SMLT posts 2.81% operating margin as aluminium coils stay subdued
Management cited difficult aluminium market conditions and rising scrap prices, while welding volumes rose 94% year-on-year.
Filed 18 Aug 2026, 16:11 IST · after market close · SMLT (SMLT)
Key takeaways
- SMLT's standalone operating margin was 2.81%, while Rs 1.39 cr of other income made reported profit less operating-led.
- Management said welding revenue reached Rs 5.1 cr, with volumes up 94% year-on-year to 458 tonnes in Q1FY27.
- Management is targeting Rs 25 cr in annual welding sales for FY27 as it scales the business.
Thin operating spread and mixed profit quality
SMLT's standalone Q1FY27 results show a thin operating spread, with operating profit of Rs 1.55 cr against revenue of Rs 55.21 cr. Other income of Rs 1.39 cr was a substantial contributor alongside profit before tax of Rs 2.07 cr, so reported profit was not solely operating-driven. The 35.88% tax rate also absorbed more than a third of pre-tax profit.
Welding growth contrasts with aluminium weakness
Management said cored wire volumes grew 7% year-on-year and order flows retained momentum during the quarter. It also reported welding revenue of Rs 5.1 cr, with volumes up 94% year-on-year to 458 tonnes. The company said aluminium flipping coils remained subdued because of difficult market conditions and tighter scrap availability, while rising primary aluminium prices were pushing scrap prices higher.
Management points to welding scale-up and selective expansion
Management said it aims to reach Rs 25 cr in annual welding sales in FY27. It also said the company has about 450,000 square feet of cumulative land available for future expansion. The company told analysts it is integrating technology with ethanol distilleries to improve fermentation efficiency and reduce operating costs, while further biotechnology investments will wait for greater clarity.
Results were filed after market close
The standalone results were filed after market close on 18 Aug 2026 at 16:11 IST. The stock's immediate response will therefore be assessed in the next trading session rather than in this quarter's results reaction.
Q1FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 |
|---|---|
| Revenue | ₹55 cr |
| Other income | ₹1 cr |
| Expenses | ₹54 cr |
| Operating profit | ₹2 cr |
| Operating margin (%) | 2.81% |
| Interest | ₹0 cr |
| Depreciation | ₹1 cr |
| Profit before tax | ₹2 cr |
| Tax | ₹1 cr |
| Net profit | ₹1 cr |
| EPS (₹) | ₹0.97 |
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Cored wire volumes grew 7% year-on-year in Q1 FY27, with continued momentum in order flows.
- Welding revenue was Rs 5.1 crore and volumes grew 94% year-on-year to 458 tonnes in Q1 FY27.
Guidance & outlook
- The company remains optimistic about opportunities created by India's long-term steel growth across its core businesses.
- The company aims to achieve annual welding business sales of Rs 25 crore in FY27.
- The company aims to scale its welding business towards a Rs 25 crore annual sales target.
Expansion
- The company has land availability for future expansion, with a cumulative plot area of about 450,000 square feet.
New orders
- The company reported continued momentum in cored wire order flows during Q1 FY27.
New initiatives
- The company is integrating technology solutions with ethanol distilleries to improve fermentation efficiency and reduce operating costs.
- The company is pursuing further biotechnology investments only after greater clarity emerges.
Competition
- India's flux-cored wire needs are predominantly met by imports from China.
Problems & risks
- Aluminium flipping coils remained subdued because of difficult market conditions and increasing constraints in aluminium scrap availability.
- Rising primary aluminium prices are further driving up scrap prices.
- Substantial capacity additions have resulted in under-utilisation of several ethanol plants in certain regions.
What to watch
- Whether standalone operating margin holds above 2.81%.
- Whether welding volumes build on 458 tonnes and revenue on Rs 5.1 cr.
- Progress against management's Rs 25 cr FY27 annual welding-sales target.