Rathi Steel & Power Ltd. (RATHIST) — Tipsheet

Rathi Steel slashes cost savings guidance by 99%, cancels expansion plans

Tipsheet Editorial — Mon, 29 Jun 2026 13:50:29 GMT

In a concall, management cut expected hot charging savings from ₹3,000-4,000 per ton to ₹1.5-2 per ton and said no expansion beyond maintenance. FY26 revenue up 42% but utilisation at 50-55%.

What’s new

Cost savings from hot charging slashed from ₹3,000-4,000 per ton to just ₹1.5-2 per ton.
Capacity expansion plans reversed; only maintenance capex now.
FY26 total income ₹716 crore, up 42% YoY; capacity utilisation 50-55%.

Why it matters

The 99%+ cut in the cost-saving estimate severely damages management's credibility on what was a key growth narrative. With expansion shelved and utilisation low, the 20% CAGR target hinges entirely on market conditions, not internal drivers.

What we’re watching

Whether management can explain the basis of the original ₹3,000-4,000 per ton guidance.
Any improvement in utilisation from the current 50-55% level.
If negative working capital trends reverse as debt pressures ease.

The full read

Three weeks ago, Rathi Steel told investors that its new hot charging technology would save ₹3,000-4,000 per ton. In Tuesday's concall, that figure dropped to ₹1.5-2 per ton. A near-total wipeout with no explanation. The same call scrapped earlier capacity expansion plans, leaving only maintenance capex. FY26 revenue hit ₹716 crore (up 42% YoY), but capacity utilisation is stuck at 50-55% and working capital remains negative. Management still targets a 20% CAGR over 2-3 years, but the two pillars supporting that narrative, cost savings and expansion, have both collapsed. Hardly a growth story. For a ₹163 crore market-cap stock trading at 12.7x trailing earnings, the concall didn't just revise numbers. It retracted the story.

Primary source: BSE · NSE

Rathi Steel skips the furnace in a hot-charging trial at Ghaziabad

Tipsheet Editorial — Sat, 06 Jun 2026 18:15:00 GMT

Billets went straight from the caster to the TMT mill, cutting a fuel-heavy step. The company has previously estimated this saves ₹3,000-4,000 per ton.

What’s new

Rathi completed a hot-charging trial, sending billets directly from the continuous caster to its TMT bar mill.
The trial successfully produced high-strength, seismic-resistant Fe 550D grade rebars.
The process cuts fuel consumption and scale loss, which the company says lowers production costs and carbon emissions.

Why it matters

The trial eliminates a costly reheating step. For a nano-cap steelmaker, the prior guidance of ₹3,000-4,000 per ton in savings is a material margin lever. The proof of concept is now established at its plant.

What we’re watching

Whether hot charging moves from a successful trial to standard, continuous operation.
The actual, verified cost savings per ton once running at scale.
Any customer orders secured for the Fe 550D rebars produced this way.

The full read

Rathi Steel has moved billets straight from the continuous caster to its TMT mill in a hot-charging trial at Ghaziabad. The process eliminates a reheating step, cutting fuel use and scale loss. The trial produced Fe 550D grade rebars, a high-strength product used in seismic-resistant construction. The company has previously cited direct-charging savings of ₹3,000-4,000 per ton. That figure matters. For a nano-cap steelmaker, it represents a direct hit to the cost base. The trial proves the technology works at Rathi's plant. The open question is whether it can be sustained continuously, and what the real, per-ton savings will be once the process runs at scale. Not yet. Hardly a done deal. But the first box is ticked.

Primary source: BSE · NSE

Rathi Steel's melting shop is running at half capacity, not the 80% it promised.

Tipsheet Editorial — Wed, 03 Jun 2026 17:07:07 GMT

Revenue surged 41.7% in FY26, but the steel mill that drove it is only 50-52% utilized, well short of the earlier 80% target.

What’s new

FY26 revenue grew 41.7% to ₹716 crore, driven by a restart in TMT bar production in April 2025.
Steel melting shop utilization fell to 50-52%, far below the previously guided 80% target.
Company expects ₹4,000/ton cost savings from new direct charging technology.

Why it matters

The top-line story is strong, but the operational reality is softer. A melting shop running at half capacity while management had guided 80% is a credibility gap that questions the quality of the growth and the timeline for margin benefits from new technology.

What we’re watching

Management's next update on closing the 50-52% vs 80% utilization gap.
Whether the ₹4,000/ton cost savings materialize as the new technology comes online.
The pace of the pivot to premium green-certified steel products.

The full read

Rathi Steel & Power grew revenue 41.7% in FY26 to ₹716 crore, a jump fueled by restarting its TMT bar mill last April. The concall, however, reveals the story beneath that headline is more complicated. The core steel melting shop is running at just 50-52% utilization, a level management itself contrasted against an earlier 80% target. Execution challenges have stalled the ramp-up. The company is betting on a new direct charging technology to save ₹4,000 per ton and a pivot to premium green-certified steel for better margins, but neither is proven yet at scale. Management also sidestepped specific margin guidance, focusing on volume recovery instead. For a nano-cap, the granular operational data is telling: strong topline growth is masking an underutilized asset base, and the path to the promised cost savings is not yet clear.

Primary source: BSE · NSE