Sarda Energy & Minerals (504614) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 delivered record consolidated revenue and profit, driven by higher energy prices, increased hydropower generation, and the SKS Power acquisition, with energy now contributing a larger share to earnings and EBITDA.

• Operational efficiency at the IPP thermal power plant improved PLF to 90.21%, and the plant ranked 15th in the Central Electricity Authority's list.

• Strategic focus on expanding energy and mineral assets, with significant investments in renewable and thermal power, and backward integration to reduce input costs.

• Strong ESG initiatives, including waste-to-wealth projects, transition to EVs, and a robust CSR program supporting health, education, and sustainability.

• Results include the impact of the SKS Power Generation acquisition, making year-over-year comparisons less meaningful.

Financial highlights

• Consolidated revenue reached ₹1,633 crore in Q1 FY26, up 76% YoY and 32% QoQ; EBITDA up 108% to ₹697 crore; PAT up 120% to ₹437 crore; EBITDA margin improved to 40.7%.

• Standalone revenue for Q1 FY26 was ₹1,307 crore, up 97% YoY; standalone EBITDA up 134% to ₹596 crore; PAT up 113% to ₹386 crore.

• Cash profit for Q1 FY26 at ₹642 crore, up 161% YoY.

• Net consolidated debt reduced to ₹1,000 crore from ₹1,600 crore; liquidity remains strong with ₹1,700 crore in cash and liquid investments.

• Earnings per share (consolidated, basic and diluted) for Q1 FY26 was ₹12.33.

Outlook and guidance

• Energy division expected to be the major EBITDA contributor from FY26 onwards, with potential to double IPP Binjkot (SKS Power) capacity.

• Power segment guidance is for 80% PLF annually; hydropower expected to operate at 40-45% PLF.

• Margins are expected to sustain or improve, subject to market conditions and input prices.

• Q2 is expected to see improved steel pricing and demand post-monsoon, with hydro generation supporting results.

• Annual power generation guidance is 450 crore units, with EBITDA per unit at INR 2 plus/minus 0.50, targeting over INR 1,000 crore EBITDA for the segment.