Sandur Manganese Q4FY26: record mining volumes, stronger cash, and an integrated steel platform

The Sandur Manganese and Iron Ores Limited closed Q4FY26 with a sharper earnings profile and a clearer operating rhythm across its mining, ferroalloys, coke, and steel businesses. On a consolidated basis, total income for the quarter was ₹1,531 crore, EBITDA came in at ₹406 crore, and PAT was ₹236 crore. Year on year, consolidated total income grew 15 percent, EBITDA rose 25 percent, and PAT increased 51 percent. Sequentially, performance accelerated as well, with QoQ growth of 24 percent in total income, 46 percent in EBITDA, and 104 percent in PAT.

The quarter also reflected a familiar pattern for resource-linked businesses: volumes did a lot of the heavy lifting while realizations stayed mixed. The company pointed out that FY26 saw prices bottom out in Q2 and Q3 across manganese and iron ore, before domestic benchmark realizations improved in April, supporting a better start to FY27. Against that backdrop, Q4FY26 became a quarter where operating execution and dispatches mattered more than price tailwinds.

Q4FY26: volumes led, margins followed

Mining remained the anchor. Manganese ore sales volumes grew sharply, supported by both external dispatches and captive consumption at the ferroalloys unit. In Q4FY26, manganese ore production was 2.02 lakh tonnes and sales were 1.20 lakh tonnes. YoY, manganese sales volumes grew 162 percent, and QoQ they rose 36 percent. Average realization was ₹6,935 per tonne, up 7 percent QoQ.

Iron ore showed a different profile: steady scale, softer pricing. Q4FY26 iron ore production was 12.65 lakh tonnes and sales were 15.10 lakh tonnes. Sales volumes grew 12 percent YoY and 58 percent QoQ. Realizations were ₹2,834 per tonne, down 1 percent QoQ. The mix suggests the company used the quarter to push dispatches, which aligns with management’s comment that it carried some closing stock of iron ore into year-end.

Ferroalloys also stood out on volume recovery. Q4FY26 sales were 18,241 tonnes, up 689 percent YoY and 4 percent QoQ, with realizations at ₹6,773 per tonne and a 5 percent QoQ improvement. The company described a sequential improvement in ferroalloys output across FY26 and noted early signs of recovery in industry conditions.

Coke was the weakest segment on reported volumes because operations were partly under a conversion arrangement. Q4FY26 showed zero production in the reported line item but included contract manufacturing volume of 57,454 tonnes. Sales were 5,181 tonnes, down 73 percent YoY and 5 percent QoQ, and realizations were ₹21,432 per tonne, down 17 percent QoQ. Management said 2 of 4 batteries were operational and the same contract capacity was secured for FY27, with efforts underway to raise overall utilization from about 46 percent.

Steel, through the Arjas platform, held steady on realizations and improved modestly in volumes. Q4FY26 steel production was 1.07 lakh tonnes and sales were 1.10 lakh tonnes. Sales volumes grew 11 percent YoY and 11 percent QoQ, while realization was ₹70,361 per tonne, flat QoQ. Management commentary highlighted improved Q4 margins compared with the prior two quarters and indicated expectations of stronger FY27 supported by higher output from existing capacity and a better operating environment for alloy steel and automotive.

Financial summary

The quarterly snapshot shows two important things. First, the consolidated business now carries a different margin profile than the standalone mining-led company, because steel adds revenue scale but typically comes with lower percentage margins. Second, despite that structural change, Q4FY26 still delivered healthy profitability, suggesting that operational improvements and mining cash flows are currently supporting the broader group.

FY26: scale step-up, steel consolidation, and a reset in margins

For the full year, consolidated total income was ₹5,163 crore, EBITDA was ₹1,284 crore, and PAT was ₹658 crore. YoY, total income grew 61 percent, EBITDA increased 49 percent, and PAT rose 40 percent. Standalone performance was also strong: total income of ₹2,076 crore, EBITDA of ₹923 crore, and PAT of ₹543 crore.

Margins tell the story behind the topline surge. Consolidated EBITDA margin for FY26 was 25 percent versus 27 percent in FY25, and consolidated PAT margin was 13 percent versus 15 percent in FY25. The company explicitly noted the FY26 PAT impact from a one-time exceptional item related to New Labour Codes: ₹14 crore standalone and ₹27 crore consolidated.

Operationally, FY26 was a record year in mining volumes. Manganese ore production reached 0.59 MTPA and iron ore production reached 4.35 MTPA. The company described these as all-time highs. Sales volumes were 0.34 MTPA for manganese ore and 4.10 MTPA for iron ore. Management commentary added more context: manganese production rose 15 percent YoY and sales volumes rose 93 percent YoY, while iron ore production rose 14 percent YoY and sales were up 2 percent YoY.

Ferroalloys also rebounded in FY26 after a weak FY25. Production rose to 51,857 TPA and sales to 56,130 TPA. That matters because the ferroalloys unit is linked to the company’s energy strategy and captive resource positioning. The presentation notes that a turnaround was achieved earlier through feasible power generation, and that the combination of the coke oven plant and waste heat recovery boilers generates power as a by-product, reducing reliance on thermal coal.

Steel is now the other pillar of the consolidated base. The group has 0.585 MTPA cumulative steel manufacturing capacity across two facilities in Andhra Pradesh and Punjab. The steel portfolio is positioned toward specialty steel, particularly auto-grade Special Bar Quality products. The business is described as an integrated manufacturer from coke, sinter, hot metal and billets to value-added bars, with over 100 grades and a customer base that includes automotive OEMs.

Execution themes: logistics, energy self-sufficiency, and capital discipline

A key operational project for FY27 is the Downhill Conveyor System at the mines. The company executed a Forest Lease Agreement for a 1.2 km downhill pipe conveyor system that is expected to be operational within H1FY27. Management expects it to enable more environment-friendly transportation of ore and better realizations because ore can be delivered directly to the railway siding, improving customer logistics. The company also highlighted that it is the first private mine in the Ballari and Vijayanagara districts to set up this system in line with Supreme Court directions.

Energy integration remains central. The group has captive energy arrangements under joint venture companies: 42.9 MW of solar-wind hybrid energy through Renew Sandur and 20.4 MW of solar energy through Arjas Amplus. In addition, SMIORE operates 32 MW of waste heat recovery boiler based power, and Arjas has 21 MW of gas-recovery based capacity. The strategy is not just about sustainability signaling. For power-intensive operations like ferroalloys and steel, the point is cost stability and reliability. The presentation is clear that effective power generation costs reduced significantly after commissioning WHRB and the hybrid renewable project.

Coke is treated as both a product and a utility asset. The coke oven plant has 0.50 MTPA capacity with four batteries, and the company uses waste heat recovery to generate cleaner energy. But near-term economics depend on utilization. With two batteries currently operating under a conversion agreement, management’s FY27 focus is to maintain contracted capacity and expand contract manufacturing through the remaining two batteries. If utilization improves, it can lift both coke-related earnings and internal energy generation.

Finally, capital allocation discipline is visible in debt actions. The company prepaid and redeemed non-convertible debentures worth ₹423 crore in March 2026 ahead of maturity using internal accruals. As of 31 March 2026, standalone cash and cash equivalents were ₹419 crore and consolidated cash and cash equivalents were ₹444 crore. Consolidated net debt to equity was 0.31. The company described itself as standalone net debt free at year-end.

What investors should watch in FY27

The FY27 setup is largely about whether operational levers convert into better earnings quality. Management said it will fully utilize the 4.45 MTPA maximum permissible annual production limits for iron ore, and also has approvals to sell already excavated incremental iron ore production of 0.327 million tonnes. This implies a clear volume runway, assuming dispatch logistics and market demand hold.

Pricing is the other variable. Management described FY26 as muted on realizations, with a bottom in Q2 and Q3, followed by improvement in April. For miners, a modest move in realizations can change earnings quickly because costs are relatively fixed over short periods. Still, the consolidated structure now includes steel, which tends to absorb and reflect broader industrial cycles differently.

Operationally, the conveyor system is worth attention because it is designed to improve realization and customer experience, not just reduce trucking. In parallel, coke utilization and ferroalloys ramp-up can influence captive cost structures and segment profitability. And for Arjas Steel, the company is betting on higher production from existing capacity and recovery in alloy steel and automotive demand, with Q4FY26 already showing better margins than the prior two quarters.

The quarter ended with a clear message from management: FY26 delivered all-time-high mining volumes and a standalone net debt free balance sheet, building a base for accelerated performance in FY27. The group today is no longer only a merchant miner. It is moving toward a more integrated model spanning mining, energy, ferroalloys, coke, and specialty steel. If the company sustains mining execution while lifting utilization in coke and improving steel profitability, FY27 could be less about just scaling revenue and more about improving the earnings mix and resilience.

Takeaways

SMIORE’s Q4FY26 showed that volumes and operational execution can offset a softer pricing environment. FY26 scaled sharply on a consolidated basis, even as margins moderated due to the steel consolidation and mixed realizations in mining. The debt prepayment and year-end liquidity reinforce capital discipline, while the downhill pipe conveyor project points to practical investments aimed at better logistics and realizations. For investors, the near-term questions are straightforward: iron ore dispatches at 4.45 MTPA, progress on the conveyor system in H1FY27, coke utilization beyond two batteries, and whether Arjas Steel can sustain the Q4 margin improvement into FY27.