💰 Financial Performance

Revenue Growth by Segment

Revenue from operations grew 3.22% YoY in H1 FY26 to INR 39.43 Cr from INR 38.2 Cr. For FY27, the company projects a 100% revenue jump to INR 160 Cr, with 50% (INR 80 Cr) coming from existing sponge iron operations and 50% (INR 80 Cr) from new segments including the induction furnace, rolling mill, and tooth point casting.

Geographic Revenue Split

Not disclosed in available documents; however, the company is targeting the domestic Indian market for its import-substitute products like tooth points, which currently see 80% of demand met through imports.

Profitability Margins

PAT margin for H1 FY26 stood at 11.8%. The company expects overall margins to reach approximately 13% of total revenue by FY27 as captive power and value-added products (casting) come online. PAT decreased 2.92% YoY in H1 FY26 to INR 4.65 Cr due to higher power costs from state electricity reforms.

EBITDA Margin

EBITDA margin for H1 FY26 was 18.26%, with EBITDA rising 0.98% YoY to INR 7.20 Cr from INR 7.13 Cr. Core profitability was pressured by a 3% increase in total income against rising utility costs.

Capital Expenditure

The company undertook significant Capex of INR 18.70 Cr in H1 FY26, a massive increase from INR 0.20 Cr in H1 FY25, primarily for the 5 MW Green Energy Captive Power Plant and casting division setup.

Credit Rating & Borrowing

ICRA previously assigned [ICRA]B (Stable)/[ICRA]A4 in 2019 under the 'Issuer Not Cooperating' category; however, these ratings were withdrawn in February 2020. Current borrowing is funded through internal resources and bank debt, with management stating interest costs will not rise significantly due to high internal reserve usage.

⚙️ Operational Drivers

Raw Materials

Power is identified as the primary raw material for the casting and steel melting process. Other materials include iron ore for sponge iron and scrap/sponge iron for induction furnaces.

Import Sources

Not specifically disclosed, but the company focuses on 'Make in India' to replace products currently imported from various countries.

Capacity Expansion

Current sponge iron capacity is 36,050 MTPA. Planned expansions include a 5 MW Green Energy Captive Power Plant (operational Jan 2026), a rolling mill restart (March 2026), and a new casting division (May/June 2026) targeting INR 60-70 Cr in first-year revenue.

Raw Material Costs

Not disclosed as a specific percentage of revenue, but power costs are noted as a critical driver, with the new captive plant expected to significantly reduce the cost of production by using waste heat (green power).

Manufacturing Efficiency

The company is targeting improved capacity utilization of its rolling mill and induction furnaces, which were previously suspended, to drive a threefold revenue increase by FY28.

📈 Strategic Growth

Expected Growth Rate

60-70%

Growth Strategy

The company plans to achieve a 60-70% revenue increase in FY27 (reaching INR 160 Cr) by restarting its rolling mill for structural steel (Beams, Angles, Channels), commissioning a 5 MW captive power plant to lower costs, and launching a casting division for 'tooth points' and 'grinding media' which are high-margin import substitutes.

Products & Services

Sponge iron, MS ingots, steel shots, alloy steel castings (tooth points, grinding media), and structural steel (Beams, Angles, Channels).

Brand Portfolio

Shri Hare-Krishna Sponge Iron (SHKSIL).

New Products/Services

Special alloy steel castings (tooth points) and grinding media, expected to contribute INR 60-70 Cr in the first year of production (FY27).

Market Expansion

Targeting the Indian mining, cement, and automobile industries to replace imported tooth points (currently 80% imported).

Market Share & Ranking

Not disclosed, but the company is positioning itself as a key domestic manufacturer of import-substitute steel castings.

🌍 External Factors

Industry Trends

The industry is shifting toward value-added products and cost leadership through green energy. SHKSIL is positioning itself by integrating a 5 MW green power plant to combat rising industrial electricity tariffs.

Competitive Landscape

Competes with domestic sponge iron players and international exporters of specialized steel castings.

Competitive Moat

The moat is built on cost leadership via captive green power (waste heat recovery) and a first-mover advantage in domestic manufacturing of specific alloy castings (tooth points) that currently have high import dependency.

Macro Economic Sensitivity

Highly sensitive to infrastructure, mining, and heavy engineering demand, which drives the consumption of structural steel and casting products.

Consumer Behavior

Increased demand for 'Make in India' products in the infrastructure and mining sectors is driving the shift toward local procurement of wear parts like tooth points.

Geopolitical Risks

The company is leveraging the 'import substitute' model to capitalize on potential trade barriers or supply chain disruptions affecting foreign steel casting suppliers.

⚖️ Regulatory & Governance

Industry Regulations

Subject to state electricity board reforms and environmental norms for sponge iron kilns.

Environmental Compliance

Achieved ISO 14001:2015 for environmental management and ISO 45001:2018 for occupational health; investing in 'Green Energy' via waste heat recovery.

⚠️ Risk Analysis

Key Uncertainties

Execution risk regarding the timely start of the casting division (May/June 2026) and the rolling mill (March 2026) could impact the 100% revenue growth target.

Geographic Concentration Risk

Operations are concentrated in Raipur, Chhattisgarh, making the company sensitive to regional state electricity reforms.

Third Party Dependencies

Dependency on bank financing for a portion of the capex and on the state grid until the captive power plant is fully operational.

Technology Obsolescence Risk

The company is upgrading to semi-automated rolling mills and induction furnaces to maintain technological relevance.