clarified that all new mines are high-grade coal, suitable for the steel and ferroalloy plants rather than power generation.
Q: What is the status of the 50 MW captive solar project, and what were the specific right-of-way challenges? A: Padam Kumar Jain, CFO, explained that the delay is due to a railway line coming through the region, requiring land acquisition. Permission from the railways is expected within the next 1-2 months, with commissioning now targeted before the end of the next quarter.
Q: How do you see PLF and merchant realization evolving over the next few quarters? A: Padam Kumar Jain, CFO, stated that the annual PLF for the IPP will be better than last year, with generation expected to exceed the 415 crore units produced in FY26. The commissioning of the 30 MW captive power plant will also improve capacity utilization and steel production volumes.
Q: What is the status of the mineral wool project, and what are the revenue targets for FY27? A: Manish Sarda, Deputy Managing Director, stated that the plant is operating at 60-65% capacity utilization and is not yet profitable. Demand is strong, but production ramp-up has been hindered by imported equipment stuck due to West Asia supply chain issues. Revenue for FY27 is expected to be in the range of Rs 90-110 crore, with full capacity expected within the next 3-6 months.
Q: What is the outlook for steel and ferroalloy prices in the second half of FY27? A: Manish Sarda, Deputy Managing Director, expects prices to remain stable, with ferroalloy margins potentially improving due to softening raw material costs. Steel prices could see an uptick if the West Asia situation stabilizes, supported by strong domestic demand from infrastructure projects and data center development.
Q: What was the impact of the Sikkim transmission tower collapse, and are there any residual effects on Q2? A: Padam Kumar Jain, CFO, stated that the restoration cost was negligible and fully covered by insurance. The generation loss was limited to a few days and is already reflected in Q1 results. The plant has resumed full operations with no expected residual impact on Q2.
Q: What are the biggest execution risks to achieving the FY30 growth roadmap? A: Padam Kumar Jain, CFO, stated that there are no material risks currently, aside from potential minor delays in regulatory approvals. All projects are progressing as planned, with the company maintaining a net debt-free position and healthy liquidity of over Rs 2,500 crore to fund expansions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
