Sarda Energy & Minerals Ltd Q4 FY26 Earnings Call: Guides Rs. 500-700 Cr Annual Capex, Thermal Volumes Expected at ~400 Cr Units

Sarda Energy & Minerals Ltd held its Q4 FY26 earnings call on May 23, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Resilient Demand Amid Global Headwinds

• India's crude steel production grew >11%in FY 2025-2026, with consumption reaching ~164 million tonnes, while global markets contracted during the same period.
• Steel prices recovered 10–15%during Q4 FY 2025-2026 from multi-year lows earlier in the fiscal year, supported by domestic demand and safeguard measures limiting Chinese dumping.
• India's power demand hit a record peak of 270.8 GWin Q4 FY26, surpassing the previous peak of 250 GW in 2024, reflecting sustained industrial and residential consumption.
• DAM power prices averaged Rs.3.75/unitin Q4 FY 2025-2026, down from Rs.4.30/unit in Q4 FY 2024-2025 but above Rs.3.33/unit in the preceding quarter.
• The Indian coal index rose 8%from March 2025 and 9% from December 2025, driven by import supply disruptions; the government of India approved an "INR 37,500 crore incentive scheme for coal gasification projects" to reduce LNG, methanol, and ammonia imports.
• The West Asia crisisis causing higher input costs and supply chain disruptions, with management expecting moderate impact on India's domestic consumption-driven economy.

Thermal Volumes Firming, PPA Visibility Improving

• Thermal power saleable units of ~375 Cr unitsin FY 2025-2026 with average realization >Rs.5/unit, underpinned by a mix of medium-term and merchant market sales.
• ~100 MW sold under medium-term PPAsin FY 2025-2026, with the balance placed in the short-term/merchant market; for FY 2026-2027, 200 MW has been contracted under medium-term PPAs, with supply from the most recent 100 MW starting in FY 2027-2028.
• Management noted the shift to medium-term PPAsprovides "much more visibility and stability in the realizations" compared to the volatile spot market, reducing earnings uncertainty.
• FY 2026-2027 saleable units expected at ~400 Cr unitsfrom the 600 MW thermal plant, described as "better than previous year" by management, driven by improved plant availability and efficiency.
• The 30 MW turbine is expected to be commissionedby end of June 2026 (Q1 FY 2026-2027), with no significant impact on overall production volumes anticipated.
• Cost-of-generation details were not disclosedduring the call; management offered to share the data offline with analysts.

Rs.500–700 Cr Annual Capex Backed by Multi-Project Pipeline

• Annual capex guided at Rs.500–700 Crfor FY 2026-2027, excluding the 600 MW IPP expansion; an additional Rs.500–700 Cr over FY 2026-2027 and FY 2027-2028 is planned for power plants excluding the SKS project.
• SKS Power has seen Rs.140+ Cr of capex to date, with another Rs.150 Cr planned over the next two years (through FY 2027-2028) to improve PLF and further boost EBITDA from the existing asset.
• The 600 MW IPP expansion is now expected operational in FY 2030-2031, primarily due to long equipment supply lead times and delays in environmental clearances, as capital equipment suppliers in India are fully booked.
• SKS Power capacity doubling is targeted for commissioning by FY 2030-2031— management stated "doubling of SKS Power capacity is targeted for commissioning by FY2030–31, pending environmental clearance renewal from MOEF."
• A new pellet plant in the steel divisionis planned, driven by iron ore mines opening in Chhattisgarh over the next 2–2.5 years; environmental clearance and land/water are already in place.
• The SKS expansion project has received board approval "in principle,"but a definitive investment amount has not been provided; management stated it will be finalized once the project configuration is determined and presented to the board.

Hydro, Solar and Structural Options Under Review

• Management is exploring a separation of the renewable energy business(not the entire power business), though no final decision has been made; the move signals potential value-unlocking for green assets.
• Three small hydro projects in Chhattisgarhare likely 3–4 years away from commissioning, forming part of the company's green power buildout.
• The Khursipar hydropower projecthas obtained forest clearance with DPR finalization underway; construction is expected to start by end of FY 2026-2027 and complete in 3–4 years.
• A solar plant is expected to be commissioned by September 2026, contributing to FY 2026-2027 top-line growth alongside the Rehar power plant and 30 MW TG set restart.
• Management is evaluating coal gasification opportunitiesfollowing the government's INR 37,500 Cr incentive scheme, but no decision has yet been taken on pursuing specific projects.
• Visible progress continues in growth initiativeswhile the company pursues green power opportunities to strengthen its future-ready portfolio, per management's commentary.

Steady Execution with Disciplined Deployment of Surplus Cash

• FY 2026-2027 top-line driversinclude full-year availability of the Rehar power plant, efficiency improvements in the IPP, commissioning of a solar plant by September 2026, and restart of the 30 MW TG set.
• FY 2027-2028 top-line driversinclude the Jhabua coal mine becoming operational and the Mool project contributing to the bottom line as it reaches full capacity.
• Management believes steel and ferroalloy prices have bottomed outbut noted dependence on global demand and Middle East peace dynamics; Chinese dumping has been limited recently due to safeguard measures in India.
• Long steel product prices are expected to trend upwardonce a US–Iran deal is struck and infrastructure rebuilding begins, though Q1 FY 2026-2027 realizations remain difficult to predict given volatility.
• Liquidity stood at Rs.2,400 Cr as of March 2026(end of FY 2025-2026); the acquisition of Godavari Power shares was ~1% of this amount, part of normal treasury operations and described by management as not meaningful.
• The real estate JV is immaterialat an estimated investment of Rs.25 Cr, aimed at adding value to the company's land bank; domestic coal sales were minimal at 150 (likely thousand tonnes) in FY26 as most coal is captively consumed.
• NMDC and OMC have reduced iron ore priceswhile coal indexes have risen 7–8%, suggesting possible moderation in end-product margins for the steel segment.