Godawari Power Q1 FY27 Earnings Call: Targets 4x Revenue, 3x EBITDA Growth, EBITDA Margin Holds at 19.1% (GPIL)

Godawari Power & Ispat Ltd held its Q1 FY27 earnings call on August 07, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Margins Hold Despite Cost Headwinds; Volume Growth Paused

• Revenue grew YoY and sequentially in Q1 FY 2026-2027, supported by healthy sales volume and improved realization, though no absolute revenue figure was disclosed.
• EBITDA margin of 19.1% and PAT margin of 12.7% in Q1 FY 2026-2027; sequential profitability softened due to higher input costs from increased iron ore market procurement and elevated coal prices.
• 4.7 mt pellet capacity operated at 77% utilization in Q1 FY 2026-2027, expected to ramp to 80–85% in FY 2026-2027; one 2 mt plant was shut down temporarily.
• CO₂ emission intensity improved 1.9% QoQ and 4.2% YoY to 3.180 t/t in Q1 FY 2026-2027 (WSA methodology: 2.485 t/t, stable).
• EV fleet of 15 dumpers, 24 loaders, 15 excavators reduced operating cost by 75% and CO₂ emission by 88% vs. diesel.

Iron Ore Ramp-Up Delayed; Pellet Output Cut on Weak Pricing

• Mining production guidance of 3.4 mt for FY 2026-2027 remains on track, supplemented by 1.2–1.3 mt of market purchases; pellet production will be lower due to a 45-day plant shutdown.
• Raw material cost increased 14% in Q1 FY 2026-2027 (iron ore 75%, imported coal 25% of the increase); imported coal cost jumped ~24% from Rs.10,500/t in Q4 FY 2025-2026 to Rs.13,000/t in Q1 FY 2026-2027, with Q2 FY 2026-2027 expected to remain elevated.
• Government land approval for dumping ground expansion is pending — management cited "Government land approval for the dumping ground (tree cutting, final state government approval) is pending" — with expectations of clearance by end of September FY 2026-2027; mining ramp-up from October 2026.
• Pellet prices touched a COVID-era low of Rs.8,700/tonne in early July 2026, triggering a temporary plant shutdown; as of early August 2026, demand recovered and prices rose ~10%.
• Management expects iron ore prices to remain in the $90–100 range over the next 1–2 years, citing the Simandou project ramp-up time and growing Indian demand including imports by port-based plants.
• Management targets mining cost below Rs.2,700/tonne from FY 2027-2028 (down from current Rs.3,000–Rs.3,500), driven by beneficiation and EV deployment; a Rs.100/tonne saving on 5–6 mt production yields Rs.45–50 Cr benefit.

CRM Relocated to Maharashtra; BESS and Solar on Track

• CRM complex relocated to Maharashtra (Sambhajinagar) due to water allocation delays from the state government; land allotment expected by end-August 2026, construction from October 2026, commissioning targeted for December 2027 (Q3 FY 2027-2028).
• CRM project capex revised from Rs.950 Cr to Rs.1,100 Cr (~15–20% increase), attributed to one-time land and infrastructure costs in Maharashtra; includes Rs.200 Cr for working capital margin.
• Management revised expected EBITDA margin for the Maharashtra CRM complex from 7–8% to 10–11% with inclusion of state industrial policy incentives; proximity to automobile hub and raw material supply (JSW Dolvi, ArcelorMittal Gujarat) cited as demand advantages.
• BESS (Battery Energy Storage System): Domestic EMS and PCS tie-ups completed per government directive (20% made-in-India requirement); commercial sales quoting began in August 2026; 45 MW captive BESS targeted for commissioning Q3 FY 2026-2027 (Oct–Dec 2026).
• Solar expansion: 25 MW commissioned May 2026; 100 MW under construction, targeted commissioning September 2026; 250 MW project kept in abeyance due to CRM relocation.
• Beneficiation plant expected to come on stream in Q3 FY 2026-2027, improving captive iron ore security and ore quality; capex incurred Rs.100–218 Cr till June 2026.
• Boria Tibu mining expansion targets 4 mt mining and 4 mt beneficiation by FY 2030-2031 — management cited "Capex targets 4M tonnes mining and 4M tonnes beneficiation by FY 2030-2031" — yielding 1.5–2 mt of usable concentrate for pellet feed (average mine grade 45–50% Fe, concentrate 65%+ Fe).

Rs.2,000 Cr Capex Program Funded Through Internal Accruals

• Management guided for Rs.2,000 Cr total capex for the remaining FY 2026-2027 and entire FY 2027-2028, covering CRM (Rs.1,000 Cr remaining), battery storage (Rs.700–800 Cr remaining), and mining.
• No debt required for current projects; internal cash flows are sufficient to fund ongoing capacity expansions; the integrated steel plant (1 mt) is kept on hold indefinitely due to water allocation delay from the state government.
• Cash utilization plan deferred until after completion of current capex (CRM and base projects) and full clarity on the integrated steel plant; no specific guidance or timeline provided for cash deployment.
• Vision 2030 targets revised — management cited "4x revenue growth, 3x EBITDA and PAT growth" with the steel plant removed from revenue and EBITDA targets; updated guidance is based on the CRM complex and battery storage.
• Management expects margin improvement from Q4 FY 2026-2027 after commissioning of the beneficiation plant, which will improve captive iron ore security and ore quality.
• For sensitivity, a Rs.100/tonne decline in pellet prices reduces annual profitability by Rs.40 Cr based on 4 mt of pellet production; pellet prices are primarily driven by steel demand sentiment.

Approval Delays, Cost Pressures, and Gas Supply Uncertainty

• State government approval delays remain a key risk — management cited state government delays as "unfortunate" and not in their control, impacting both the water allocation for the steel plant and tree-cutting approvals for mining expansion.
• PNGRB gas pricing guidelines caused a 40–45% increase in gas purchase value — management cited "40-45% increase in gas purchase value under new PNGRB guidelines" — making one pellet plant commercially unviable under weak steel prices; the plant is shut down with restart subject to gas supply.
• No clarity on natural gas force majeure resolution; the supplier has no timeline due to the dynamic situation; management is evaluating restart of the third pellet unit in September FY 2026-2027 subject to gas supply.
• Merchant iron ore procurement expected at 25–30% in Q3 FY 2026-2027, declining to below 10% in Q4 FY 2026-2027, reaching 100% captive only by FY 2027-2028; current procurement elevates costs.
• Pellet production guidance for FY 2026-2027 will be slightly lower than the earlier 4.0 mt target due to the 45-day shutdown; revised guidance to be communicated later.
• Galvanized products volume declined in Q1 FY 2026-2027 due to monsoon seasonality, with recovery expected post-monsoon.