Gallantt Ispat L Q2 FY27 Earnings Call — Analysis (NSE: GALLANTT)
Gallantt Ispat reported Q2 FY27 revenue of ₹1,146 Cr (+13% YoY) with EBITDA margins compressing to 9.64% due to plant integration shutdowns and high input costs, while commissioning expanded Gorakhpur capacity in November.
Result quality: watch — Margin pressure. Management sentiment: optimistic.
The take
Q2FY27 Revenue from Operations ₹1,146 Cr ( +13.13% YoY ) . New guidance — FY27 gorakhpur expansion ramp-up operational Nov 2026, 85-90% utilization Dec 2026 . New story: Raw Material Integration Advantage .
Results
Revenue ₹1,146 Cr +13% YoY; EBITDA ₹111 Cr with margin down to 9.64% (-327 bps YoY); PAT ₹61 Cr (-31.5% YoY).
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Revenue from Operations | ₹1,146 Cr | +13.13% | yoy · Q2FY27 · vs ₹1,013 Cr in Q2FY26 |
| Revenue from Operations | ₹1,146 Cr | +0.0% | qoq · Q2FY27 · vs ₹1,146 Cr in Q1FY27 |
| EBITDA | ₹111 Cr | -17.78% | yoy · Q2FY27 · vs ₹135 Cr in Q2FY26 |
| EBITDA Margin | 9.64% | -327bps | yoy · Q2FY27 · vs 12.91% in Q2FY26 |
| EBITDA per ton | ₹6,150 | -23.22% | qoq · Q2FY27 · vs ₹8,010 in Q1FY27 |
| Profit After Tax | ₹61 Cr | -31.46% | yoy · Q2FY27 · vs ₹89 Cr in Q2FY26 |
| H1 FY27 Revenue | ₹2,292 Cr | +7.05% | yoy · H1FY27 · vs ₹2,141 Cr in H1FY26 |
| Capex Spend | ₹278 Cr | none · H1FY27 · of ₹3,000 Cr program | |
| Total Cash and Liquid Investments | ₹692 Cr | point_in_time · Q2FY27 · Sep-26 (₹426 Cr liquid + ₹266 Cr treasury) |
Guidance
Gorakhpur expanded capacity (to 1.23-1.3 MTPA) to start in November 2026 reaching 85-90% utilization by December, while captive mines are targeted to add ₹2,000/ton to EBITDA once operational in FY28.
What management committed to
- The enhanced [Gorakhpur] capacity is expected to be operational in November 2026 and ramp up to 85-90% utilization by end of December 2026. — operational Nov 2026, 85-90% utilization Dec 2026, FY27
- [Our solar plants] Together, these are expected to save INR30 to INR40 crores annually in power cost once the Siddhpur plant (Nov 2026) and Prayagraj plant (Q4 2027) are operational. — INR30-40 crores, FY28
- [The iron ore blocks] will be operational in FY28, adding approximately INR2,000 per ton to [Gallantt's] EBITDA. — INR 2,000 per ton, FY28+
- [Gallantt] intends to present [the] medium-term growth plan (a larger greenfield opportunity) in Quarter 4 of FY27. — Q4 FY27, FY27
- [Gallantt] will completely stop consuming imported coal in the Gorakhpur unit once the Singrauli coal block is operational. — zero imported coal at Gorakhpur, ~FY28-29
- The [Gujarat] upstream debottlenecking, comprising power plant efficiency improvements showing results in Q3 FY27 and a sponge iron unit commissioning in Q4 FY27, is on track. — Power benefits Q3, Sponge iron commission Q4, FY27
- [Gallantt] will spend approximately INR 500 crores in H2 FY27 on capex, funded entirely from internal accruals. — INR 500 crores, FY27
Key themes
Capacity commissioning and backward raw-material integration
How the narrative shifted
- Raw Material Integration Advantage: Management positions the coal block award as a transformative event, enabling structural cost advantage via self-sufficiency in both iron ore and coal.
- Transient Margin Pressure from Growth Investments: Reframes the EBITDA compression not as a structural margin problem but as a transitory cost of the Gorakhpur integration and an unplanned power plant turbine issue.
- Elevated Macro Cost Environment: Global geopolitical tensions (Middle East) keep energy, freight, and coal costs high, explicitly cited as a negative driver on Q2 EBITDA.
- Secular Domestic Demand Tailwind: Strong domestic finished steel consumption growth (7.5% H1) and a 21% TMT price recovery provide the demand backdrop for margin recovery.
- Capital Discipline: The INR3,000 crore program funded entirely through internal accruals with zero term loans is presented as a hallmark of the company's financial prudence.
- Brand-Driven Pricing Power: Management highlights a 5-6% premium over unbranded TMT in UP, supported by celebrity endorsements, protecting realizations.
- Geographic Strength in Uttar Pradesh and Gujarat: Management highlights the strength of its core markets in Uttar Pradesh and Gujarat, which are growing faster than the national average.
Operational commentary
- Gorakhpur plant capacity integration shutdown taken during Q2; expanded capacity (1.23 to 1.3 MTPA) scheduled to operationalize in November 2026.
- Gorakhpur captive power plant experienced an extended maintenance shutdown due to a turbine issue, increasing power procurement costs; operations resuming within a week.
- Singrauli coal block awarded in August 2026; due diligence underway to decide final commercialization over next 1 month, aiming to eliminate imported South African coal at Gorakhpur.
- Renewable power projects on track: 18 MW solar plant in Siddhpur, Gujarat resuming November 2026 and 60 MW solar plant in Prayagraj, UP commissioning in Q4 FY27 (together saving ₹30-40 Cr annually).
- Kutch rolling mill utilization improved to 68% in Q2 from 66% in Q1; upstream DRI/sponge iron debottlenecking in Gujarat on track for Q4 FY27 commissioning.
- Iron ore mines in UP and Rajasthan are under exploration and statutory clearances, with targeted operationalization in FY28.
Analyst Q&A
Q. Clarification on funding mix for the upcoming medium-term greenfield project.
Funding mix will be decided based on project size, but the group intends to primarily rely on internal accruals rather than high external borrowings.
Q. Drivers of inventory increase of ₹118 Cr and expected normalization timeline.
Caused by plant shutdown delays and pre-building stock for new capacity; expected to normalize in Q3 FY27 as operations restart.
Q. Specific full-year capex spend breakdown across projects.
CFO stated remaining capex for the year is around ₹500 Cr (Gorakhpur ₹400 Cr, Mines ₹240 Cr, Solar ₹170 Cr, Kutch ₹100 Cr under Annual Business Plan).
Research and educational content only. Not investment advice.