SMIORE iron ore sales rose 59% in Q2FY27 as steel grew

The Sandur Manganese & Iron Ores Limited (SMIORE) sold 12.45 lakh tonnes of iron ore in Q2FY27, up 59% year on year and 29% sequentially, while steel sales rose 11% year on year to 1.12 lakh tonnes. The volume gains contrasted with lower sales in manganese ore, ferroalloys and coke.

What drove SMIORE's iron ore sales increase in Q2FY27?

SMIORE's iron ore sales increase was driven by shipments rising to 12.45 lakh tonnes in Q2FY27 from 7.86 lakh tonnes in Q2FY26 and 9.64 lakh tonnes in Q1FY27. The 59% year-on-year increase was the largest sales-volume gain among the five disclosed operating segments, while the 29% quarter-on-quarter increase also exceeded the growth reported by steel.

Iron ore production was 11.63 lakh tonnes in Q2FY27, compared with sales of 12.45 lakh tonnes. In Q1FY27, SMIORE produced 13.61 lakh tonnes and sold 9.64 lakh tonnes, reversing the relationship between production and sales in Q2FY27. The presentation does not explain the mechanism behind the difference between quarterly production and sales volumes.

How did SMIORE's mining volumes and realisations compare?

SMIORE's manganese ore production reached 1.36 lakh tonnes in Q2FY27, 6% above 1.28 lakh tonnes in Q2FY26, but sales declined to 0.79 lakh tonnes from 0.81 lakh tonnes. Against Q1FY27, production fell from 1.50 lakh tonnes and sales fell from 0.97 lakh tonnes, leaving manganese volumes lower sequentially despite higher year-on-year output.

SMIORE's manganese ore realisation increased 7% sequentially to Rs 8,502 per tonne in Q2FY27 from Rs 7,954 per tonne in Q1FY27. Iron ore realisation moved in the other direction, declining 4% sequentially to Rs 2,975 per tonne from Rs 3,095 per tonne. Management said manganese realisations were 43% higher year on year, while iron ore's volume growth occurred alongside the sequential pricing decline.

Which SMIORE segments recorded lower sales volumes?

SMIORE's ferroalloy sales fell to 13,429 tonnes in Q2FY27, down 5% year on year from 14,094 tonnes and down 18% sequentially from 16,292 tonnes. Production, however, rose to 14,142 tonnes from 13,130 tonnes in Q1FY27. Ferroalloy realisation was Rs 70,515 per tonne, 1% lower sequentially than Rs 71,005 per tonne.

SMIORE's reported coke sales were 935 tonnes in Q2FY27, down 80% year on year and 56% quarter on quarter, while reported production was zero. The presentation attributes the sales-volume decline to volumes under a conversion contract and excludes 58,984 tonnes of contract-manufacturing production. It also excludes Rs 10.91 crore of conversion and screening income under that arrangement from reported coke operating metrics.

How did SMIORE's steel business compare with mining operations?

SMIORE's steel sales increased to 1.12 lakh tonnes in Q2FY27 from 1.01 lakh tonnes in Q2FY26 and 1.05 lakh tonnes in Q1FY27. Production rose to 1.09 lakh tonnes from 1.01 lakh tonnes a year earlier and 1.05 lakh tonnes sequentially. Steel was the only segment apart from iron ore to record growth in sales volumes in both comparisons.

SMIORE's steel realisation rose 5% sequentially to Rs 78,422 per tonne from Rs 74,385 per tonne in Q1FY27, the highest reported per-tonne realisation among the five segments. Ferroalloys recorded Rs 70,515 per tonne, while iron ore recorded Rs 2,975 per tonne. The portfolio therefore combined higher steel volume and realisation with higher iron ore volume but lower sequential iron ore realisation.

What plans could change SMIORE's operating mix after Q2FY27?

SMIORE said two of its four coke oven batteries were operating under a contract-manufacturing agreement and work had begun to restart the remaining two batteries. Management expects commercial production from those two batteries in Q4FY27. It said the resulting higher energy generation is expected to support higher ferroalloy volumes, following Q2FY27 ferroalloy sales of 13,429 tonnes.

SMIORE also said its beneficiation plant, commenced in Q1FY27, is scheduled for commissioning in Q2FY28, with civil works underway and critical equipment ordered. Separately, the company has applied to raise environmental clearance for run-of-mine iron ore production to 9.42 million tonnes per annum from 7.85 million tonnes per annum, and to reconfigure the proposed beneficiation capacity into two plants of 3.5 million tonnes per annum each.

Conclusion

SMIORE's Q2FY27 operating data show a divided portfolio: iron ore generated the largest volume gain, with sales up 59% to 12.45 lakh tonnes, and steel added 11% sales growth alongside a 5% improvement in realisation. Manganese ore, ferroalloys and coke all recorded lower sales volumes, while sequential realisation movements ranged from a 30% increase for coke to a 4% decline for iron ore.

The next disclosed milestones are the expected Q4FY27 commercial restart of two coke oven batteries and the scheduled Q2FY28 commissioning of the beneficiation plant. Investors can also watch the pending environmental-clearance application for an increase in run-of-mine iron ore capacity from 7.85 million tonnes per annum to 9.42 million tonnes per annum.