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

Executive summary

• Q2 FY26 revenue declined 12.6% year-on-year to INR 432 crore, mainly due to lower sales volumes and price reductions from falling raw material costs, but EBITDA rose 16% to INR 56 crore and PAT increased to INR 34.56 crore, aided by lower finance costs and operational efficiencies.

• Sales volume for Q2 FY26 was 55,536 tons, with realizations steady compared to the previous quarter.

• The company became debt-free in July after repaying all borrowings, reducing finance costs, and received a capital infusion from Aichi/IT Steel, which increased its stake to about 25%.

• Major projects include the greenfield plant and forging line, with commissioning targeted by July 2029, and commercial utilization of the Kocks Block and new reheating furnace expected to boost capacity.

• Statutory auditors issued an unmodified limited review report, confirming compliance with regulatory requirements.

Financial highlights

• Q2 FY26 revenue was INR 432 crore, down 12.64% year-over-year, with Q2 sales volume at 55,500–55,536 tons and EBITDA per ton at INR 10,000–10,170.

• PAT for Q2 FY26 was INR 34.56 crore, up 33.86% year-over-year; basic EPS rose to INR 3.61.

• H1 FY26 revenue was INR 865–865.97 crore, with EBITDA at INR 95.81–96 crore and PAT at INR 54.46 crore.

• Bright bar volumes declined due to reduced US exports amid tariff issues; export revenue contributed 3–8% of H1 sales.

• Total comprehensive income for H1 FY26 was INR 54.3 crore, up from INR 51.99 crore in H1 FY25.

Outlook and guidance

• EBITDA per ton guidance for next year is INR 8,000–11,000, up from the current INR 7,000–10,000.

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

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

• No major new CapEx planned for the existing plant after current projects; future CapEx to focus on new plant and forging business.

• The company continues to benefit from government incentives under the Industrial and Business Development Policy 2017.