💰 Financial Performance

Revenue Growth by Segment

Total revenue for Q2 FY2026 was INR 723.16 Cr, representing a 32.8% decline compared to INR 1,076.90 Cr in Q2 FY2025. For H1 FY2026, net sales reached INR 1,760 Cr. The decline is attributed to an extended monsoon season affecting construction activities.

Geographic Revenue Split

Not specifically disclosed in available documents, though the company operates primarily in India with a registered office in Hissar, Haryana and corporate office in New Delhi.

Profitability Margins

Net Profit Margin for Q2 FY2026 stood at 8.57% (INR 62 Cr profit on INR 723 Cr sales). Operating Profit Margin for the same period was 14.9% (INR 108 Cr). H1 FY2026 Profit After Tax was INR 153 Cr.

EBITDA Margin

Operating Profit for Q2 FY2026 was INR 108 Cr, a 29.4% decrease from INR 153 Cr in Q2 FY2025. The margin remained resilient despite a significant revenue drop due to cost management in material consumption.

Capital Expenditure

The company is investing in the development of the Bhaskarpara coal mine, which extracted 1.97 lac MT of coal in Q2 FY2026. Specific planned INR Cr expenditure for future expansion is not detailed in the quarterly results.

Credit Rating & Borrowing

The company holds a 'CARE BB; Stable' rating as of February 2024. Finance costs for Q2 FY2026 were INR 10.34 Cr, representing approximately 1.4% of total revenue, down slightly from INR 11.19 Cr YoY.

⚙️ Operational Drivers

Raw Materials

Coal is a primary raw material, with 1.97 lac MT extracted from the Bhaskarpara mine this quarter. Cost of materials consumed was INR 415.20 Cr, representing 57.4% of total revenue in Q2 FY2026.

Import Sources

The company focuses on backward integration through domestic captive mines like Bhaskarpara to mitigate import dependencies.

Key Suppliers

Not specifically named in the documents, though the company utilizes its own captive coal mining resources for a portion of its requirements.

Capacity Expansion

The company is sensitive to sales volumes, with positive rating triggers set at 12 lakh tons and negative triggers below 8 lakh tons. Current extraction at Bhaskarpara is 1.97 lac MT per quarter.

Raw Material Costs

Cost of materials consumed decreased by 47.5% YoY to INR 415.20 Cr in Q2 FY2026 from INR 790.53 Cr, reflecting lower production volumes and increased captive coal usage.

Manufacturing Efficiency

The company utilizes an independent professional firm for internal audits to monitor compliance and operational effectiveness, flagging budget variances to senior management.

Logistics & Distribution

Distribution is heavily impacted by infrastructure activity levels; the company expects a boost in the ensuing quarters as construction and infra activities resume post-monsoon.

📈 Strategic Growth

Expected Growth Rate

12%

Growth Strategy

Growth will be driven by the resumption of infrastructure projects following the INR 11.5 lakh Cr capital expenditure allocation in the Union Budget 2025. The company is also leveraging GST reforms and the operationalization of captive coal mines to improve margins and competitive pricing.

Products & Services

Steel products and Coal (extracted from captive mines).

Brand Portfolio

Prakash Industries.

New Products/Services

Not specifically detailed in the current quarterly report, though the focus remains on scaling coal extraction volumes.

Market Expansion

The company is positioning itself to capture demand from the central government's massive infrastructure push (INR 11.5 lakh Cr budget).

Market Share & Ranking

The domestic steel industry reached 152 million tonnes in FY2025; Prakash is a mid-tier integrated player within this landscape.

🌍 External Factors

Industry Trends

The domestic steel industry grew 5% in production and 12% in demand during FY2025. The trend is shifting toward integrated players who control their own raw material sources (coal/iron ore) to maintain margins.

Competitive Landscape

Operates in a highly competitive and cyclic industry, competing with both large-scale domestic producers and cheap international imports.

Competitive Moat

Moat is built on backward integration (captive coal mines) and strategic location of manufacturing plants, providing a cost advantage over non-integrated competitors.

Macro Economic Sensitivity

Highly sensitive to government infrastructure spending and capital expenditure cycles. The FY2025 budget allocation of INR 11.5 lakh Cr is a primary macro driver.

Consumer Behavior

Demand is driven by B2B sectors including infrastructure, construction, general engineering, and automotive.

Geopolitical Risks

Susceptibility to global steel price volatility and the inflow of cheap international imports which can disrupt domestic market stability.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to GST reforms and environmental pollution norms. The company notes that no fines or penalties were taken by regulators regarding corruption or conflicts of interest in the previous year.

Environmental Compliance

The company implements training for workers in high-risk areas and enforces a 100% ban on child labor to meet ESG and safety standards.

Taxation Policy Impact

The company adjusted a deferred tax liability of INR 11.70 Cr for H1 FY2026 against the Securities Premium Account following a court order, rather than the P&L.

Legal Contingencies

The company faces ongoing CBI cases and disputes regarding the non-payment of interest and principal to Foreign Currency Convertible Bond (FCCB) holders.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material prices and the 'cyclical nature' of the steel industry are primary risks. The outcome of ongoing CBI cases could also have a material impact.

Geographic Concentration Risk

Manufacturing plants are strategically located, but the registered office is in Hissar, suggesting a concentration in Northern India.

Third Party Dependencies

Dependency on the government's infrastructure spending timeline and the successful continued development of the Bhaskarpara coal mine.

Technology Obsolescence Risk

The company monitors internal processes through an independent audit team to ensure adherence to modern business standards.

Credit & Counterparty Risk

The company has faced audit qualifications in the past; improving the quality of accounts and resolving the FCCB issue are key for credit profile improvement.