Godawari Power and Ispat forecasts a stronger second half of the financial year as new initiatives, including a battery storage system, a cold rolling mill, and expanded mining, set to drive revenue and margins upward amid near-term challenges.
Godawari Power and Ispat told investors it expects a stronger second half to its financial year as a slate of new projects begins to feed through, with management pointing to higher revenue, firmer margins and a multi-year capital spending cycle centred on steel, power storage and mining. In its Q1 FY27 earnings call, hosted by Monarch Network Capital on August 10, the company said it is targeting revenue of more than ₹6,000 crore in FY27 and EBITDA margins of about 24% to 25%, while looking beyond that to growth through FY31 as expansion projects scale up.
The company’s plan includes a battery energy storage system, a cold rolling mill complex, added pellet capacity and a new steel plant, according to the transcript circulated by GuruFocus. Management also outlined a steel plant capital expenditure programme of about ₹7,000 crore, with the bulk of spending expected in FY28 and FY29. At the same time, it said mining expansion remains under way at the Ari Dongri and Boria Tibu mines, with output targeted to rise from 0.7 million tonnes to 4 million tonnes over the next three years.
The latest quarter was more subdued. LiveMint reported that for the quarter ended June 25, the company posted operating profit of ₹280.21 crore, down 0.85% from the previous quarter, while profit after tax fell 2.39% to ₹215.96 crore. Total income declined 9.87% quarter-on-quarter to ₹1,323.25 crore and the operating margin stood at 21.18%. That softer performance came against a backdrop of weaker realisations across key products, according to Arthneeti’s analysis of the company’s earlier earnings discussions.
Arthneeti also noted pressure from higher transport costs linked to diesel price increases and supply chain disruption, as well as a 10% softening in prices across parts of the supply chain in the first quarter. The report said merchant pellet players may face tighter margins because of their reliance on market purchases of iron ore. Against that backdrop, Godawari Power and Ispat is betting that a heavier investment cycle, together with additional mining and industrial capacity, will offset near-term weakness and support growth into the next few years.
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