Sarthak Metals Q2 revenue rises 44% as welding grows

Sarthak Metals Limited reported revenue from operations of Rs 52.37 crore in Q2 FY27, up 44% year on year, led by a 37% rise in cored-wire volume to 1,463 tonnes and a 38% increase in welding volume to 465 tonnes. Aluminium flipping-coil volume, however, fell 13% to 156 tonnes amid scrap-supply constraints.

Why did Sarthak Metals’ Q2 FY27 revenue rise 44%?

Sarthak Metals’ revenue from operations rose to Rs 52.37 crore in Q2 FY27 from Rs 36.31 crore in Q2 FY26, while total income increased 45% to Rs 52.86 crore. Revenue was 5% below Rs 55.21 crore in Q1 FY27, showing that the year-on-year expansion was not matched sequentially.

Operating expenses rose 45% year on year to Rs 50.13 crore from Rs 34.66 crore. Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 36% to Rs 2.24 crore from Rs 1.64 crore, while profit before tax rose 98% to Rs 2.03 crore from Rs 1.03 crore.

Profit after tax was Rs 1.28 crore in Q2 FY27, up 68% from Rs 0.76 crore a year earlier but 4% below Rs 1.33 crore in Q1 FY27. Earnings per share were Rs 0.92, compared with Rs 0.57 in Q2 FY26 and Rs 0.97 in Q1 FY27, while EBITDA margin was 4.27%, up 146 basis points sequentially but 26 basis points below the prior-year level.

How did Sarthak Metals’ cored-wire and welding businesses perform?

Sarthak Metals’ cored-wire business recorded Rs 39 crore of Q2 FY27 revenue as volume rose 37% year on year to 1,463 tonnes. Realisation increased 7% sequentially to Rs 2.64 lakh per tonne from Rs 2.46 lakh per tonne in Q1 FY27 and was above Rs 2.37 lakh per tonne in Q2 FY26.

Cored-wire volume was also higher than 1,332 tonnes in Q1 FY27 and 1,065 tonnes in Q2 FY26. Management described cored wires as the backbone of the business, cited ferro titanium as an area of strength, and said several new steel capacities are expected to start by Q4 FY27.

Welding volume increased 38% year on year to 465 tonnes in Q2 FY27 from 338 tonnes, and was above 458 tonnes in Q1 FY27. Welding realisation rose 8% sequentially to Rs 1.20 lakh per tonne from Rs 1.12 lakh per tonne, while the operational summary reported Rs 6 crore of segment revenue.

Management separately reported welding revenue of Rs 5.6 crore for Q2 FY27, up 49% year on year. It said the business has annual flux-cored-wire capacity of 3,600 tonnes and makes seven grades across carbon steel, stainless steel and hardfacing categories.

Why did Sarthak Metals’ aluminium flipping-coil business weaken?

Sarthak Metals’ aluminium flipping-coil volume fell 13% year on year to 156 tonnes in Q2 FY27, with Rs 4 crore of revenue. The volume was below both 180 tonnes in Q2 FY26 and 202 tonnes in Q1 FY27.

Aluminium flipping-coil realisation declined 19% sequentially to Rs 2.80 lakh per tonne from Rs 3.47 lakh per tonne in Q1 FY27. It remained above the Rs 2.68 lakh per tonne reported in Q2 FY26, but the sequential decline occurred alongside lower volumes.

Management attributed the 156-tonne volume to continuing constraints in aluminium scrap availability. It said export restrictions on aluminium scrap in a growing number of countries and firm primary aluminium prices had kept scrap costs elevated, and it did not disclose a recovery target for the segment.

What are Sarthak Metals’ welding and capital-allocation plans?

Management is targeting Rs 25 crore of welding sales in FY27 after reporting Rs 5.6 crore of welding revenue in Q2 FY27. It cited certifications, including Research Designs and Standards Organisation and Bureau of Indian Standards certifications, and a dealer network spanning more than five states as supports for expansion.

The presentation estimated the domestic flux-cored-wire market at Rs 500 crore to Rs 600 crore and put average imports at more than 14,500 tonnes per annum over 2020 to 2022. Sarthak Metals’ initial announced quantity was more than 1,200 tonnes per annum, and management presented the import data as an import-substitution opportunity rather than a sales forecast.

Management said lower inventories and receivables helped generate operating cash flow of Rs 4.1 crore in H1 FY27. Short-term borrowings fell to Rs 2.6 crore from Rs 6.6 crore in March 2026, while H1 FY27 revenue rose 30% to Rs 107.6 crore and profit after tax increased 43% to Rs 2.6 crore.

In biotechnology, Sarthak Metals had invested Rs 50 lakh, mainly in a pilot research and development facility in Nagpur, equipment and advisory fees. Management said further investment would depend on greater commercial clarity, citing under-utilisation in parts of the ethanol industry and potential regional overcapacity.

Conclusion

Sarthak Metals combined 44% year-on-year revenue growth in Q2 FY27 with a 36% rise in EBITDA to Rs 2.24 crore. Cored-wire volume reached 1,463 tonnes and welding volume reached 465 tonnes, while aluminium flipping-coil volume fell to 156 tonnes and its realisation declined sequentially to Rs 2.80 lakh per tonne.

The next disclosed milestones are management’s Rs 25 crore FY27 welding-sales target and the expected start-up of several new steel capacities by Q4 FY27. Aluminium scrap availability and costs, as well as any decision to invest beyond the Rs 50 lakh biotechnology outlay, remain unresolved matters disclosed by management.