SEML Billet and Wire Rod Output Fell 56% During Turbine Replacement

Sarda Energy & Minerals Ltd. reported that steel-billet and wire-rod production each declined 56% year on year in H1 FY27 after a 30 megawatt (MW) turbine replacement affected steel production until mid-August. SEML’s pellet plant nevertheless delivered record half-yearly output of 429,059 metric tonnes (MT), while sponge-iron sales increased 76%.

Why did SEML’s steel output fall in H1 FY27?

SEML’s billet and wire-rod output fell because a 30 MW turbine replacement affected steel production until mid-August. Steel-billet production was 48,537 MT in H1 FY27, compared with 111,234 MT in H1 FY26, while wire-rod production was 37,813 MT, compared with 85,882 MT a year earlier. Both product lines therefore recorded a 56% year-on-year reduction.

The quarterly data show a recovery from Q1 FY27 levels after the disruption. Billet output rose 54% sequentially to 29,458 MT in Q2 FY27 from 19,079 MT in Q1 FY27, although it remained 48% below 57,137 MT in Q2 FY26. Wire-rod production rose 89% quarter on quarter to 24,737 MT from 13,075 MT, but was still 44% below 44,005 MT a year earlier.

Sales reflected the lower finished-steel volumes. H1 FY27 billet sales declined 55% to 10,320 MT from 22,832 MT, while wire-rod sales declined 72% to 18,021 MT from 65,154 MT. Q2 FY27 wire-rod sales rose to 13,859 MT from 4,162 MT in Q1 FY27, but remained 57% below the Q2 FY26 level of 32,342 MT.

Which SEML production lines performed better than billet and wire rod?

SEML’s iron-ore pellet plant delivered record half-yearly output of 429,059 MT in H1 FY27, up 1% from 424,982 MT in H1 FY26. Q2 FY27 pellet production was 204,962 MT, down 9% from 224,097 MT in Q1 FY27, but 5% above 194,607 MT in Q2 FY26.

Sponge-iron production declined 9% to 156,258 MT in H1 FY27 from 170,788 MT, but sales increased 76% to 114,054 MT from 64,642 MT. In Q2 FY27, sponge-iron sales of 50,352 MT were 53% higher than 32,944 MT a year earlier, even though production declined 8% to 79,546 MT.

High-carbon, or H.B., wire was another line that increased over the half year. H.B. wire production rose 12% to 20,749 MT from 18,609 MT, and sales also rose 12% to 19,875 MT from 17,755 MT. This contrasted with the 56% production declines in both billet and wire rod.

Did SEML deliberately shift its production mix toward pellets and sponge iron?

SEML disclosed higher pellet production and substantially higher sponge-iron sales alongside lower billet and wire-rod output, but it did not describe the change as a deliberate production-mix strategy. The stated reason for the reduced steel production was the 30 MW turbine replacement, which affected production until mid-August.

SEML also states that part of every product is captively consumed to produce downstream products, and that traded-goods quantities are excluded from sales data. Therefore, H1 FY27 pellet sales of 222,815 MT, down 12% from 254,219 MT, do not represent total pellet production of 429,059 MT or disclose the full volume used internally.

The disclosed sales pattern shows sponge iron moving differently from finished steel during H1 FY27. Sponge-iron sales rose to 114,054 MT, whereas billet sales fell to 10,320 MT and wire-rod sales fell to 18,021 MT. The data indicate a changed product-volume profile during the outage, but SEML did not provide a captive-consumption split or assign a strategic rationale to it.

How did SEML’s other businesses perform in H1 FY27?

SEML’s ferro-alloy production declined 9% to 92,515 MT in H1 FY27 from 101,743 MT, while sales declined 5% to 92,677 MT from 97,820 MT. The Q2 FY27 production figure of 50,867 MT was broadly unchanged from 50,762 MT in Q2 FY26 and was 22% above 41,648 MT in Q1 FY27.

Thermal-power generation was affected by a disclosed 47-day maintenance shutdown at the 600 MW thermal-power plant. Independent power producer, or IPP, generation declined 13% to 2,019 million kilowatt-hours (Mn kWh) in H1 FY27 from 2,312 Mn kWh, while captive thermal generation declined 14% to 600 Mn kWh from 694 Mn kWh. Q2 IPP generation was 894 Mn kWh, down 21% year on year.

Hydropower generation decreased 5% to 458 Mn kWh from 482 Mn kWh, with SEML attributing the decline to weak rainfall in certain catchment areas. Domestic coal production fell 38% to 600,420 MT from 965,204 MT because seasonal conditions constrained evacuation infrastructure. Indonesian coal output declined 17% to 678,272 MT, while iron-ore production was 10% lower at 68,570 MT.

How did H1 FY27 operating disruption affect SEML’s earnings?

SEML reported consolidated revenue from operations of Rs 3,061 crore in H1 FY27, down from Rs 3,161 crore in H1 FY26, while earnings before interest, tax, depreciation and amortisation (EBITDA) increased 3.9% to Rs 1,326 crore from Rs 1,277 crore. EBITDA margin increased to 41.2% from 38.6%. SEML said the H1 revenue and EBITDA figures include one-time prior-period tariff true-up income relating to its Sikkim hydropower plant.

The consolidated business mix moved further toward energy. Energy accounted for 52% of H1 income from operations, compared with 48% in H1 FY26, and represented 78% of earnings before interest and tax, or EBIT, compared with 72%. Steel’s income share declined to 25% from 28%, while its EBIT share declined to 10% from 16%.

Consolidated profit after tax rose 4.5% to Rs 799 crore from Rs 764 crore, and cash profit increased to Rs 1,225 crore from Rs 1,158 crore. Management described Rs 1,326 crore of H1 FY27 EBITDA as SEML’s highest half-yearly result and cited the integrated operating model and diversified businesses despite planned shutdowns and operational outages.

Conclusion

SEML’s H1 FY27 results combined sharply lower finished-steel volumes with record pellet production, higher sponge-iron sales and a greater energy contribution to consolidated earnings. Revenue from operations fell Rs 100 crore year on year to Rs 3,061 crore, while EBITDA rose Rs 49 crore to Rs 1,326 crore, including the disclosed Sikkim hydropower tariff true-up income.

The disclosed forward operating milestone is the Avagudem manganese-ore block in Andhra Pradesh, where Sarda Metals & Alloys Limited, a wholly owned SEML subsidiary, was declared preferred bidder. The block has estimated reserves of 0.70 million tonnes, and SEML indicates operations could start in 12 to 14 months, subject to approvals and mine development.