Recently, while screening for stocks for our Premium Members, I came across Godawari Power & Ispat.
The company is engaged in the business of mining of Iron Ore and manufacturing of Iron Ore Pellets, Sponge Iron, Steel Billets, etc. with generation of Electricity.
What caught my attention was company recently allotted 2.04 crore warrants at Rs 245/- per warrant and promoters subscribed to 48% of the same. Further, company will soon expand its mining capacity from 3 MTPA to 6 MTPA.
Preview: How expansion from 3→6 MTPA, pellet capacity, CRM plan and renewable projects could reshape growth — notes inside.
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Godawari Power & Ispat Q2 FY 26 concall notes
Source: Godwari Power presentation
H1 FY26 Performance
- Revenue remained stable, supported by higher pellet and galvanized products volumes.
- EBITDA margin: 22% | PAT margin: 14% (healthy despite softer realizations).
- Strong YoY volume growth:
- Iron ore mining: +16%
- Pellets: +18%
- Value-added steel: +16%
- Pellet sales: +30%
Q2 FY26 Performance
- Revenue, EBITDA, and PBT were lower YoY due to weaker realizations and seasonal price corrections in pellets and rolls.
- Margins remained strong: EBITDA 20%, PAT 12%.
- QoQ production recovery:
- Mining: +23%
- Pellets: +31%
- Value-added steel: +5%
- Pellet sales: +71%
- Realizations remained weak across products except ferro and galvanized steel.
Strategic Growth & Project Updates
A. Iron Ore Mining Expansion
- Expansion of Aridong mine from 2.35 MT to 6 MT underway.
- Public hearing completed; environmental clearance expected by Dec 2025 (as per commentary).
- Ramp-up plan:
- FY27: 4.5–5 MT
- FY28 onward: 6 MT full capacity
- Captive pellet plant requires 5.7–5.8 MT of iron ore annually—target is full captive sourcing.
Bodatibu Mine
- Operations resumed in May 2025; grade: 47–50% Fe.
- Expected to supply 0.5 MT raw ore annually → 0.3 MT concentrate.
- Major capex planned only after two years.
Pellet Capacity Expansion
- 2 MT pellet plant expansion in advanced stages.
- Pre-commissioning trials ongoing; awaiting consent to operate.
- Commercial production announcement expected soon.
- Ramp-up expected within 4–6 weeks; plant to operate at 80–85% by Q4 FY26.
- FY27 pellet production target: 4 MT (minimum).
Steel & CRM Complex
- Land acquisition complete: 452 acres secured.
- CRM capacity: 0.7 MT; project cost: ₹900 Cr (₹600 Cr debt).
- Strategy: Purchase HRC from the market and convert into high-margin CRM products.
- Typical conversion margin: 7–10%.
- Proposal for a 1 MT integrated steel plant will be taken to the board after mining expansion stabilizes.
- CRM commercial production: April 2027 (FY28).
- Yr-1 utilization: 50–60%
- Yr-2 utilization: >80%
Renewable Energy & BESS
Solar Power
- Additional 150 MW sanctioned; total planned: 250 MW captive solar.
- Solar will feed CRM + upcoming steel plant; replaces thermal usage.
- Project IRR: ~24% due to lower captive power cost (~₹5.50/unit vs grid cost ₹7.7–8/unit).
- No further investment in fossil-fuel power plants.
Battery Energy Storage System (BESS)
- 10 GWh BESS project under Gavri New Energy Pvt Ltd.
- Land (120 hectares) acquired; project cost ₹700 Cr (50:50 debt:equity).
- ₹175 Cr equity infused to date.
- Commercial production: April 2027 (FY28).
- Cells imported from China; PCS and EMS sourced/manufactured locally per policy
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Disclaimer: This is not a recommendation to buy/sell any of the stocks mentioned above. The securities quoted are for illustration only and are not recommendatory.
Ekansh Mittal
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