GPIL — earnings call
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Prepared remarks
“Godawari Power and Ispat Limited
POWER AND ISPAT LIMITED · MR. SANJAY BOTHRA – CHIEF FINANCIAL OFFICER –
MR. SANJAY BOTHRA – CHIEF FINANCIAL OFFICER – GODAWARI POWER AND ISPAT LIMITED
Moderator · Conference Operator
MS. SANA KAPOOR – GO INDIA ADVISORS Godawari Power and Ispat Limited November 17, 2025
Ladies and gentlemen, good day, and welcome to Godawari Power and Ispat Limited Q2 FY '26
POWER AND ISPAT LIMITED · MR. SANJAY BOTHRA – CHIEF FINANCIAL OFFICER –
Let me add one more point in this solar thing.
This 250-megawatt solar, if you compare with the rate of INR7 and net cost to the steel plant at about INR5.50, the internal rate of return is about 24%.
So it is a healthy investment.
Number two, if you want to do solar under group captive, then the point is that the land on which this project is proposed cannot be done under group captive because it has been allotted to Godawari Power, and it cannot be subleased to any other company.
So these are the two other factors for considering this 250-megawatt project on the balance sheet of GPIL.
Moderator · Conference Operator
The next question is from the line of Siddharth from Equirus Capital.
Siddharth
My first question is on the mining capacity.
Now with Ari Dongri going to 6 million tons, when do we expect the entire crushing beneficiation to come online, and we should be at that 6 million ton run rate on an annual basis?
Moderator · Conference Operator
The next question is from the line of Manav from Yes Securities Limited.
Manav
So first question is on the iron ore expansion at Ari Dongri.
Since you have already completed the public hearing and are expecting approvals by December, what sort of volume can we expect?
I mean, is there going to be any lag in the production once the ECs are in place?
Moderator · Conference Operator
The next question is from the line of Sahil Sanghvi from Monarch Networth Capital.
Sahil Sanghvi
My question is more on the BESS side.
I think we've heard announcements from Ola and Adani to enter this particular part of the project.
They will be doing something similar on this line.
How similar is what we are doing and what they are doing?
Would that be a lot of competition to handle for us?
Moderator · Conference Operator
The next question is from the line of Vinit Thakur from Plus91 Asset Management.
Vinit Thakur
I had a couple of questions regarding our -- so there is a sponge iron decline in production.
Are we utilizing it to make pellets and other stuff more?
Have we increased the capacity to utilize sponge iron ore?
Moderator · Conference Operator
Thank you.
The next question is from the line of Ashish Soni from Family Office.
Please go ahead.
Ashish Soni
Regarding BESS, you'll be supplying to utility grade, if I understand.
So have you already started partnership discussions with the developers who might be using this or bidding for this?
Moderator · Conference Operator
The next question is from the line of Siddharth from Equirus Capital.
Godawari Power and Ispat Limited November 17, 2025
Siddharth
One more question on the fundraise, the preference issue that we had done recently, any rationale behind that, that why did we do a preference issue?
POWER AND ISPAT LIMITED · MR. SANJAY BOTHRA – CHIEF FINANCIAL OFFICER –
Siddharth, there is no major rationale.
But if I have done a preferential issue, it shows that 50% or more than 50% of this is taken by the promoters.
Who else knows the business better than the promoters?
The promoters wanted additional liquidity in the company, and therefore, we have gone ahead with the preferential issue.
This money in case will be partially utilized for our upcoming projects.
This helps funding the project also without raising additional debt.
Siddharth
Anything that are we getting ready for the steel plant capex, and that is why we have done this capex in advance -- preferential issue...
POWER AND ISPAT LIMITED · MR. SANJAY BOTHRA – CHIEF FINANCIAL OFFICER –
The steel plant capex will be much larger.
This INR100 crores of preferential issue does not fund my entire steel plant project.
But definitely, this will help meeting requirements for BESS and CRM projects.
Siddharth
Incrementally, when we go ahead with the steel plant, will we require incremental fundraising, or should we be able to do it from the internal cash accruals now?
POWER AND ISPAT LIMITED · MR. SANJAY BOTHRA – CHIEF FINANCIAL OFFICER –
We will need to raise some debt definitely for the steel plant.
We will definitely raise the debt.
We'll see what is the equity availability we have and what is additionally required.
Siddharth
Sir, lastly, coming to our pellet volumes for 2H, given that NMDC has also taken a price cut, do we still believe that we should be able to maintain this range of pellet realizations going ahead?
Moderator · Conference Operator
The next question is from the line of Manav from Yes Securities.
Manav
Just building on Siddharth ji's question regarding 2 million ton pellets also coming into the market.
Are we looking at exports as a strategy sometime down the line just in case there's an overflow of pellets?
Moderator · Conference Operator
Ladies and gentlemen, that was the last question of today.
We have reached the end of the question- and-answer session.
I now hand the conference over to the management for the closing comments.
Over to you.
POWER AND ISPAT LIMITED · MR. SANJAY BOTHRA – CHIEF FINANCIAL OFFICER –
We would like to express our deep sense of appreciation for joining us on this call.
We are confident that we have been adequately able to answer all your queries.
Should you have any other further questions or need additional information, please feel free to reach out to our Investor Relations team at Go India Advisors.
Once again, we sincerely thank you for all your active participation and support.
Thank you very much.
With this, we conclude this call.
Moderator · Conference Operator
Thank you.
On behalf of Go India Advisors, that concludes this conference.
Thank you for joining us and you may now disconnect your lines.
Questions and answers
POWER AND ISPAT LIMITED · MR. SANJAY BOTHRA – CHIEF FINANCIAL OFFICER –
Thank you.
Good afternoon, everyone.
Thank you for joining us on this call today.
Our financial results, press release and earnings presentation are available on our website and on the stock exchanges.
I believe you have had a chance to review the same.
At the outset, we are deeply mourned and grieved by the unfortunate and unforeseen incident, which took place on 26th September '25 in one of our pellet plants in which six of our colleagues lost their lives and six others were injured.
Our heartfelt condolences to the families of the deceased colleagues.
May the departed souls rest in peace.
The company has provided financial assistance to the families of the deceased.
While no amount can ever compensate for the loss of life, our support goes far beyond the financial aid.
We remain committed to ensuring the long-term security of the families of the deceased employees through employment opportunities for eligible dependents, pension benefits for non-employable members in the family and uninterrupted education for children through reimbursement of school and education expenses.
Safeguarding their future is our highest responsibility, and we stand fully committed by the same.
Now coming to the GPIL performance, I'm pleased to state that H1 FY '26 has been a period of consistent performance with strong operational progress.
Revenue remained stable, supported by higher pellet and galvanized product volumes, while EBITDA and PAT margins stood healthy at 22% and 14%, respectively, despite soft realization across the product range.
On the operational performance front, GPIL is well on track to meet its FY '26 production target despite the loss of production of pellet for about 40 days due to the incident that took place on 26th September.
While the plant was closed, we took the opportunity to prepone the maintenance shutdown, which was in any case due in Q3 FY '26.
Godawari Power and Ispat Limited November 17, 2025 In H1 FY '26, production volume of iron ore mining, pellet, value-added steel products grew by 18% and 16%, respectively, despite the loss of production of 5 days in September.
Pellet sales rose 30%, while value-added steel products declined due to realization softness across the product, except ferro alloys and galvanized fabricated products.
In Q2 FY '26, production increased further by 23% -- 29% for the mining, 31% for the pellet and 5% for value-added products.
Pellet sales surged by 71%, whereas value-added steel products saw a decline.
The trend in realization remained similar, with only ferro alloys and galvanized products maintaining Y-o-Y stability.
Coming to the consolidated financial performance, in H1, sales turnover remained largely stable, supported by higher production and sale of pellet and galvanized products.
However, EBITDA and PAT were lower due to softer realization, even so, PAT and -- EBITDA and PAT margins remained robust at 22% and 14%, respectively.
In Q2 FY '26, revenue, EBITDA and PAT Y-o-Y declined, driven by higher sales volume of pellet and rolled products.
On a Q-o-Q basis, however, these metrics were lower owing to reduced realization and seasonal necklace for iron ore pellet and finished steel.
EBITDA and PAT margin continued to hold firm at 20% and 12%, respectively.
Overall, the financial performance of the company remains healthy and stable.
Let me now update you on other strategic growth plans of the company.
I'm pleased to inform you that we have been able to move forward on getting much-awaited regulatory approvals for expanding the capacity of Ari Dongri iron ore mines from 2.35 million tons to 6 million tons per annum, and we have successfully completed the public hearing for environmental approval.
The environmental approval is in the final stage now and expected by the end of December '25.
The 2 million ton pellet capacity expansion is progressing as planned.
The pre-commissioning trials are underway and commissioning is targeted by the end of November '25, which is awaiting consent to operate from the State Pollution Control Board.
The entire work for the commissioning of the project has been completed.
The land acquisition for the expansion of iron and steel capacity has been completed with 452 acres of land secured for the integrated steel plant and CRM complex.
The 0.7 million tons cold rolling mill complex project is progressing well with land acquisition completed and major equipment orders placed.
The total cost of project for CRM project is INR900 crores, of which INR600 crores is financed through debt and the balance remainder funded by internal accrual.
The company proposes to take up a 1 million ton integrated steel plant post iron ore mining capacity announcement.
The proposal for the same will be put up to the Board after the production on expanded mining capacity is started.
Godawari New Energy Private Limited, a wholly-owned subsidiary of GPIL, has planned to set up a 10 gigawatt battery energy storage system project in Maharashtra, for which land acquisition of 112 acres has already been completed.
The cost of the project is INR700 crores, which is proposed to be funded by a debt of 60% and balance from internal accrual out of equity contribution from GPIL.
Godawari Power and Ispat Limited November 17, 2025 GPIL has already infused equity contribution to the extent of INR175 crores, which has been utilized for land acquisition and other project-related expenses.
The Board in its last Board meeting has approved setting up an additional 250-megawatt solar power capacity in addition to the earlier announced capacity of 125 megawatts for captive use in the CRM project and integrated steel plant.
The project is expected to be commissioned by Q4 FY '27, coinciding with the commissioning of the CRM project.
The surplus power pending use in Boria Tibu and integrated steel plant, the company proposes to use power from the 250-megawatt solar for existing iron and steel operations by temporarily suspending thermal power generation.
Operations at Boria Tibu mine resumed in May '25 following approval of the updated mining plan.
Additionally, GPIL received PGCIL approval for the supply of steel billets for transmission-grade galvanized steel structures, recognition the high quality of GPIL billets now comparable to those of India's leading steel producers.
Notably, GPIL remains the only company in India to provide a fully integrated end-to-end solution for galvanized steel structure from iron ore to finished product.
Coming to the market outlook, global iron ore prices have largely moved within the $95 to $110 band this year and are currently at around $102, $103 a ton.
Weather-related supply disruption supported the prices in the first half, while higher supply in the second half may take further upside.
Geopolitical tensions continue to infuse global demand through China's recent stimulus measures, including direct cash transfer to boost consumption, should offer some support.
For calendar '25, iron ore prices in China are expected to remain in the range of $90 to $105.
The World Steel Association, however, projects China steel demand to decline by 2% in calendar '25 and 1% in '26 as the housing market stabilizes.
On the domestic front, iron ore prices, NMDC 64 AC fines have remained range-bound between INR4,500 to INR5,500 tons.
Pellet prices have also been stable around INR8,500 to INR10,000 band, currently at around INR9,750 a ton, and likely to follow a similar trend in H2.
Indian steel demand remains strong with the World Steel Association forecasting 9% growth both in FY '25 and '26, driven by sustained expansion across infrastructure and construction, supported by initiatives such as the National Infrastructure Pipeline, Pradhan Mantri Awas Yojana.
By '26, India's steel demand is expected to be nearly 75 million tons higher than as compared to 2020.
Taken together, our operational consistency, disciplined project execution and forward-looking investment highlight GPIL's readiness for the next phase of growth.
Backed by over four decades of industry experience, strong leadership and a committed workforce, the company stands on the foundation of strength and resilience going forward.
As we scale our mining and pellet capacities, strengthen downstream capabilities and deepen our renewable energy integration, we continue to build on a strong competitive position.
Our solid net cash position, strategic capex pipeline and strong ESG focus further support our long-term value creation efforts.
With efficiency gains and cost savings from the solar project, benefits of captive iron ore Godawari Power and Ispat Limited November 17, 2025 resources, GPIL is well-positioned to capture emerging opportunities and deliver sustainable value to all stakeholders.I would now like to open the floor for questions and answers.
Moderator · Conference Operator
The first question comes from the line of Vikash Singh from ICICI Securities.
Vikash Singh
Sir, first question regarding the pricing scenario.
So if you could you give us some idea of what the spot prices versus the 1Q averages?
And we have heard some price increase happening recently.
So could you just confirm the same?
And lastly, anything you have heard on the safeguard duty, which has -- provisional has been lapsed?