Steel Exchange India slashes FY27 volume target after doubling promise
Management guided 25-35% volume growth in June from a doubling target agreed in May, even as CRDA approval and reheating furnace create new capacity.
What's new
- FY27 volume growth guidance cut to 25-35% from doubling agreed in May.
- CRDA approval: first steel company approved for Amaravati capital project supply.
- Reheating furnace to commission in Q2 FY27, expanding billet capacity to 5 lakh tonnes.
- FY27 EBITDA target of ₹170-180 crore at 80-90% utilization.
Themes from the call
Demand
CRDA approval provides long-term demand visibility from ₹1 lakh crore public capex pipeline for Amaravati capital region.
Margins
Manufacturing EBITDA per tonne guided at ₹6,000-7,000 with upside to ₹10,000, but price volatility remains a risk (realizations ₹52,000-53,000).
Capital allocation
₹105 crore of IMR investment received, ₹60 crore deployed to debt reduction; working capital limits raised to ₹100 crore.
Guidance watch
- FY27 volume growth guidance: 25-35% year-on-year, down from earlier doubling indication.
- EBITDA target: ₹170-180 crore for FY27 at 80-90% capacity utilization.
Risk flags
- Volume guidance reversal without explanation raises credibility concern.
- Working capital stress: limits increased from ₹50 crore to ₹100 crore; refinancing in progress.
- Execution risk on reheating furnace commissioning and ramp to 80-90% utilization.
Key quotes
-
"So that is for the full year, FY27, we are saying we'll double the volumes."
— Prateek Shrivastava, analyst in May 2026 call -
"On both sides, the expected volume growth will be between 25% and 35%, depending on seasonality."
— Bandi Suresh Kumar, confirmed by management in Jun 2026 call
The brief
Steel Exchange India's management told analysts in May that FY27 volumes would double. Five weeks later, on the June earnings call, they guided for just 25-35% growth. The reversal is stark, and no explanation was offered for the gap. The timing is awkward because the company has real positives: it is the first steel supplier approved for the Amaravati capital region, a ₹1 lakh crore public works pipeline. A new reheating furnace due in Q2 will unlock 5 lakh tonnes of billet capacity, and the EBITDA target of ₹170-180 crore at 80-90% utilisation is ambitious but grounded in the new capacity. Yet the guidance cut dominates. It suggests either the earlier doubling was a slip, or execution risk has materialised fast. Working capital limits have doubled to ₹100 crore, refinancing is still in progress, and the company acknowledges 20+ years of turmoil. The IMR investment of ₹105 crore helps, but full integration benefits are not yet visible. Management's tone is cautiously optimistic, but the inconsistency makes it hard to underwrite volume or profit projections. The Amaravati and green steel opportunities are real, but this guidance flip erodes the trust needed to give them full credit. Steel Exchange India must demonstrate delivery in the coming quarters — not just promise it.
The Amaravati opportunity is real, but a guidance flip this size erodes trust. Delivery will matter more than promises.