💰 Financial Performance

Revenue Growth by Segment

Revenue from operations reached INR 484.90 Cr in FY25, growing 21.2% from INR 399.86 Cr in FY24. In H1 FY26, revenue grew 5% YoY to INR 242.7 Cr. Seamless products remain the primary revenue driver, while the welded segment is expected to scale significantly following the capacity expansion to 33,128 MTPA.

Geographic Revenue Split

As of H1 FY26, the revenue split is India (71%), Europe (24%), and America (5%). Export revenue grew 6% YoY to INR 70.8 Cr in H1 FY26, contributing 29.2% of total revenue compared to 26.6% in FY25.

Profitability Margins

Net Profit Margin improved from 4.6% in FY24 to 6.5% in FY25 and reached 8.7% in H1 FY26. Gross profit margin was 30.6% in FY25, down from 34.5% in FY24, reflecting higher raw material costs.

EBITDA Margin

EBITDA margin was 16.1% in FY25, up from 14.7% in FY24. In H1 FY26, the EBITDA margin compressed to 15.1% (down 117 bps YoY) due to increased inventory stocking and operational costs associated with capacity expansion.

Capital Expenditure

The company incurred INR 45.9 Cr in capex during H1 FY26. Capital work in progress stood at INR 61.1 Cr as of September 30, 2025, as part of a major scale-up to increase finished goods capacity from 11,088 MTPA to 33,128 MTPA.

Credit Rating & Borrowing

Assigned CARE BBB+; Stable for long-term facilities and CARE A2 for short-term. The Debt-Equity ratio significantly improved to 1.4x in FY25 from 3.2x in FY24 due to equity infusion from Pre-IPO placement.

⚙️ Operational Drivers

Raw Materials

Stainless Steel (SS) Round Bars and SS Coils are the primary raw materials, with costs representing approximately 69.4% of revenue based on FY25 gross margins.

Capacity Expansion

Current installed capacity is 11,088 MTPA (10,068 MTPA Seamless; 1,020 MTPA Welded). Planned expansion will increase this to 33,128 MTPA by Q1 FY27. Mother hollow capacity for backward integration is 20,000 MTPA.

Raw Material Costs

Raw material costs as a percentage of revenue were approximately 69.4% in FY25. Profitability is highly susceptible to steel price volatility, which is a monitorable risk given the 120-135 day inventory holding period.

Manufacturing Efficiency

Targeted blended capacity utilization is 60-65% for FY26, with plans to increase to 80% by FY27 as new capacities stabilize.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth will be driven by a 198% increase in finished goods capacity to 33,128 MTPA, with commercial production of welded products starting in Q1 FY27. The company aims for a blended EBITDA margin of 15-16% by balancing seamless (16-18% margin) and welded (12-13% margin) product mixes.

Products & Services

Stainless steel seamless tubes, welded tubes, pipes, and U-tubes.

Brand Portfolio

Scoda Tubes Limited.

New Products/Services

New product launches in the welded segment are expected to contribute to the targeted 20% revenue growth following the Q1 FY27 capacity ramp-up.

Market Expansion

The company has exported to 32 countries and is focusing on increasing its market share in Europe (currently 24% of revenue) and America (5% of revenue).

🌍 External Factors

Industry Trends

The industry is seeing increased demand for stainless steel tubes driven by government supportive policies. Scoda is positioning itself through backward integration and expanding its global footprint to 32 countries.

Competitive Landscape

Faces strong competition from both domestic players and inexpensive imports, countered by focusing on quality and product differentiation.

Competitive Moat

Durable advantages include backward integration (20,000 MTPA mother hollow capacity) and international accreditations like PED 2014/68/EU and DNV Marine, which serve as high entry barriers for competitors.

Macro Economic Sensitivity

Highly sensitive to global economic cycles and fluctuations in the steel industry, which impact both raw material costs and demand volumes.

Consumer Behavior

Growing expectations for sustainable practices are influencing cost structures and operational investments in renewable energy.

Geopolitical Risks

Trade barriers or changes in custom duties could pose threats to the export business, which accounts for 29.2% of revenue.

⚖️ Regulatory & Governance

Industry Regulations

Operations must comply with PED 2014/68/EU, ADW/AD 2000 (Germany), and Indian Boiler Regulation (IBR) standards for product quality and safety.

Environmental Compliance

The company invests in renewable energy and resource-efficient practices to meet growing sustainability expectations.

Taxation Policy Impact

Current tax for FY25 was INR 1.18 Cr on a Profit Before Tax of INR 4.19 Cr, representing an effective tax rate of approximately 28%.

⚠️ Risk Analysis

Key Uncertainties

Working capital intensity is a primary risk, with cash flow from operations turning negative at INR -51.0 Cr in H1 FY26 due to high inventory and debtor days.

Geographic Concentration Risk

71% of revenue is concentrated in the Indian domestic market, while 24% is concentrated in Europe.

Third Party Dependencies

Dependency on external suppliers for raw materials like SS round bars is a risk, partially mitigated by captive mother hollow production.

Technology Obsolescence Risk

Mitigated by regular R&D investments and a focus on product improvement to ensure relevance against evolving technologies.

Credit & Counterparty Risk

Trade receivables increased to INR 154.0 Cr in H1 FY26 from INR 101.1 Cr in FY25, with debtor days rising to 113 days, indicating increased credit exposure.