Vardhman Special Steels Q1 earnings up on stronger OEM demand, improved realizations; expansion plans progress

Indian special steel producer Vardhman Special Steels Ltd (VSSL) reported higher earnings in the first quarter of FY2026-27, supported by stronger steel shipments, improved realizations following OEM price hikes, and operational efficiencies. The company also reiterated that its ongoing capacity expansion projects remain on schedule, strengthening its position in India's automotive special steel market.

VSSL said demand remained healthy across its key automotive, engineering and tractor customer segments during the April-June quarter. Sales volume of rolled steel increased 6.4% year on year to 59,103 t, from 55,574 t in the corresponding period last year. Revenue from operations rose 12.1% to INR 4.86 billion ($56.5 million), driven by higher dispatches and improved selling prices after OEM price increases.

The company said the commissioning of its Kocks Block and new reheating furnace in FY2025-26 has begun delivering operational benefits by improving product quality, rolling efficiency and expanding finished rolling capacity to 270,000 tpy. It also cited lower power costs following the commissioning of its solar power plant, which contributed to improved profitability.

EBITDA increased 73.6% year on year to INR 683 million ($7.9 million), while profit before tax more than doubled to INR 554 million ($6.4 million). Net profit rose 107% to INR 412 million ($4.8 million) from INR 199 million a year earlier. EBITDA per tonne reached INR 10,764, excluding non-operating income from investment of unutilized funds and interest income.

Capacity expansion pipeline

The company reaffirmed progress on its major expansion programme, including:

• A 500,000 mt greenfield special steel plant, approved with an investment of INR 20 billion ($233 million).

• A steel forging and machining facility in Ludhiana, approved with an investment of INR 4.75 billion ($55 million) in collaboration with Aichi Steel Corporation.

• Commissioning of a new reheating furnace in March 2026, increasing annual rolled steel capacity to 270,000 mt.

• Aichi Steel increased its equity stake in VSSL to 24.9% in June 2025, further strengthening the strategic partnership.

Market outlook

Chairman and Managing Director Sachit Jain said sustained demand from automotive and engineering customers, coupled with higher realizations from OEMs, improved operating efficiencies and economies of scale, supported the company's quarterly performance. He added that the new greenfield special steel project and the forging and machining plant will diversify the product portfolio and strengthen VSSL's long-term growth prospects.

VSSL currently has an annual 300,000 mt billet-making capacity and 270,000 mt rolled bar capacity, supplying special and alloy steel bars primarily to the automotive sector. Its customer base includes major OEMs such as Toyota, Maruti Suzuki, Hyundai, Hero MotoCorp, Caterpillar and Hino Motors, while it also exports to markets including Thailand, Taiwan, Turkey, Germany, Spain and Russia.