Vardhman Special Steels Q4 FY26 Results: Profit Surges 72%, Raises EBITDA Guidance
Vardhman Special Steels Limited reported exceptional Q4 FY26 performance with net profit increasing 72.20% year-on-year to ₹3,397.94 lakh, while total income from operations grew 7.61% to ₹46,837.21 lakh. For FY26, the company achieved record net profit of ₹12,202.39 lakh on total income of ₹179,677.91 lakh, with volumes reaching 225,000 tons. Management has raised EBITDA per ton guidance to ₹8,000-₹11,000 for FY27 and further to ₹9,000-₹12,000 over the next two years, targeting rolled product volumes of 250,000-255,000 tons. The company is pursuing significant expansion plans including a new greenfield steel plant (500,000-600,000 tons capacity by July 2029), a forging plant (commissioning January-March 2028), and brownfield expansion to increase melting capacity from 300,000 to 360,000 tons. Total committed capex stands at approximately ₹2,600 crores, with funding planned through a mix of equity infusion (₹1,200 crores) and debt (₹1,200 crores). The Board has recommended a dividend of ₹3.50 per share.
*this image is generated using AI for illustrative purposes only.
Vardhman Special Steels Limited has published its audited financial results for the quarter and year ended March 31, 2026, pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The results were reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on April 28, 2026.
Q4 FY26 Financial Performance
The fourth quarter demonstrated exceptional growth with net profit after tax increasing 72.20% year-on-year to ₹3,397.94 lakh (₹33.98 crore) from ₹1,973.21 lakh (₹19.73 crore) in Q4 FY25. Total income from operations for Q4 FY26 reached ₹46,837.21 lakh (₹468.37 crore) compared to ₹43,522.26 lakh (₹435.22 crore) in the corresponding quarter of the previous year, representing a 7.61% increase.
| Q4 Performance | Q4 FY26 (₹ lakh) | Q4 FY25 (₹ lakh) | Change (%) |
|---|---|---|---|
| Total Income from Operations | 46,837.21 | 43,522.26 | +7.61% |
| Net Profit Before Tax | 4,598.75 | 2,685.47 | +71.25% |
| Net Profit After Tax | 3,397.94 | 1,973.21 | +72.20% |
| Basic EPS (₹) | 3.52 | 2.42 | +45.45% |
FY26 Annual Performance
The company delivered robust annual performance with significant improvements across key financial metrics. Total income from operations for FY26 stood at ₹179,677.91 lakh (₹1,796.78 crore) compared to ₹179,352.31 lakh (₹1,793.52 crore) in the previous year. Net profit for the year increased 31.08% to ₹12,202.39 lakh (₹122.02 crore) from ₹9,308.81 lakh (₹93.09 crore) in FY25.
| Financial Metric | FY26 (₹ lakh) | FY25 (₹ lakh) | Change (%) |
|---|---|---|---|
| Total Income from Operations | 179,677.91 | 179,352.31 | +0.18% |
| Net Profit Before Tax | 16,404.94 | 12,506.06 | +31.17% |
| Net Profit After Tax | 12,202.39 | 9,308.81 | +31.08% |
| Paid-up Equity Capital | 9,668.57 | 8,173.33 | +18.31% |
| Basic EPS (₹) | 13.15 | 11.40 | +15.35% |
Management Guidance and Expansion Plans
During the earnings conference call held on April 29, 2026, Chairman and Managing Director Sachit Jain outlined the company's strategic vision and future growth plans. The company achieved record volumes of 225,000 tons in FY26, meeting its budget target. For FY27, management targets rolled product volumes of 250,000 tons to 255,000 tons.
The company has raised its EBITDA per ton guidance to ₹8,000 to ₹11,000 for the current year, up from the previous range of ₹7,000 to ₹10,000. Management further expects to increase this range to ₹9,000 to ₹12,000 over the next two years, driven by volume growth, cost efficiency, and process improvements.
Capital Expenditure and Capacity Expansion
Several key projects were commissioned in March 2026, including a reheating furnace that will improve rolling capacity to 270,000 tons of finished product and a solar plant that will generate 9 crore units of power annually. A new section of 210X210 has been introduced to improve productivity and product quality.
The company is pursuing environmental approval to increase melting production capacity from 300,000 tons to 360,000 tons. The application is expected to be submitted by June 2026, with a decision anticipated by March 2027. The brownfield expansion could be completed by the latter part of calendar year 2027.
Major upcoming projects include a new greenfield steel plant with capacity of 500,000 to 600,000 tons, targeted for commissioning by July 2029, and a forging plant expected to commence operations in January-March 2028. Total committed capex stands at approximately ₹2,600 crores.
Share Capital and Reserves
The company's paid-up equity capital stood at ₹9,668.57 lakh (₹96.69 crore) as of March 31, 2026, compared to ₹8,173.33 lakh (₹81.73 crore) in the previous year, reflecting an 18.31% increase. Other equity reserves increased significantly to ₹118,063.41 lakh (₹1,180.63 crore) from ₹71,618.49 lakh (₹716.18 crore) in FY25. The Board recommended a dividend of ₹3.50 per share on fully paid-up equity shares, subject to approval at the Annual General Meeting.
Strategic Direction
Management outlined plans to diversify the special steels portfolio into non-automotive segments over the next decade, targeting a 30% non-automotive and 70% automotive mix. New focus areas include railways, oil and gas, bearings, windmill shafts, ship shafts, and advanced materials for aerospace, defence, and nuclear applications. The company aims to position itself as a "supermarket of special steels" while maintaining focus exclusively on special steels and automotive forgings.
Historical Stock Returns for Vardhman Special Steels
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.42% | -2.35% | +0.60% | -2.44% | +3.74% | +174.85% |
How will Vardhman Special Steels manage the ~₹11 crore reduction in Punjab government subsidies in FY27 without impacting its revised EBITDA per ton guidance of ₹8,000–₹11,000?
Given the peak capex of ₹700–₹800 crores expected in FY27-28, what credit rating implications could arise, and how might lenders respond to the company's debt-to-equity targets amid rising interest rate uncertainties?
How quickly can Vardhman ramp up its non-automotive special steel portfolio to meet the targeted 30% revenue mix within a decade, particularly in high-barrier segments like aerospace, defence, and nuclear applications?
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