Financial Performance and Operational Efficiency
Vardhman Special Steels reported a robust start to the fiscal year 2026-27, with revenue reaching ₹486.01 crore. The substantial increase in net profit to ₹41.19 crore was attributed to a combination of higher sales volumes and successful price revisions with automotive original equipment manufacturers. The company’s EBITDA per ton of ₹10,760 exceeded historical averages, supported by lower operating costs and the stabilization of the new reheating furnace.
Management noted that higher production levels helped spread fixed costs more efficiently, resulting in positive operating leverage across the business.
Expansion and Strategic Diversification
The company is currently facing capacity constraints, operating at its license limit of 3 lakh tons per annum. To address this, an application has been submitted to the Environment Ministry to increase capacity to 3.6 lakh tons. Beyond its core automotive segment, Vardhman is diversifying into high-margin areas such as die steels, railways, and aerospace.
The company expects its ingot casting facility for die steels to be ready by the third quarter of FY27, targeting an import substitution market estimated at ₹1,000 crore in India.
Future Outlook and Capital Projects
- A new greenfield steel plant with a capacity of 5 lakh tons is on track for commissioning by the end of FY29-30.
- The forging project with Aichi Steel is expected to be commissioned by the final quarter of FY27-28.
- Management plans to enhance solar power capacity by 50% within the next 18 months to further reduce energy costs.
- New NDT and peeling lines are scheduled for commissioning by September-October 2026 to eliminate production bottlenecks.
Management Perspective on Demand
We are completely booked out and we are refusing orders. I mean, we call it a strong order book or visibility, we are currently having trouble meeting the requirements of our customers. So, demand is very strong.
