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SMIORE FY26: Record mining volumes, a bigger steel footprint, and rapid deleveraging

The Sandur Manganese and Iron Ores Limited (SMIORE) ended FY26 with a sharp jump in consolidated scale after the inclusion of Arjas Steel, while mining remained the backbone of cash generation. For FY26, consolidated total income stood at ₹5,163 crore with EBITDA of ₹1,284 crore and PAT of ₹658 crore. The consolidated EBITDA margin was 25 percent.

Q4 FY26 showed improved momentum, with consolidated total income of ₹1,531 crore, EBITDA of ₹406 crore and PAT of ₹236 crore. The quarter also reflected stronger dispatches across key products, even as the company acknowledged that FY26 saw muted commodity realisations, with prices bottoming out in Q2 and Q3 before improving in April.

Mining stayed the bedrock, with record volumes

Mining is still SMIORE’s mainstay, and FY26 volumes were the highest the company has reported. Iron ore production reached 4.35 million tonnes in FY26 with sales of 4.10 million tonnes. Manganese ore production was 0.59 million tonnes, while sales were 0.34 million tonnes, with management also highlighting increasing captive consumption into ferroalloys and improving dispatches across the four quarters.

In Q4 FY26, the operating data shows iron ore sales of 15.10 lakh tonnes and manganese ore sales of 1.20 lakh tonnes. Realisations were mixed. Q4 iron ore realisation was ₹2,834 per tonne, marginally lower sequentially, while manganese ore realisation was ₹6,935 per tonne, up 7 percent QoQ.

Management’s FY27 stance is more volume-led. The company stated it intends to fully utilise the 4.45 MTPA Maximum Permissible Annual Production Limits for iron ore in FY27. It also stated that it has approvals to sell already excavated incremental iron ore amounting to 0.327 million tonnes, in addition to the annual production limit. This becomes important because the company said it carried closing stock of iron ore from FY26.

Metals platform: ferroalloys, coke and energy, and steel

SMIORE’s forward integration is visible through its ferroalloys, coke and energy, and steel operations.

Ferroalloys volumes recovered in FY26 after a weak FY25. The company reported FY26 production of 51,857 tonnes and sales of 56,130 tonnes, versus FY25 production of 17,954 tonnes and sales of 27,389 tonnes. In Q4 FY26, ferroalloys sales were 18,241 tonnes, with average realisation of ₹67,773 per tonne. Management noted that ferroalloys production improved sequentially across each quarter of FY26, and that realisations have started to show initial signs of recovery as the broader iron and steel operating environment turns more supportive.

Coke and energy continues to be run with a conversion focus. The company has a 0.5 MTPA coke oven plant and 32 MW of waste heat recovery boiler capacity. However, management stated only 2 of the 4 batteries are operational, and utilisation is around 46 percent. In Q4 FY26, coke sales were 5,181 tonnes, with stated realisation of ₹21,432 per tonne, and the company clarified that production under contract manufacturing and certain conversion income are excluded from these reported operating metrics.

Steel is now positioned as the new growth engine after the acquisition of Arjas Steel, consolidated from 11 November 2024. The company cited a cumulative steel capacity of 0.585 MTPA across two facilities, one in Andhra Pradesh and one in Punjab, and highlighted its positioning in specialty steel, particularly Special Bar Quality steel products. In Q4 FY26, steel sales were 1.10 lakh tonnes with realisation of ₹70,361 per tonne. Management noted improved production and dispatches in Q4 and improvement in EBITDA margins versus the prior two quarters, and expects stronger performance from Arjas Steel in FY27 supported by potential to increase production from existing capacities and a more conducive environment for alloy steel and automotive industries.

Financial summary

Note: FY26 PAT includes a one-time exceptional item related to new labour codes of ₹14 crore (standalone) and ₹27 crore (consolidated).

Capital allocation and balance sheet: rapid deleveraging

A key highlight of the FY26 narrative is deleveraging. The company stated that it prepaid and redeemed Non-Convertible Debentures worth ₹423 crore in March 2026 through internal accruals, ahead of maturity. Management also stated that SMIORE achieved standalone net debt free status as of 31 March 2026.

Liquidity appears healthy based on the company’s disclosures, with standalone cash and cash equivalents of ₹419 crore and consolidated cash and cash equivalents of ₹444 crore. The company also reiterated its A plus stable rating from CRISIL and ICRA for its term loans and cash credit.

Shareholder returns were not ignored. Management stated the board recommended a final dividend of ₹0.5 per equity share, subject to shareholder approval at the AGM.

Logistics and sustainability: the Downhill Conveyor System

Among the clearer, time-bound projects discussed is the Downhill Conveyor System at the mines. The company stated it executed a Forest Lease Agreement for a 1.2 km long Downhill Pipe Conveyor System. The project is expected to be operational within H1 FY27.

Management described two expected outcomes. First, it enables environment-friendly transportation of ore. Second, it is expected to help the company achieve better realisations by delivering ore directly to the railway siding, improving ease for customers. The company also stated it is the first private mine in Ballari and Vijayanagara districts to set up such a downhill pipe conveyor for ore evacuation in line with directions of the Supreme Court.

This theme is aligned with other sustainability points highlighted in the presentation, including renewable and recovery-based energy capacities and the company’s recognition for mining sustainability practices.

Takeaways from FY26 and what to track in FY27

SMIORE’s FY26 presentation is fundamentally about scale and integration, but with a balance sheet lens. Mining volumes hit record highs, and management is explicitly guiding to full utilisation of the iron ore production limit in FY27, plus monetisation of approved already excavated incremental iron ore of 0.327 million tonnes. That offers a volume lever that is not dependent on new mine development timelines.

The second lever is execution in the downstream chain. Steel under Arjas is still in the early integration phase, and management expects better FY27 performance. The third lever is operational discipline in coke and ferroalloys, particularly improving coke battery utilisation and using the energy advantages of the integrated system.

The key qualifier is pricing. Management acknowledged FY26 was muted on realisations and pointed to April improvement as a better start to FY27. If volumes ramp as guided and realisations remain supportive, SMIORE’s integrated operating model and lower leverage position it for a stronger year on both cash generation and returns on capital. */