Sambhav Steel Tubes Limited has signed a significant Memorandum of Understanding with the Ministry of Steel, Government of India, marking its entry into the Production Linked Incentive (PLI) Scheme 1.2 for Specialty Steel. The agreement, executed on February 09, 2026, involves both the parent company and its wholly owned subsidiary, Sambhav Tubes Private Limited, with a combined investment commitment of ₹361.75 crores.

Investment Details and Capacity Expansion

The MOU encompasses two distinct manufacturing projects with substantial capacity additions. The parent company has committed to establishing facilities for manufacturing thin precision gauge stainless steel sheets, while the subsidiary will focus on alloy steel including stainless steel rolled long products.

Implementation Timeline and Objectives

The investment is strategically planned across three financial years from 2025-26 to 2027-28. This phased approach will enable the company to establish, expand, and augment manufacturing facilities systematically while achieving projected production targets. The initiative aligns with the government's Production Linked Incentive Scheme designed to boost specialty steel manufacturing capabilities in India.

Regulatory Compliance and Disclosure

The company has fulfilled all regulatory requirements under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure confirms that the transaction does not fall within related party transactions and involves no shareholding arrangements with the Ministry of Steel. The agreement does not grant any special rights such as director appointments or share subscription preferences.

Strategic Significance

This MOU represents a significant step in Sambhav Steel Tubes' expansion strategy, positioning the company to benefit from government incentives while contributing to India's specialty steel production capacity. The focus on thin precision gauge stainless steel sheets and alloy steel products addresses critical segments in the specialty steel market, supporting both domestic demand and potential export opportunities.

Sambhv Steel Tubes Limited has delivered exceptional financial performance for Q3 and nine months FY26, with the company reporting its strongest-ever nine-month results. The company held its earnings conference call on February 2, 2026, following the release of comprehensive financial results and strategic updates.

Record Financial Performance

The company achieved remarkable growth across all key metrics during the nine-month period. Revenue surged 70% year-on-year to ₹1,728 crores, while EBITDA grew 73% to ₹184 crores. The company's profit after tax more than doubled to ₹88 crores, demonstrating strong operational efficiency.

For Q3FY26 specifically, the company reported revenue of ₹589 crores and EBITDA of ₹51 crores, reflecting robust growth of 60% and 34% respectively. PAT more than doubled to ₹24 crores on a year-on-year basis.

Capacity Expansion and Strategic Initiatives

The company has made significant progress on its expansion plans. Environmental clearance from MOEF Delhi has been received for the greenfield project at Kesda and Kuthrel Unit-II, with project execution already commenced. Under brownfield expansion, galvanized capacity has been increased to 1,16,000 tons per annum.

The company has executed four MOUs for stainless steel pipes manufacturing under co-branding arrangements, with several additional MOUs in progress. Management expects to achieve 50% of current coil sales through MOU holders, targeting 2,500 tons in the first phase.

Product Mix and Pricing Strategy

Value-added sales volume reached 2.6 lakh tons during the nine-month period, marking 60% growth. The stainless steel segment performed exceptionally well, with the company selling 13,400 tons in Q3FY26 at ₹13,000 EBITDA per ton.

The company is transitioning its product mix toward higher-margin value-added products, with stainless steel 300 series comprising 30% of the mix, targeting 50% in Q4FY26.

Market Challenges and Recovery Outlook

Q3FY26 faced temporary headwinds including a three-month government window for stainless steel imports, 6% decline in HR coil prices, and 15-day maintenance shutdown for galvanizing capacity expansion. However, management expects significant recovery in Q4FY26.

Government Support and Future Plans

The company received approval for PLI Scheme 2.0 for two product applications, with MOU details expected by the second week of February 2026. Management is also exploring stainless steel seamless tubes manufacturing through potential joint ventures or technological partnerships.

Financial Guidance and Debt Position

For FY26, the company targets EBITDA of upward of ₹260 crores and weighted average EBITDA per ton of ₹7,000. Total debt as of December 31, 2025, stood at ₹210 crores, comprising ₹40 crores in term loans and ₹170 crores in working capital loans. The greenfield expansion will be funded through ₹650 crores external debt and ₹300 crores internal accruals.