SEML targets doubled EBITDA with Rs 10,000 crore-plus capex

Sarda Energy & Minerals Ltd. (SEML) aims to double earnings before interest, tax, depreciation and amortisation (EBITDA) from its FY26 base through more than Rs 10,000 crore of growth capital expenditure. The plan targets 1,362 megawatts (MW) of thermal capacity, 400 MW of renewable capacity and 7.1 million tonnes per annum (MTPA) of coal-mining capacity by FY30.

What is SEML's EBITDA growth target?

SEML's stated target is to double EBITDA over the medium term from the FY26 base. Management links that objective to disciplined execution, operational excellence and a diversified portfolio, rather than providing a separate EBITDA target in rupees or a stated target year beyond the medium-term framing.

The identified investment programme exceeds Rs 10,000 crore and is focused on energy and mining assets that management describes as high-return. The plan makes energy the primary earnings driver with long-term revenue visibility, while positioning mining as a second growth engine through resource expansion. Metals remain part of SEML's diversified earnings mix alongside energy and mining.

The target follows a softer reported standalone first half. In H1 FY27, EBITDA margin was 35.7%, compared with 39.3% in H1 FY26, while Q2 FY27 margin was 29.2%, versus 34.5% a year earlier. SEML attributed the Q2 outcome in part to a planned 47-day maintenance shutdown at its 600 MW thermal power plant.

Which capacity additions support SEML's FY30 plan?

SEML plans to approximately double energy capacity from FY26 to FY30 and to quadruple coal-mining capacity. Thermal power is planned to rise from 762 MW in FY26 to 1,362 MW in FY30E, renewable capacity from 168 MW to 400 MW, and coal-mining capacity from 1.8 MTPA to 7.1 MTPA.

The thermal target represents an addition of 600 MW from FY26, while the renewable target implies an addition of 232 MW. Coal-mining capacity would increase by 5.3 MTPA. The presentation describes the FY26-to-FY30E moves as two-times expansion in thermal and renewable capacity and four-times expansion in coal mining.

The FY30E plan is also substantially larger than the FY21 base. Thermal capacity rose from 162 MW in FY21 to 762 MW in FY26, while renewable capacity increased from 30 MW to 168 MW. The combined FY30E energy portfolio would total 1,762 MW, compared with 192 MW in FY21, consistent with the presentation's 9.0-times energy-capacity comparison.

Coal mining is the largest proportional expansion from the FY26 base. SEML identifies the 2.10 MTPA Bartunga mine as a joint venture in which it holds a 67% share, indicating that partnership structures form part of the mining build-out. The remaining planned growth is linked to new mine development intended to take coal production capacity above 7 MTPA.

How does SEML plan to improve operations as capacity grows?

SEML plans to improve utilisation, operating efficiency and fuel security while commissioning new capacity on time. Its operating model includes captive generation, renewable assets and waste-heat-recovery assets, which management says can support lower-cost and sustainable power generation across its business verticals.

Fuel integration is central to that approach. SEML's energy business is located near its own coal mine and had more than 380 MW of generation capacity secured through long-term and medium-term power purchase agreements, or PPAs, as of March 2026. The presentation also says thermal generation has secured coal supply through long-term fuel-supply agreements.

The mining programme adds a manganese asset to the raw-material plan. The Avagudem manganese ore mine in Vizianagaram district, Andhra Pradesh, has estimated reserves of 0.70 million tonnes and is expected to begin operations in approximately 12 to 14 months, subject to lease execution and approvals. SEML says the mine is expected to strengthen raw-material security for ferro-alloy operations.

What role will energy and mining play in SEML's earnings mix?

SEML expects energy to remain its main earnings driver and mining to become its second major growth engine. Energy contributed more than 70% of consolidated EBITDA, according to the presentation, and the FY30 renewable target of 400 MW sits alongside expansion at the 600 MW thermal power plant.

The strategy seeks to reduce exposure to commodity cyclicality through earnings diversification across energy, metals and mining. In metals, SEML lists steel products, ferro alloys and value-added products, supported by backward-integrated operations. In minerals, it lists iron ore, coal and manganese mines, including access to Indonesian coal resources and upcoming high-grade coal mines.

The stated mechanism is therefore not simply higher installed capacity. Management plans to combine expanded generation with greater resource integration, plant efficiency and governance systems that monitor performance across businesses. The management actions described include strengthening leadership with experienced professionals and building scalable governance and performance-monitoring systems.

What does SEML's balance sheet show before the capex programme?

SEML entered the programme with a net debt-free consolidated position at September 2026, according to the presentation. Consolidated gross debt fell to Rs 2,418 crore from Rs 2,595 crore in March 2026, while net debt moved from Rs 215 crore to negative Rs 210 crore over the same period.

The change in net debt coincided with lower leverage measures. Total outside liabilities to net worth declined to 0.48 times in September 2026 from 0.52 times in March 2026, and consolidated net debt to EBITDA was negative 0.18 times, compared with 0.10 times in March 2026. The presentation also reported liquidity exceeding Rs 2,600 crore.

Credit ratings were upgraded in October 2026. CRISIL assigned SEML an AA/Stable/A1+ rating following a one-notch upgrade, while its ferro-alloys subsidiary SMAL received AA-/Stable/A1+ after a two-notch upgrade. These reported rating actions and the September 2026 debt position provide the financial context for management's proposed Rs 10,000 crore-plus expansion.

Conclusion

SEML's medium-term EBITDA objective rests on a defined capacity programme rather than a disclosed rupee earnings endpoint. Between FY26 and FY30E, the plan calls for 600 MW of additional thermal capacity, 232 MW of additional renewable capacity and 5.3 MTPA of extra coal-mining capacity, with energy remaining the principal earnings source and mining intended to provide a second engine.

The next disclosed markers are progress towards the FY30 targets of 1,362 MW thermal power, 400 MW renewable power and 7.1 MTPA coal mining. The Avagudem mine's expected start in approximately 12 to 14 months is also a near-term milestone, although its timing remains conditional on lease execution and approvals.