“This is to inform that the Board of Directors of Sarda Metals & Alloys Ltd. – Wholly Owned Subsidiary of the company has approved, as part of its green initiative, capex of ₹ 300 crore for installation of a waste heat recovery power plant and expansion of mineral wool manufacturing facility at its existing plant premises at Vizianagaram,” according to a stock exchange filing.
The capex will be undertaken at the subsidiary’s existing plant premises located in Vizianagaram, the company said in a filing to the exchanges.
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In May this year, Sarda Energy & Minerals said it expects the first quarter of FY27 to remain strong on the back of better power realisations and is aiming to become debt-free by June, according to Nilay Joshi, Executive Director and Head – Group Corporate Finance at the company.
Speaking to CNBC-TV18, Joshi said the company’s power operations have normalised after planned maintenance shutdowns earlier this year and do not expect any impact on steel production going forward. “The power plant shutdown got over in early January, so both the turbines are functioning normally now,” Joshi said. “For steel, we don’t expect any impact for the full year.”
While the company did not provide quarterly earnings guidance, Joshi said the April-June quarter is usually the strongest for the business because of higher power demand and stronger exchange realisations. “The nature of the business is such that normally Q1, because of energy demand, is a strong quarter, and we expect it to remain a strong quarter,” he said.
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Sarda Energy currently has a total independent power producer (IPP) capacity of 600 megawatts. Of this, 300 megawatts are tied up under medium- and long-term power purchase agreements (PPAs), with supply currently underway for 200 megawatts. The remaining capacity is being sold through short-term PPAs or on the power exchange.
Joshi said exchange realisations are typically strongest during the first quarter. The company also expects its additional 30-megawatt captive power unit to become operational by June.
On the balance sheet, Joshi said the company has significantly reduced debt and expects to become debt-free on a consolidated basis soon. “On a standalone basis, we are already debt-free,” he said. “Net debt has gone down by 85% at the consolidated level also, from ₹1,500 crore levels to hardly ₹200 crore as of March, and by June, hopefully, it will be a debt-free operation.”
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The company said most of its ongoing capital expenditure, including mining projects, is being funded through internal accruals. Debt may increase temporarily only for the proposed expansion of the SKS power plant.
On Friday (July 24), shares of Sarda Energy & Minerals Ltd ended at ₹501.50, down by ₹0.75, or 0.15%, on the BSE.
