Metrics raised 2
- CRM Complex EBITDA margin target raised to 10-11% (from 7-8% earlier)
- CRM Complex capex revised up to INR1,100 crore (from INR950 crore earlier)
Metrics cut 4
- FY27 pellet production guidance cut to slightly below 4.0M tons (from 4.0M tons)
- Integrated steel plant (1M ton) placed in indefinite abeyance; removed from Vision 2030 targets (previously a key growth project)
- CRM Complex commissioning delayed to December 2027 (Q3 FY28), ~6 months behind prior timeline
- Solar expansion: 250MW project kept in abeyance (deferred) due to CRM relocation and land allotment delays
Godawari Power And Ispat Limited - Q1 FY27 Earnings Call Summary Monday, August 10, 2026, 12:00 PM IST
Event Participants
Executives
3 Abhishek Agrawal, Dinesh Gandhi, Sanjay Bothra
Analysts
4 Aman Kothari, Manav Gogia, Stuti Agarwal, Sunil Jain
(Plus several unidentified participants)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | YoY + QoQ growth | Healthy sales volume and improved realization across key product segments; no absolute figure disclosed in call |
| EBITDA Margin | 19.1% | Broadly stable YoY; softer sequentially on elevated input costs (market iron ore procurement + imported coal) |
| PAT Margin | 12.7% | Largely tracked EBITDA; stable YoY, softened QoQ on same cost pressures |
| Iron Ore Mining Volume | Declined YoY | Overburden dumping space constraints; tree-cutting approval pending on additional government land |
| Pellet Capacity Utilization | 77% (Q1) | 4.7M ton expanded capacity; expected to ramp up to 80-85% during FY27 |
| Pellet Realization | ~INR10,000/ton | Recovering from INR8,700/ton low (early July); range INR9,000-11,000/ton; iron ore at mines INR5,000-5,500 |
| Imported Coal Cost | ~INR13,000/ton | Up from INR10,500 (Q4/early Q1); +25% driven by West Asia crisis |
| Mining Cost | INR3,000-3,500/ton | Elevated on lower mining volumes; target below INR2,700/ton from FY28 |
| CapEx Incurred (cumulative) | BESS: INR501 cr; Beneficiation: INR218 cr | Major projects progressing; combined capex of ~INR2,000 cr for remaining FY27 + FY28 |
Geographic & Segment Commentary
Iron Ore Mining: Q1 volume declined YoY due to overburden dumping space constraints—pending tree-cutting approval on additional government land. Mining cost currently INR3,000-3,500/ton, elevated on lower volumes; target below INR2,700/ton from FY28. FY27 guidance of 3.4M tons on track. Private land dumping started; government approvals expected by end September, ramp-up from Q3, full capacity by Q4 FY27/Q1 FY28. Boria Tibu mine expansion progressing—TOFR filing in preparation; expansion from 0.7M to 4M tons by 2031 with 4M beneficiation capacity (output 1.5-2M tons concentrate at 45-50% feed grade).
Pellet: 4.7M ton expanded capacity operated at 77% utilization in Q1. One 2M ton plant shut down mid-July (commercially unviable—market iron ore procurement + 40-45% higher gas prices); expected to remain shut in August, possible restart in September. Two export vessels shipped in June-July at ~INR9,000 ex-plant. Market prices recovering to ~INR10,000/ton from INR8,700 low; demand revived in the last 2-3 weeks. FY27 production guidance likely slightly lower than 4.0M tons.
Sponge Iron, Billets & Wire Rods: Healthy YoY production growth; realizations improved across most products both YoY and QoQ. Sponge iron and wire rods were key exceptions on sequential basis—showing growth. Value-added product portfolio recorded healthy YoY growth led by sponge iron, billet, and roll production.
Galvanized Products: YoY volume decline—seasonal monsoon effect (project delays), expected to normalize post-monsoon. Not indicative of structural weakness.
Company-Specific & Strategic Commentary
Integrated Steel Plant (1M ton): Project placed in abeyance indefinitely due to delay in water allocation approval (LOI issued but confirmation pending ~6-8 months; 9.4 MCM allocation). Management advises viewing as an optional medium-term growth project. Removed from Vision 2030 targets in revised investor presentation.
CRM Complex (0.7M ton): Relocated from Chhattisgarh to Sambhaji Nagar, Maharashtra—35 acres, land cost
INR50 crore. Land allotment expected by end August 2026; construction from October 2026; commissioning targeted December 2027 (Q3 FY28)—6 month delay. Capex revised to INR1,100 crore (INR950 crore earlier; +15-20% on one-time land/infrastructure costs; includes working capital margin money); INR550 crore debt, balance internal accruals. Maharashtra incentives expected to boost margins by 2-3% (target 10-11% vs earlier 7-8%).BESS (20GW): On track for commissioning Q1 FY28. Soil testing completed; compound wall construction underway; key equipment and raw material supply agreements finalized including long-term sale procurement. Supported by Maharashtra state incentives. INR501 crore capex incurred.
Solar Expansion (165→290MW): 25MW commissioned May 2026; 100MW under construction targeted September 2026; 250MW project kept in abeyance (CRM relocation freed solar consumption + land allotment delays). 45MW BESS for Kephal Solar Plant targeted commissioning Q3 FY26.
Beneficiation Plant (Aridongri): INR218 crore capex incurred; commissioning Q3 FY27. Will strengthen captive iron ore security, reduce mining cost (currently paying INR1,000/ton transportation to beneficiate at factory complex), improve ore quality for pellet production. Market iron ore procurement to fall to 25-30% in Q3, below 10% in Q4, nil from FY28.
ESG & Decarbonization: CBAM emission intensity 3,180 tCO2/ton steel (improved 1.9% QoQ, 4.2% YoY from 3,244 t fixed carbon); WSA methodology 2.485 tCO2/ton (target 2.49206 by GoI). EV fleet expanded to 15 dumpers, 24 loaders, 15 excavators—reducing operating cost ~75% and CO2 ~88%. WRHB capacity now 49MW; 5 TPD carbon capture project with IIT Bombay targeted end FY27.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Iron Ore Mining | FY27: 3.4M tons (on track) | Q3 ramp-up; full capacity by Q4 FY27/Q1 FY28 pending tree-cutting approvals (expected end September) |
| Pellet Production | FY27: slightly lower than 4.0M tons | Being revised due to plant shutdown since mid-July; Q2 expected ~500KT; restart possible September |
| Beneficiation Plant | Commissioning Q3 FY27 | Full captive iron ore feed; mining cost target <INR2,700/ton from FY28 |
| CRM Complex | Commissioning December 2027 | Land allotment Aug-end 2026; construction October 2026; margins 10-11% (with Maharashtra incentives) |
| BESS (20GW) | Commissioning Q1 FY28 | Machine deliveries from December; commercial quoting started August 2026 |
| Solar Expansion | 100MW by September 2026 | 45MW storage for Kephal solar by Q3 FY26; 250MW in abeyance |
| DR-Grade Pellets | Entry from FY28 | Requires 100% captive feed to control quality; Middle East export target |
| Boria Tibu Mine | Expansion 0.7M→4M tons by 2031 | TOFR filing in preparation; beneficiation plant trials ongoing; output 1.5-2M tons concentrate |
| Vision 2030 | 4x revenue, 3x EBITDA/PAT | Revised: steel plant removed from targets; CRM + BESS drive growth |
Risks & Constraints
| Risk | Context |
|---|---|
| Steel plant indefinite delay | Water allocation confirmation (9.4 MCM) pending 6-8 months; project in abeyance; management advises viewing as optional. No timeline for revival—dependent on state government approvals |
| Elevated input costs | Imported coal at ~INR13,000/ton (vs INR10,500) and gas up 40-45% (PNRGB guidelines); Q2 likely to remain elevated; West Asia crisis uncertainty persists; mitigation via captive mining ramp-up |
| Pellet market price weakness | Prices touched INR8,700/ton early July (COVID-level lows) making operations unviable; recovery to ~INR10,000/ton; still exposed to steel demand sentiment; export channel available as backstop |
| Iron ore price downside risk | Simandou (low-cost Guinea supply) ramping up pressures global prices; management expects $90-100 range short-term; captive mining largely insulates GPIL |
| Regulatory approval delays | Recurring delays across projects—tree-cutting permits, water allocation, EC approvals, land allotment; 6-8 months delays observed; not in company control per management |
| Market iron ore procurement dependence | Q2-Q3 purchases elevated (25-30% Q3 targeted); volatile merchant pricing impacts margins; reductions expected from Q4, elimination FY28 |
Q&A Highlights
Integrated Steel Plant Status
- Question: What conditions need to be satisfied before board revives the steel plant? Should we view it as optional now? (Manav Gogia)
- Answer: Water allocation LOI received but confirmation letter delayed 6-8 months—this is the key blocker. For investors, best to treat steel plant as an option in medium-term planning. Vision 2030 targets were revised—steel plant removed from the investor presentation entirely. (Abhishek Agrawal)
CRM Relocation & Margin Accretion
Question: Does the steel plant delay impact BESS or CRM? Any benefits from moving closer to Maharashtra? (Manav Gogia)
Answer: BESS was always planned for Maharashtra—no change. CRM relocation adds benefits: proximity to auto hub (local consumption of value-added steel), better Maharashtra state incentives, and no concerns on HR coil procurement (JSW, Jindal, AMNS in Gujarat). (Abhishek Agrawal)
Question: Will relocation improve profitability versus earlier guidance? (Sunil Jain)
Answer: EBITDA margins should improve by 2-3% from incentives, targeting 10-11% vs earlier 7-8% guidance on the CRM complex. Maharashtra industrial policy incentives are better than Chhattisgarh. (Abhishek Agrawal / Dinesh Gandhi)
Iron Ore Mining Ramp-Up & Captive Procurement
Question: Will mining production challenges continue in Q2? (Manav Gogia)
Answer: Private land dumping formalities completed—operations started. Government land approvals (tree cutting, entry permission) expected by end September. Q2 mining numbers similar to Q1; ramp-up from October; full capacity by Q4 FY27 or Q1 FY28. Q2 pellet production dull—one 2M ton plant shut. (Abhishek Agrawal)
Question: When will merchant iron ore purchases be eliminated? (Manav Gogia)
Answer: Q3: 25-30% market purchase; Q4: below 10%; FY28: 100% captive. Beneficiation plant commissioning enables this trajectory. (Abhishek Agrawal)
Pellet Plant Shutdown & Gas Supply
- Question: Is the pellet shutdown due to gas supply issue or cost? Will it normalize post-Q2? (Aman Kothari)
- Answer: Gas supply secured 100%, but per new PNRGB guidelines, purchase price up 40-45%. Combined with market iron ore procurement, pellet operations became commercially unviable—prices hit INR8,700 low. August also expected to be shutdown; possible September restart. (Abhishek Agrawal)
Cost Breakdown & Sensitivity
Question: Material cost up 40%—can you separate the components? (Rohan Mehta)
Answer: 75% from iron ore (market vs captive) and 25% imported coal (INR10,500→INR13,000). Domestic coal stable. Q2 to remain elevated—prices not reduced to Q4 levels. Gas situation uncertain—dependent on West Asia conflict outcomes. No acquisition timeline available. (Abhishek Agrawal)
Question: What's pellet sensitivity to iron ore price changes? (Aman Kothari)
Answer: INR100 down in pellet price = INR40 crore annual EBITDA impact (on 4M tons). Iron ore price movement matters less—pellet prices driven primarily by steel sentiment. (Abhishek Agrawal)
BESS Commercial Strategy
- Question: Any customer discussions or commercial arrangements for BESS? (Aman Kothari)
- Answer: Quoting containers in market since August; participating in tenders with back-to-back guarantee model with developers (if they win, GPIL supplies). Domestic EMS and PCS tied up per government directive (20% made-in-India component achieved). (Abhishek Agrawal)
Capex & Capital Allocation
Question: How should we model capex for FY27-28 given steel plant removal? (Manav Gogia)
Answer: Number shared in presentation: ~INR2,000 crore for remaining FY27 and entire FY28. CRM ~INR1,000 crore balance, BESS ~INR700-800 crore balance, plus mining capex. No debt required for current projects—internal accruals sufficient. (Abhishek Agrawal)
Question: What are plans for excess cash generation going forward? (Miteen Shah)
Answer: Current projects funded through internal accruals; decision on cash surplus will be taken after clarity on integrated steel plant. (Dinesh Gandhi)
CRM Capex Revision
- Question: Was there a budgeted capex revision for CRM? (Stuti Agarwal)
- Answer: Capex revised from INR950 crore to INR1,100 crore (+15-20%), mostly one-time land/infrastructure costs (since no common infrastructure with steel plant now). Land ~INR50 crore for 35 acres. Some working capital margin money also included. (Abhishek Agrawal / Dinesh Gandhi)
Boria Tibu Mine Expansion
- Question: Status of TOFR filing for Boria Tibu? (Aman Kothari)
- Answer: Documents being prepared; beneficiation plant trials underway. Filing planned; expansion expected around FY31 (April 2031): 0.7M→4M tons mining, 4M beneficiation. Current output 0.2-0.3M tons; full 0.7M run-rate from next year. Low-grade ore (45-50%) yields 1.5-2M tons concentrate at 65%+. (Abhishek Agrawal)
DR Pellet Entry
- Question: Plans for DR-grade pellet exports given premium? (Aman Kothari)
- Answer: Entry only after 100% captive feed achieved (FY28) to maintain quality consistency. Middle East target market; high premiums justify economics. (Abhishek Agrawal)
Janki Pigments Divestment
- Question: What drove the stake sale in Janki Pigments? (Unidentified)
- Answer: Partial sale of ~INR25 crore stock. Strategy under review—succession planning concerns, operational difficulty (Jammu/Kota location), and competing capital demands (CRM, BESS). May offload more if promoters desire. No timeline. (Dinesh Gandhi)
Key Takeaway
GPIL delivered a steady Q1 FY27 with revenue growth on YoY and QoQ basis, though EBITDA/PAT margins softened sequentially to 19.1%/12.7% on elevated input costs—75% from forced merchant iron ore procurement and 25% from imported coal (INR10,500→INR13,000/ton). The 1M-ton integrated steel plant was placed in indefinite abeyance (water allocation approval pending 6-8 months), with the 0.7M-ton CRM complex relocated to Maharashtra, targeting December 2027 commissioning with 10-11% margins on state incentives. One of three pellet plants (2M-ton) shut since mid-July due to unviable economics—market ore plus 40-45% higher natural gas prices—pressuring FY27 pellet volumes slightly below the 4.0M-ton guidance. Strategic inflection hinges on beneficiation plant commissioning in Q3 FY27, transitioning market ore purchases from 25-30% (Q3) to below 10% (Q4) and 100% captive by FY28, cutting mining costs below INR2,700/ton. BESS (20GW) remains on track for Q1 FY28 commercial rollout with quoting already started; DR-grade pellet exports targeted from FY28. Key watchpoints: regulatory approval timelines, West Asia energy price persistence, and pellet demand recovery.