Sambhv Steel margin slips as costs outpace revenue growth
Consolidated revenue rose +14.18% qoq, but expenses grew +15.38%; a lower tax rate supported +7.84% net-profit growth.
Filed 29 Oct 2026, 13:28 IST · Sambhv Steel Tubes Ltd (SAMBHV)
Key takeaways
- Consolidated operating margin narrowed 0.91 percentage points qoq to 12.08% as expenses grew +15.38%, faster than revenue at +14.18%.
- Net profit rose +7.84% qoq to Rs 60.95 cr, helped by a 1.61 percentage-point fall in the tax rate to 24.85%.
- Management said its expansion plan targets more than 2.0 MMTPA of finished-product capacity by 2030, from 0.6 MMTPA.
Price around the results
Revenue growth outpaced profit conversion
Sambhv Steel's consolidated revenue increased +14.18% qoq, but operating profit rose only +6.15% as costs absorbed more of the incremental sales. Net profit still grew +7.84% to Rs 60.95 cr, with the operating drag partly offset by lower taxation.
Faster expense growth narrowed the margin
Expenses grew +15.38%, ahead of revenue growth, taking operating margin down 0.91 percentage points to 12.08%. Interest rose +1.41% qoq, while the tax rate fell 1.61 percentage points to 24.85%, which helped net profit grow faster than pre-tax profit. Other income contributed 4.44% of pre-tax profit, so it was a limited part of the earnings mix.
Margin matches the Industrials peer median
The 12.08% operating margin matched the median for the 61 Industrials peers that had reported the same quarter. Sequentially, this was a second-quarter margin decline in the available trend, following 12.99% in Q1FY27; there is no year-on-year comparison in the reported data.
Expansion plans extend beyond the current quarter
Management said its Vision 2030 plan aims to raise finished-product capacity from 0.6 MMTPA to more than 2.0 MMTPA by 2030. The company said its greenfield projects at Kesda and Kuthrel Unit-II are planned to add 1.2 MMTPA in phases, including 0.36 MMTPA of stainless-steel coil capacity with INR 8,100 million of capex targeted for commissioning by Q4FY27. Management also said a brownfield DFT project is targeted to add 150,000 MTPA of structural pipes and tubes capacity by Q2FY28.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹836 cr | ₹732 cr | +14.18% |
| Other income | ₹4 cr | ₹5 cr | -25.16% |
| Expenses | ₹735 cr | ₹637 cr | +15.38% |
| Operating profit | ₹101 cr | ₹95 cr | +6.15% |
| Operating margin (%) | 12.08% | 12.99% | — |
| Interest | ₹11 cr | ₹11 cr | +1.41% |
| Depreciation | ₹13 cr | ₹12 cr | +1.84% |
| Profit before tax | ₹81 cr | ₹77 cr | +5.52% |
| Tax | ₹20 cr | ₹20 cr | -0.88% |
| Net profit | ₹61 cr | ₹57 cr | +7.84% |
| EPS (₹) | ₹2.07 | ₹1.92 | +7.81% |
Operating margin of 12.08% compares with a Industrials sector median of 12.08% across 61 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -3.53% | -4.03% |
Volume on the results session was 0.77× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- Sambhv aims to increase finished product capacity from 0.6 MMTPA to more than 2.0 MMTPA by 2030.
Expansion
- Greenfield expansion at Kesda and Kuthrel Unit-II will add 1.2 MMTPA of finished product capacity in phases.
- Phase I of the greenfield expansion adds 0.36 MMTPA of stainless-steel coil capacity with INR 8,100 million capex by Q4FY27.
- The brownfield DFT expansion will add 150,000 MTPA of structural pipes and tubes capacity by Q2FY28.
New products
- The company is expanding its coated products portfolio with Galvalume-based coils and pipes.
Competition
- Indian firms are positioned as having a mid-cost advantage and growing exports.
What to watch
- Whether expense growth falls below the current +15.38% pace relative to revenue growth of +14.18%.
- Whether operating margin recovers from 12.08% after the 0.91 percentage-point qoq decline.
- Progress against management's stated 0.36 MMTPA stainless-steel coil capacity target for Q4FY27.