Vardhman Special Steels Limited reported a 107% surge in net profit to ₹41.19 crore for Q1FY27, driven by strong demand and operational efficiencies. During the subsequent earnings call held on July 23, 2026, management outlined a strategic roadmap to enhance margins through capacity expansion and diversification into high-value non-automotive steel segments.

Financial Performance and Operational Updates

The company’s revenue from operations grew 12% year-on-year to ₹486.01 crore, supported by a 6.5% increase in sales volumes to 59,103 tonnes. EBITDA rose sharply to ₹68.29 crore from ₹39.33 crore in Q1FY26. Management clarified that the reported EBITDA includes income from surplus funds deployed in money markets; excluding this, the operational EBITDA per tonne stands at ₹10,700.

*Including other income

Capacity Expansion and New Projects

Sachit Jain, Chairman & Managing Director, stated that the company has applied to the Environment Ministry for approval to increase melting capacity from 300,000 to 360,000 tonnes. Approval is expected within three to four months. Additionally, a new reheating furnace has been stabilized, and new non-destructive testing (NDT) and peeling lines are scheduled for commissioning by September–October 2026, which will remove current production bottlenecks.

A major greenfield project—a 500,000-tonne steel plant—is in its final stages of land and machinery finalization, with commissioning targeted for FY29-30. Jain noted that the project scope is expanding to include more testing lines, potentially increasing costs but also capacity. The forging unit joint venture with Aichi Steel, Japan, is progressing on schedule with project costs expected to be lower than initially estimated due to better negotiations and local equipment substitution.

Strategic Diversification and Margin Outlook

Management highlighted a shift towards non-automotive steel products, including die steels and railway axles, to create a second engine of growth. Ingot casting facilities for die steels are expected to be ready by Q3FY27, with regular production anticipated in FY28. Currently, exports account for only 6–7% of direct sales, with indirect exports via Aichi adding another 5%. Total export exposure is capped at approximately 10%.

Looking ahead, Jain revised the EBITDA per tonne guidance for FY28 upwards from ₹8,000–₹11,000 to ₹8,000–₹12,000. This improvement is attributed to spreading fixed costs over higher volumes, reduced job work, and operational efficiencies. A planned 50% expansion in solar power capacity within 1.5 years will further reduce energy costs and carbon footprint, strengthening the company’s position for European exports.

Regulatory Disclosures

The Board of Directors approved the unaudited financial results for the quarter ended June 30, 2026, on July 22, 2026. The company filed relevant disclosures with BSE Limited and the National Stock Exchange of India Ltd in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The earnings conference call transcript was subsequently filed on July 29, 2026.

Vardhman Special Steels Limited company name laid the foundation stone for a state-of-the-art forging facility in Ludhiana, Punjab, on July 27, 2026, marking a strategic expansion into high-value precision-forged automotive components. The company committed a total investment of ₹1,116 crore across two phases for the project located at Village Mangarh, Kohara, Chandigarh Road. This move represents VSSL’s forward integration strategy, leveraging a long-standing partnership with Aichi Steel Corporation, Japan, to manufacture Ring Gears and other precision parts for leading Original Equipment Manufacturers (OEMs) in India and international markets including Europe, ASEAN, Africa, and Mexico.

The ceremony was attended by S. Bhagwant Singh Mann, Chief Minister of Punjab, underscoring the state government’s support for advanced manufacturing initiatives. VSSL disclosed the development pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The expansion aligns with the Government of India’s vision for strengthening domestic manufacturing capabilities and promoting technology transfer. By integrating special steel manufacturing with precision forging, VSSL aims to enhance supply reliability and product quality for global automotive clients.

Project Phasing and Timeline

The ₹1,116 crore investment will be executed in two phases based on customer demand and business growth. The first phase involves establishing one forging line along with a Non-Destructive Testing (NDT) line. Management has targeted the commissioning of this initial forging line by March 2028. A second forging line will be added in the subsequent phase. The total project is expected to generate direct employment for more than 300 people, further strengthening Punjab’s automotive manufacturing ecosystem.

Strategic Partnership and Technology Transfer

The facility leverages Aichi Steel’s advanced rolling mill forging technology and manufacturing expertise. This collaboration allows VSSL to offer comprehensive solutions to automotive OEMs, moving up the value chain from raw special steel production to finished precision components. Key customers served by VSSL include Toyota, Maruti, Hyundai, Hero Moto Corp, Caterpillar, Hino Motors, and Bajaj. The company also caters to international markets in Thailand, Taiwan, Turkey, Italy, Russia, Germany, Vietnam, and Japan.

Sachit Jain, Chairman & Managing Director of Vardhman Special Steels Limited, stated that the project transforms VSSL into an integrated supplier of special steels and precision-forged components. He emphasized that combining metallurgical expertise with Aichi Steel’s technology aims to deliver world-class products at globally competitive costs. Iwao Shimamoto, President of Kitaeru Company, ASC, highlighted the mutual trust and shared commitment to long-term growth, noting that the joint manufacturing system will be founded on safety, superior quality, and operational excellence.

What the Numbers Show

The commitment of ₹1,116 crore for a greenfield forging facility signals a significant capital allocation towards value-added products rather than volume-based steel production. With the first line targeting commissioning in March 2028, the company is positioning itself to capture demand from both domestic OEMs and export markets. The phased approach mitigates execution risk while allowing capacity scaling aligned with actual order inflows. The generation of over 300 direct jobs also reflects the labor-intensive nature of precision forging compared to upstream steelmaking, potentially impacting local employment dynamics in the Ludhiana industrial cluster.