Sarda Energy & Minerals Ltd. expects significant momentum across its energy and metals businesses in the coming quarters, with Executive Director Nilay Joshi outlining a robust outlook for FY27. Speaking exclusively to BTTV, Joshi attributed this positive forecast to resilient power demand, improving operational conditions, and the phased commissioning of new coal mines.
Diversified Business Model Powers Resilience
Joshi emphasized the company’s diversified business model, which has proven resilient even amidst operational challenges. The energy segment currently contributes over 70 percent of Sarda Energy’s EBITDA, with metals accounting for the remainder. This diversification helped the company deliver a healthy operational performance in the June quarter, despite planned and unplanned shutdowns, with EBITDA remaining above Rs 600 crore even after excluding one-time gains.
Energy Segment Poised for Growth
The energy business remains a key growth driver, with power demand consistently strong across India. Joshi noted that electricity prices on power exchanges have remained firm, defying the typically weaker seasonal demand in the second quarter. Hydropower generation is expected to strengthen, particularly during the peak generation season in the second and third quarters. Despite a 12-13 day disruption in Sikkim due to a transmission tower collapse, hydropower output in the June quarter matched last year’s record levels.
Addressing concerns about uneven monsoon patterns, Joshi clarified that rainfall has become more region-specific. While Chhattisgarh experienced below-normal rainfall in the first quarter, Sikkim saw robust rainfall supporting hydropower. He confirmed improved rainfall in both regions in the ongoing quarter, mitigating any significant impact on hydropower output.
In the thermal power sector, Sarda Energy is targeting a higher plant load factor (PLF) of approximately 85 percent for the current financial year, supported by sustained demand and stable power prices.
Metals Business Set for Recovery
The metals business is also on track for recovery after production was temporarily affected in recent quarters by the replacement of a 30 MW captive power turbine. This shutdown reduced power availability and impacted production levels. With the replacement expected to be completed in the current month, operations are set to normalize. The company anticipates significantly stronger performance for the metals business in the next few quarters as production ramps up following these maintenance activities.
New Mining Vertical: A Strategic Shift
Beyond its established energy and metals operations, Sarda Energy is strategically developing mining into a major standalone business vertical. The company currently operates one thermal coal mine and plans to commission four high-grade coal mines in phases over the next few years.
The first of these, the Shahapur West high-grade coal mine, is slated to begin production in the fourth quarter of the current financial year. Joshi explained that this mine will help replace imported high-grade coal, reduce costs, and provide an incremental EBITDA contribution in FY27, with full financial benefits expected from the subsequent year. “Every year, you will see some action on mining,” he stated, underscoring the company’s strategy to diversify earnings and bolster resource security through captive mining assets.