Indian Metals Q4 FY26 Results (NSE: IMFA)
Signal: Margin expansion
The read
Q4FY26 marks a confirmed inflection: revenue growth accelerating (+34.6% YoY after -6.1% in Q3) and OPM expanding for the 2nd consecutive quarter (+900bps YoY) — ending a 5-quarter margin contraction streak. The Ferro alloys segment drove the turnaround on volume recovery and lower input costs. However, the Kalinganagar acquisition (consummated Feb'26) has dramatically increased leverage (net debt from near zero to ~₹892 Cr) and will incur full depreciation/finance costs in FY27, pressuring margins even with higher volumes. Operating cash flow weakened (-40% vs FY25) due to working capital build; the capex-heavy strategy needs sustained EBITDA expansion to de-lever.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹763.29 Cr | 34.6% | 8.6% |
| EBIT | ₹182.37 Cr | 202.2% | |
| Net profit | ₹103.44 Cr | 118.1% | |
| EPS | ₹19.17 | 119.8% | |
| EBIT margin | 21% |
P&L walk
Revenue grew +34.6% YoY (accelerating from -6.1% in Q3FY26), driven by Ferro alloys volume recovery and the Kalinganagar plant acquisition contributing from Feb'26. OPM expanded +900bps YoY to 21% – 2nd consecutive quarter of expansion – on lower input cost (RM % of rev improved) and operating leverage as power & fuel cost grew slower than revenue; however, finance cost surged +76% YoY and depreciation was flat, holding back PAT growth vs EBIT growth. EBITDA (estimated ~₹160 Cr) grew far faster than revenue, but the net profit of ₹103 Cr was skewing lower QoQ due to higher depreciation and finance costs. Standalone and consolidated are identical (no subsidiaries active – only associate loss negligible).
Segments
Ferro alloys is the clear driver – segment revenue ₹762.81 Cr (+34.6% YoY) and segment PBIT ₹180.95 Cr (+208% YoY), accounting for 99+% of group profit. Power segment continues to report negative PBIT (₹-1.00 Cr, though narrower than -0.96 Cr in Q4FY25), consuming cash despite significant revenue. Mining segment PBIT was only ₹3.78 Cr, modestly positive but far below Ferro alloys. The group profit is entirely dependent on Ferro alloys performance; captive power and mining are marginal contributors.
Key positives
- Revenue grew +34.6% YoY to ₹763 Cr, the highest quarterly revenue in at least 12 quarters, driven by Ferro alloy volume recovery and Kalinganagar contribution
- OPM expanded +900bps YoY to 21% — 2nd consecutive quarter of margin expansion, reversing a 5-quarter contraction streak
- Ferro alloys segment PBIT surged +208% YoY to ₹181 Cr, the highest in at least 12 quarters
- PAT +118% YoY to ₹103 Cr — the highest Q4 PAT since FY23
- EPS growth tracked PAT growth with no equity dilution
Key concerns
- Net debt spiked from near zero to ~₹893 Cr (total borrowings ₹924 Cr vs cash ~₹31 Cr) due to Kalinganagar acquisition and capex — interest coverage still adequate at ~10x but debt servicing will pressure future PAT
- Operating cash flow fell -40% to ₹349 Cr (FY26 vs FY25) as working capital absorbed ₹310 Cr (receivables +₹230 Cr, inventories +₹79 Cr)
- PAT declined -21% QoQ despite 8.6% revenue growth, due to lower other income (-68%) and higher finance cost (+76%)
- Power segment continues to report negative PBIT (₹-1 Cr), a drag on consolidated profitability
- Depreciation charge is likely understated for new assets — full-year FY27 depreciation will rise materially as Kalinganagar plant sees 12 months of depreciation
Research and educational content only. Not investment advice.