Rathi Steel And Power in Q4 FY26: Growth, Green Positioning, and the Push to Scale Utilisation

Rathi Steel And Power Limited closed FY26 with a sharp rebound in quarterly performance, as shown in its investor presentation for the audited results ended March 31, 2026. In Q4 FY26, consolidated total income rose to 244.57 crore from 149.73 crore in Q4 FY25, a 63.34 percent year on year increase. The company also reported higher profitability for the quarter, with EBITDA of around 9.9 crore and PAT of around 7.45 crore, supported by improved operating momentum and a better product and efficiency mix.

Management attributed the quarter’s improvement to healthy demand and the ramp-up of the TMT bar mill. At the same time, the commentary acknowledged a difficult operating environment shaped by macro uncertainty and steel price volatility. The company’s response, per the presentation, has been to lean on cost and energy efficiency initiatives. A key highlight was the increasing use of green power purchased through open access, which management said contributed to more than a quarter of total power consumption during the year.

A manufacturing model built on integration and direct charging

Rathi Steel And Power positions itself as an integrated long-products manufacturer operating from a modern plant in Ghaziabad, spread over around 12.5 acres and located near the NCR market. The presentation states steel melting capacity of about 85,000 TPA and rolling capacity of 200,000 TPA. It also highlights a niche operational advantage: the ability to directly charge hot billets from casting into rolling, avoiding the cooling and reheating cycle that many plants require.

The company describes this as direct billet charging, where billets from the continuous casting machine move via roller conveyors to the rolling mill while still hot. The stated benefits include lower oxidation-related yield losses, lower net energy cost, and a reduced carbon footprint. RSPL notes that it is India’s only stainless-steel wire rod producer using direct billet charging technology.

Operationally, the FY26 utilisation levels shown in the presentation indicate meaningful headroom. The steel melting shop utilisation is shown at about 53 percent, and the rolling mill utilisation at about 51.49 percent for FY26. Under its strategic path ahead, RSPL has set an explicit utilisation ramp target: moving steel melting utilisation from 55 to 60 percent up to 80 percent going forward.

FY26 financial picture: higher revenue, lower margin, mixed cash flow

On a full-year basis, the company reported FY26 consolidated total revenue of 716.49 crore, EBITDA of 28.90 crore, and net profit of 12.87 crore. The investor presentation highlights strong revenue growth versus FY25. However, the profit and loss table shows that EBITDA margin declined to 4.03 percent in FY26 from 4.81 percent in FY25. PAT margin also declined to 1.80 percent from 2.76 percent, even as absolute profit excluding exceptional items improved.

The cash flow snapshot is an important part of the FY26 story. The company’s cash flow table shows cash from operations of -1.32 crore in FY26, following -11.06 crore in FY25. During the same period, investment cash flows remained negative due to capex, and financing cash flows were positive.

The balance sheet reflects a larger working capital footprint as well. Trade receivables increased to 56.54 crore in FY26 from 24.77 crore in FY25, while inventories rose to 55.93 crore from 50.09 crore. The current ratio improved to 1.04 from 0.80, indicating better coverage of short-term obligations, but the working capital build is evident.

GreenPro and premium grades: the demand-side strategy

A major narrative thread in the presentation is the company’s push to align product positioning with evolving procurement preferences in real estate, infrastructure, and public sector projects. RSPL highlights the GreenPro certification granted by CII for its E 550 grade TMT rebars. The company positions this certification as useful in marketing to green projects and to government supplies where certified steel is preferred.

Beyond certification, the company points to product and process choices that support a lower-carbon profile. RSPL frames its Fe 550 and Fe 550D TMT bars as being produced through a recycling-based route aligned with circular economy steelmaking. It also contrasts emissions intensity between conventional primary steelmaking and scrap-based routes, and emphasises that direct charging lowers energy usage by reducing reheating requirements.

The company also highlights BIS approvals, including Fe 550 and Fe 550D grade TMT bars and stainless steel reinforcement bars, as part of its attempt to expand into premium and higher-spec applications. Management commentary suggests that the demand opportunity for Fe 550 and Fe 550D grades in the NCR region is meaningful, particularly among real estate majors.

What RSPL is trying to execute next

The strategic plan in the presentation focuses on a combination of ramping utilisation, improving efficiency, and widening the mix toward higher value products. Key initiatives include implementing direct charging technology for the TMT bar mill, adding a conveyor system for the TMT mill to reduce handling cost, and expanding the steel melting shop at minimal cost. The company also lists a rooftop solar generation unit as planned, alongside renewable power tie-ups, digitalisation, and automation.

The presentation also reiterates the turnaround arc from the Odisha unit shutdown, deleveraging, and a preferential allotment fund raise of 114.71 crore in February 2024. RSPL states it achieved complete debt repayment by March 2024 and regained banking relationships with fresh credit lines.

The immediate investment question is whether the company can convert higher throughput into stronger and more stable margins while keeping working capital and cash flows disciplined. FY26 demonstrates that revenue growth alone does not guarantee margin expansion. But the company’s strategy, as laid out, is anchored in operational efficiency, green positioning, and higher-grade offerings.

In FY27, RSPL enters with clear stated priorities: increase utilisation, raise the share of green power, and expand presence in premium Fe 550 and Fe 550D TMT bars alongside stainless steel products. If execution aligns with the targets in the presentation, the company could move from a rebound quarter to a more durable operating trajectory.