Rathi Steel & Power Limited has secured a significant legal victory with the Allahabad High Court staying GST recovery proceedings against the company. The court order, dated February 27, 2026, provides relief to the steel manufacturer in a substantial tax dispute involving INR 5.73 crore.

Court Order Details

The Hon'ble Allahabad High Court issued the stay order in response to a writ petition filed by Rathi Steel and Power Limited. The order specifically halts recovery proceedings that were initiated by the Office of the Deputy Commissioner, Ghaziabad, Uttar Pradesh under Section 74 of the GST Act, 2017.

Nature of Alleged Violations

The GST demand stems from alleged issues related to compliance requirements under the goods and services tax framework. The violations cited by the tax authorities include:

• Issues related to E-Way Bills
• Availment of ineligible Input Tax Credit
• Excess Input Tax Credit claims

These allegations fall under the purview of Section 74 of the GST Act, 2017, which deals with determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized.

Financial Impact Assessment

Rathi Steel and Power Limited has disclosed that the court's stay order will not materially impact the company's operations. The management has stated that there will be no material impact on the financial operation or other activities of the company, providing reassurance to stakeholders about business continuity.

Regulatory Compliance

The disclosure was made under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in compliance with sub para 20 of Para A of Part A of Schedule III. This follows the company's earlier disclosure dated December 30, 2025, indicating ongoing legal proceedings in this matter.

The stay order provides temporary relief to the company while the substantive legal issues are resolved through the judicial process. This development allows Rathi Steel and Power Limited to continue its operations without the immediate pressure of GST recovery proceedings.

Rathi Steel & Power Limited has delivered impressive financial results for Q3FY26, showcasing strong operational performance and continued recovery momentum. The company presented its unaudited financial results to analysts on February 18, 2026, highlighting significant growth across key financial parameters.

Strong Revenue Growth Drives Performance

The company's financial performance for Q3FY26 demonstrated robust growth momentum with total income reaching ₹160.09 crore, representing a substantial increase of 50.97% compared to ₹106.04 crore in Q3FY25. Operating income formed the major component, rising from ₹104.43 crore to ₹160.02 crore year-on-year.

Profitability Shows Remarkable Improvement

The company's bottom-line performance exhibited exceptional growth with PAT surging 262.33% to ₹1.91 crore from ₹0.53 crore in Q3FY25. EBITDA strengthened by 38.17% to ₹6.41 crore compared to ₹4.64 crore in the corresponding quarter last year. For nine months FY26, total income reached ₹472 crore, reflecting 32.67% growth over the corresponding period last year, with EBITDA at ₹19 crore, up 16.96%.

Management Commentary on Operational Excellence

During the earnings conference call held on February 18, 2026, President Rajesh Jain highlighted the company's technological differentiators and strategic positioning. The company operates an integrated facility in Ghaziabad with steel melting capacity of around 85,000 tons per annum and rolling capacity of 200,000 tons per annum. Current capacity utilization stands at 60% to 65%, with plans to increase it to 80% to 85%.

Strong Market Position and Distribution Network

Management emphasized the company's strong market presence with around 300 dealers spread across Northern India. The company achieved its highest ever monthly sales of approximately ₹77.45 crore in January from the Ghaziabad facility. Rathi Steel maintains a diversified portfolio including Stainless Steel Billets, Wire Rods, Bright Bars, and TMT Bars, with focus on Fe 550D grade TMT bars for real estate developers across NCR.

Green Steel Initiative and Technology Focus

The company is advancing its green steel positioning through recycling-based circular steel making model, which significantly lowers carbon intensity compared to conventional primary routes. Management confirmed CBAM certification and application for GreenPro certification from CII, expected in the current quarter. The company is implementing direct billet charging technology for TMT mill operations, similar to its existing stainless steel operations.

Financial Transformation and Debt Management

The company has successfully completed a comprehensive financial transformation, with current gross debt at ₹43.50 crore. Management indicated significant reduction in borrowing costs compared to the debt restructuring period, with ongoing efforts to further reduce interest rates by approaching new lenders. Working capital cycle is maintained at 30-45 days for receivables and 25-35 days for inventory.

Growth Outlook and Strategic Direction

Management expressed confidence in achieving 20% CAGR growth, targeting to double turnover within the next five years. The company is focusing on consolidating existing business and maximizing capacity utilization before considering downstream expansion or acquisitions. With strengthened balance sheet and operational improvements, Rathi Steel is well-positioned to capitalize on India's infrastructure expansion and sustainable industrial growth.