Vardhman Special Steels Limited , a prominent player in the steel industry, has released its financial results for the first quarter, showcasing a mixed performance with revenue growth accompanied by a decline in profitability.

Revenue Growth

The company reported a 4.56% year-on-year increase in revenue from operations, reaching Rs 43,369.85 lakhs, compared to Rs 41,477.99 lakhs in the same quarter of the previous year. This growth indicates a positive trend in the company's sales and market presence.

Profit Decline

Despite the revenue growth, Vardhman Special Steels experienced a decrease in net profit. The company's net profit after tax stood at Rs 1,989.51 lakhs, down 23.71% from Rs 2,607.82 lakhs in the corresponding quarter of the previous year. This decline in profitability suggests challenges in managing costs or maintaining margins during the quarter.

Financial Highlights

Other Key Points

• The company's total income, including other income, reached Rs 44,119.59 lakhs, up from Rs 42,045.22 lakhs in the corresponding quarter of the previous year.
• Earnings per share (EPS) decreased to Rs 2.43 from Rs 3.20 year-over-year, reflecting the impact of reduced profitability on shareholder returns.
• Vardhman Special Steels received government incentives of Rs 671.30 lakhs under the Industrial and Business Development Policy 2017 of the State Government, which were recorded under 'Other income'.

Strategic Developments

In a significant move to strengthen its position, Vardhman Special Steels completed a preferential allotment of shares to Aichi Steel Corporation (ASC) on July 4. This transaction resulted in ASC increasing its shareholding from 11.33% to 24.90% of the company's issued and paid-up equity share capital, with an investment of Rs 384.91 crore.

Industry Outlook

The steel industry continues to face challenges, including fluctuating raw material costs and market demand. Vardhman Special Steels' ability to grow its revenue in this environment demonstrates its resilience, though the pressure on profitability highlights the ongoing challenges in the sector.

Investors and stakeholders will be watching closely to see how the company navigates these challenges and leverages its strategic partnerships to drive growth and improve profitability in the coming quarters.

Vardhman Special Steels Limited (VSSL) has announced significant amendments to its solar power project agreements with ASG HOLDCO BETA PTE. LTD. and Sone Solar Private Limited, effective from April 1, 2025. The revisions aim to optimize the 55 MW DC solar capacity project in Punjab, improving both operational efficiency and financial arrangements.

Key Amendments to Power Supply Agreement

The amended Power Supply and Offtake Agreement introduces two major changes:

1. Dividend Recovery Mechanism: Dividends received by VSSL from Sone Solar will now be recovered through an upward revision in power tariffs for subsequent months. This adjustment ensures a more dynamic pricing structure that reflects the project's financial performance.

2. Increased Energy Targets: Due to the installation of more efficient solar panels capable of higher power output, the contracted energy delivery targets have been revised upward. This modification is expected to result in increased power generation and potentially greater benefits for VSSL.

Revised Share Valuation Terms

The Amended Share Subscription and Shareholder's Agreement introduces new provisions for share valuation during Call or Put Option exercises:

• If the Fair Market Value (FMV) of shares exceeds the Face Value, VSSL will refund the excess amount to ASG HOLDCO BETA PTE. LTD., net of any tax liability.
• Conversely, if the FMV falls below the Face Value, ASG will compensate VSSL for the difference.

These adjustments aim to ensure fair valuation and risk-sharing between the parties involved.

Implications for Vardhman Special Steels

The amendments to these agreements signify VSSL's commitment to optimizing its renewable energy investments. By leveraging more efficient solar technology and implementing flexible financial terms, the company is positioning itself to potentially benefit from increased power generation while maintaining a balanced risk profile with its partners.

Corporate Governance Update

In a related development, VSSL has scheduled a Board of Directors meeting for July 25, 2025, to consider and approve the unaudited financial results for the quarter ended June 30, 2025. This meeting, announced in compliance with SEBI regulations, underscores the company's commitment to timely financial reporting and transparency.

As Vardhman Special Steels continues to refine its renewable energy strategy, these agreement amendments may contribute to the company's long-term sustainability goals and financial performance. Stakeholders will likely be keen to see how these changes impact the company's energy costs and overall operational efficiency in the coming quarters.