Sambhv Steel Tubes: Forging Ahead with Record Performance and Strategic Expansion

Sambhv Steel Tubes Limited has delivered an exceptional performance in the second quarter and first half of fiscal year 2026 (Q2 & H1 FY26), marking its strongest-ever half-yearly results. The company, operating on a standalone financial basis, reported robust growth across key financial metrics. Total sales volumes surged by 51%, revenue increased by a significant 76%, EBITDA grew by an impressive 94%, and Profit After Tax (PAT) soared by 109% year-on-year. This reflects strong operational execution and strategic progress, positioning Sambhv as a leading force in India's rapidly expanding steel pipes and tubes market. The company's commitment to value-added products, process efficiency, and brand building has been instrumental in achieving these milestones.

The management highlighted that the company's focus on high-margin, value-added products such as CRFH pipes, stainless steel CR coils, and galvanized coils and pipes has been a key driver. Production of value-added products reached 2.5 lakh tons per annum, with value-added sales volume increasing by 59%. Capacity utilization in the Pre-Galvanized and Stainless Steel divisions improved significantly to 89% and 86% respectively. While Q2 EBITDA margins saw a slight dip, attributed to seasonal factors affecting raw material quality, the overall H1 performance underscores Sambhv's resilience and strategic agility. The financial cost also dropped significantly by 46% quarter-on-quarter, owing to progress in repaying long-term borrowings, further strengthening the company's financial health.

Strategic Initiatives and Capacity Expansion

Sambhv Steel Tubes Limited is embarking on an ambitious capacity expansion plan, with a greenfield project at Kesda and a brownfield expansion at Kuthrel. The Kesda project aims to add 1.2 million tons per annum (MMTPA) of finished products over the next 4-5 years, with Phase-1, focusing on 0.36 MMTPA of Stainless Steel Coil Production Capacity, expected to be commissioned by Q4 FY27. This expansion is projected to generate an additional revenue potential of INR 2,400 crore to INR 2,800 crore. The Kuthrel facility, operationalized in FY25, has already started producing value-added products like GP coils, GP pipes, stainless steel HRAP coils, and stainless steel CR coils, enhancing the company's product portfolio and manufacturing capabilities. These expansions are backed by strategic land acquisitions, procurement of an HR mill, and environmental clearance recommendations.

Market Penetration and Cost Optimization

The company is also aggressively expanding its market reach and distribution network. Its geographic presence has grown from 10 states in FY23 to 15 states and 1 Union Territory in FY25, covering key regions like Chhattisgarh, Maharashtra, Gujarat, and Uttar Pradesh. Sambhv plans to further increase its distributor base and explore international markets, particularly the Middle East, for its ERW pipes and tubes. On the cost optimization front, Sambhv has adopted advanced technology for GP Coils & Pipes, which significantly reduces zinc consumption, thereby improving cost efficiency. The company's owned renewable energy power plant, with a total installed capacity of 25 MW, further reduces dependency on external power sources and contributes to energy conservation and waste reduction.

Outlook and Management Confidence

Management expressed confidence in maintaining an EBITDA margin of around 13% for the coming quarters, with a maintainable EBITDA per ton of INR 7,000 on a yearly basis. With the full commissioning of the additional CAPEX by FY28, the company anticipates achieving a revenue of approximately INR 4,500 crore, with margins in the range of 10%-13%. The management's proactive approach, including course-correction towards stainless steel production based on market demand and robust investor relations, underscores their commitment to sustainable, value-driven growth. Sambhv Steel Tubes Limited is well-positioned to capitalize on India's infrastructure boom and emerge as a leading player in the steel industry, driven by strategic capacity expansion, deeper market penetration, and a strong focus on value-added products.