Sarthak Metals Reports 21% Revenue Decline in Q2FY26 Amid Steel Industry Challenges

Sarthak Metals Limited , a leading manufacturer of cored wires and aluminium flipping coils, reported a 21% year-on-year decline in revenue from operations to Rs 36.31 crore in the second quarter of fiscal year 2026. The company's total income decreased by 21% to Rs 36.48 crore, while EBITDA fell 15% to Rs 1.64 crore. However, EBITDA margin improved slightly to 4.53% from 4.21% in the same period last year.

Core Business Segments Face Headwinds

The company's core wire business volumes dropped 14% year-on-year, primarily due to challenges from subpar quality products and certain unfair practices in the industry. Sanjay Shah, Executive Director of Sarthak Metals, stated, "Despite strong steel demand driven by infrastructure projects and a resilient economy, Indian steel manufacturers continue to face pressure from low-cost imports. With prices hovering near a five-year low, future industry capex remains uncertain."

The aluminium flipping coil segment remained subdued during the quarter, impacted by unethical competition in the domestic market. As a result, the company consciously reduced its participation in this segment to safeguard profitability.

Welding Division Shows Promise

Despite challenges in its core segments, Sarthak Metals' welding division demonstrated strong performance. The division achieved average monthly volumes exceeding 100 tonnes in the September quarter, supported by healthy demand from the fabrication and construction sectors. Notably, the company recently received RDSO approval from Indian Railways, further reinforcing market confidence in its product quality.

Financial Performance

Metric	Q2 FY26	Q2 FY25	YoY Change
Revenue from Operations	36.31	45.72	-21%
Total Income	36.48	46.18	-21%
EBITDA	1.64	1.93	-15%
EBITDA Margin	4.53%	4.21%	+32 bps
PAT	0.76	0.83	-8%

Future Outlook and Initiatives

The company continues to develop its biotechnology initiative, engaging in discussions with ethanol distilleries to improve fermentation efficiency and promote cleaner ethanol production. This aligns with the government's fuel blending program and policy push for biofuels.

Sarthak Metals maintains its long-term vision of evolving from a steel consumables supplier into a diversified company with a strong presence across cored wire, welding consumables, and biotechnology sectors.

Mr. Shah concluded, "Our technological capabilities and deep industry experience have enabled us to hold our ground despite intense competition. Encouragingly, steel prices appear to have bottomed out, offering a sense of optimism for the coming quarters."

The company operates with a manufacturing capacity of 15,000 TPA for cored wires and serves major steel plants including Tata Steel. As the steel industry navigates through challenging times, Sarthak Metals remains focused on innovation and building multiple growth engines to create sustainable value and long-term resilience.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.02%	-2.96%	-10.45%	-21.60%	-38.91%	-6.92%

Sarthak Metals Limited , a player in the metal sector, has announced its financial results for the quarter ended September 30, 2025, along with significant strategic proposals that could reshape the company's future direction.

Financial Performance

For the quarter ended September 30, 2025, Sarthak Metals reported:

Metric	Q2 FY2026 (in lakhs)
Total Income	3,647.93
Profit After Tax	65.91

Strategic Initiatives

Proposed Business Diversification

In a notable move, the company's Board of Directors has proposed to amend its main object clause to include biotechnology business activities. This expansion would encompass:

Research and development
Manufacturing
Trading of biotechnological products
Enzymes
Bio-based chemicals
Pharmaceuticals and related products

The Board views this diversification as a strategic step towards aligning with global shifts towards sustainable and biology-driven industrial systems. The company believes that biotechnology may address dual challenges faced by industries today: reducing environmental footprint while maintaining profitability.

Board Reappointment

The Board has proposed the re-appointment of Mr. Sunil Dutt Bhatt as an Independent Director for a second five-year term, from August 2026 to August 2031. Mr. Bhatt, who has been on the company's board since August 2021, brings experience from his tenure at Bhilai Steel Plant, Steel Authority of India Limited.

Shareholder Approval Process

Both the biotechnology diversification and the director re-appointment proposals will be subject to shareholder approval through a postal ballot. The e-voting period for these resolutions is scheduled from November 13 to December 12, 2025.

Market Implications

These developments signal Sarthak Metals' intent to diversify beyond its traditional metal sector focus. The proposed entry into biotechnology, if approved, could open new revenue streams and position the company in a different sector.

Investors and market watchers will likely be keen to observe how this diversification strategy unfolds and its potential impact on the company's future growth trajectory and financial performance.

As Sarthak Metals considers this potential transformation, stakeholders will be watching closely to see how the company plans to balance its established metal business with the new biotechnology ventures, should the proposal receive shareholder approval.