Vardhman Special Steels (VSSL) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 revenue declined 12.64% year-over-year to ₹432.27 crore, with sales volume at 55,536 tons, driven by lower sales volumes and price reductions due to falling raw material costs.

• EBITDA rose 16.58% year-over-year to ₹56.48 crore, with EBITDA per ton at ₹10,170, aided by reduced finance costs from Aichi Steel's capital infusion and lower raw material prices.

• PAT increased to ₹34.56 crore from ₹26 crore year-over-year, reflecting improved operational efficiency, lower interest expenses, and higher other income.

• Major board changes included the appointment of a new Chairman, two new board members, and the renewal of the technical assistance agreement with Aichi Steel.

• Strategic initiatives included commissioning of the COPS/Kocks block, progress on a new reheating furnace, and steps toward a greenfield plant and forging line.

Financial highlights

• Q2 sales volume was 55,536 tons, down from 59,000 tons year-over-year; H1 FY26 revenue was ₹865.97 crore, with H1 EBITDA at ₹95.81 crore, nearly flat year-over-year.

• EBITDA per ton for H1 was ₹8,600; PAT for H1 was ₹54.46 crore versus ₹52 crore last year.

• Finance costs declined 64.67% year-over-year in Q2 FY26 due to repayment of ₹150 crore WCDL using Aichi funds.

• Basic EPS for Q2 FY26 was ₹3.61, up from ₹3.17 in Q2 FY25.

• Total comprehensive income for H1 FY26 was ₹5,430.20 lakhs, up from ₹5,199.32 lakhs in H1 FY25.

Outlook and guidance

• EBITDA per ton guidance raised to ₹8,000–11,000 for next year, with further upside possible in subsequent years.

• FY27 volume target is 245,000 tons; FY28 capacity expected at 270,000 tons.

• No major new CapEx planned for the existing plant after current projects; greenfield plant and forging line to drive future growth.

• Margins may dip in Q3 due to further price reductions being passed to customers.

• The new reheating furnace is expected to be commissioned in H2 FY26, enhancing operational performance.