SANDUMA - Sandur Manganese

📊 NSE: SANDUMA 🏢 Mining / Minerals / Metals 📅 Last Updated: 12/14/2025 12:47

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 336% YoY in Q2FY26 to INR 1,245 Cr. Standalone revenue for H1FY26 was INR 882 Cr, up 57% YoY. Sales volume growth by segment in Q2FY26: Manganese Ore (+335% YoY), Iron Ore (+30% YoY), Ferroalloys (+137% YoY), and Coke (-32% YoY).

Profitability Margins

Consolidated EBITDA margin was 23% in Q2FY26. Standalone EBITDA margin for H1FY26 was 47%, representing a significant expansion of 1,648 bps YoY due to higher mining realizations and volumes. Consolidated PAT margin for Q2FY26 was 11%.

EBITDA Margin

Standalone EBITDA margin reached 47% in H1FY26, up from 30.5% in H1FY25. Consolidated EBITDA margin for H1FY26 was 25%, reflecting the integration of Arjas Steel.

Capital Expenditure

The company completed the strategic acquisition of Arjas Steel Private Limited (ASPL) for an Enterprise Value of approximately INR 3,000 Cr. The equity value payable by SMIORE is estimated between INR 1,600 Cr and INR 1,800 Cr.

Credit Rating & Borrowing

The company holds an ICRA A+ (Stable) and ICRA A1 rating. CRISIL also assigned an A+ (Stable) rating. Borrowing costs are not explicitly stated, but the company is raising INR 450 Cr through proposed NCDs.

⚙️ Operational Drivers

Raw Materials

Iron Ore and Manganese Ore are primary raw materials, largely sourced from captive mines. Coking coal is used for coke and ferroalloy production, representing a significant portion of external procurement costs.

Capacity Expansion

Iron Ore capacity was recently enhanced from 1.6 MTPA to 3.81 MTPA (138% increase). Manganese Ore capacity was enhanced from 0.286 MTPA to 0.46 MTPA (61% increase). Arjas Steel adds specialty steel capacity.

Raw Material Costs

Captive mining of Iron and Manganese ore provides a significant cost advantage. However, realizations for Manganese Ore fell 5% QoQ to INR 5,957/tonne and Iron Ore fell 9% QoQ to INR 3,380/tonne in Q2FY26.

Manufacturing Efficiency

Iron Ore production reached 10.71 Lakh Tonnes in Q2FY26, a 7% increase QoQ. Manganese Ore production was 1.28 Lakh Tonnes, up 6% QoQ.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is driven by the downstream integration into specialty steel through the Arjas Steel acquisition and the expansion of mining capacities. The company aims to maximize captive manganese ore consumption in its ferroalloy furnaces to absorb additional mining output.

Products & Services

Iron Ore, Manganese Ore, Ferroalloys (Silico Manganese, Ferro Manganese), Coke, and Specialty Steel products for the automotive and industrial sectors.

Brand Portfolio

SANDUMA

New Products/Services

Specialty steel products from the Arjas Steel division targeting new application areas in the automotive sector.

Market Expansion

Expansion into the specialty steel market following the acquisition of Arjas Steel Private Limited.

Market Share & Ranking

The company is one of the few entities classified in Category A mining leases in Karnataka with production capacity exceeding 1 MTPA of iron ore.

Strategic Alliances

Joint Venture with Renew Sandur Green Energy Private Limited (49% ownership) for green energy procurement.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward integrated operations and specialty steel to mitigate the cyclicality of merchant mining. SMIORE is positioning itself as an integrated player through the Arjas acquisition.

Competitive Landscape

Operates in a highly regulated environment with competition from other large-scale merchant miners and integrated steel producers in Karnataka.

Competitive Moat

Moat is based on 70 years of mining experience, Category A leases, and massive reserves (117 MT Iron Ore, 17 MT Manganese Ore) valid until 2033, providing long-term raw material security.

Macro Economic Sensitivity

Operations are highly sensitive to domestic and global economic conditions, including inflation and currency volatility affecting coking coal imports.

Consumer Behavior

Increasing demand for high-quality specialty steel in the Indian automotive sector is driving the company's downstream shift.

Geopolitical Risks

Global economic developments and trade dynamics impact the demand-supply balance in the steel and mining sectors.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Central Empowered Committee (CEC) and KSPCB, which set permissible annual production limits for iron and manganese ore.

Environmental Compliance

The company recently received Consent for Operation - Expansion (CFO-Expand) from the Karnataka State Pollution Control Board (KSPCB).

Legal Contingencies

The company faces risks from legislative amendments, legal disputes, and public interest litigations inherent to the mining industry, though specific case values are not disclosed.