BTTV Exclusive: Sarda Energy on FY27 outlook; energy, mining to drive next phase of growth

Sarda Energy & Minerals Ltd expects strong momentum across its energy and metals businesses in the coming quarters, backed by resilient power demand, improving operating conditions and the phased commissioning of new coal mines, Executive Director Nilay Joshi told BTTV. He said the company’s business remains diversified, with the energy segment contributing more than 70 per cent of EBITDA and metals making up the rest.

Joshi said Sarda Energy delivered a healthy operational performance in the June quarter despite planned and unplanned shutdowns. “Even after excluding one-time gains, EBITDA remained above Rs 600 crore during the quarter,” he said, attributing the resilience to the company’s diversified business model.

The company remains optimistic about its energy business, with power demand continuing to stay robust. Joshi said electricity prices on power exchanges have remained firm even though the second quarter is usually a seasonally weaker period for demand.

He said hydropower generation is expected to strengthen in the coming quarters, with the second and part of the third quarter being the peak generation season. While Sarda Energy’s hydropower operations in Sikkim faced around 12 to 13 days of disruption because of the collapse of a transmission tower, generation in the June quarter remained at par with last year’s record levels.

On concerns around an uneven monsoon, Joshi said rainfall patterns have become more region-specific rather than uniformly weak. He said Chhattisgarh received below-normal rainfall during the first quarter, while Sikkim saw strong rainfall that supported hydropower generation. He added that rainfall has improved in both regions in the ongoing quarter and said he does not expect any significant impact on hydropower output.

In the thermal power business, Joshi said the company is targeting a higher plant load factor of around 85 per cent this financial year, supported by sustained demand and stable power prices.

The metals business is also expected to recover after production was hit in recent quarters by the replacement of a 30 MW captive power turbine. Joshi said the shutdown reduced power availability and temporarily affected production levels. The replacement is expected to be completed during the current month, which should allow operations to normalise.

Looking ahead, he said the next few quarters are expected to be significantly stronger for the metals business as production ramps up after the completion of maintenance activities.

Beyond its existing energy and metals operations, Sarda Energy is building mining into a major standalone business vertical. The company currently operates one thermal coal mine and plans to commission four high-grade coal mines in phases over the next few years.

The first of these, the Shahapur West high-grade coal mine, is expected to begin production in the fourth quarter of the current financial year. Joshi said the mine will help replace imported high-grade coal used by the company, lower costs and provide an incremental EBITDA contribution in FY27, with the full financial benefit expected from the following year.

“Every year, you will see some action on mining,” he said, referring to the company’s strategy to diversify earnings and strengthen resource security through captive mining assets.

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