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Vardhman Special Steels Ltd

| Quarterly Financial Results Q3 FY 2025–26

BULLISH SENTIMENT

Report Source

⬤20th Jan 26

Summary : Vardhman Special Steels reported strong unaudited financial results for Q3 and 9M 2025, driven by steel manufacturing and supported by government incentives and solar power investments, while actively assessing new Labour Code impacts.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Cost of materials consumed: Q3 2025 - 24,341.26 lakhs, 9M 2025 - 73,302.01 lakhs.
  2. Employee benefits expense: Q3 2025 - 2,918.90 lakhs, 9M 2025 - 8,453.68 lakhs.
  3. Finance cost: Q3 2025 - 368.72 lakhs, 9M 2025 - 914.83 lakhs.
  4. Depreciation and amortisation expense: Q3 2025 - 799.27 lakhs, 9M 2025 - 2,507.04 lakhs.
  5. Power and fuel expense: Q3 2025 - 4,833.78 lakhs, 9M 2025 - 14,365.93 lakhs.
  6. Revenue from operations: Q3 2025 - 43,054.49 lakhs, 9M 2025 - 1,29,651.77 lakhs.
  7. Other income: Q3 2025 - 1,317.41 lakhs, 9M 2025 - 3,188.93 lakhs.
  8. Paid-up equity capital: 9,656.19 lakhs as of 31 Dec 2025.
  9. Other equity: 71,618.49 lakhs as of 31 Mar 2025.
  10. Standalone financial results, as no subsidiaries or associates.

Corporate Overview

  1. Assessing financial impact of new Labour Codes (Wages, Industrial Relations, Social Security, OSHWC).
  2. Reliance on state government incentives for expansion projects.
  3. Power Purchase Agreement for 55 MW DC Solar Power Plant.
  4. Manufacturing of Steel products.
  5. Single operating segment: Manufacturing of Steel products.
  6. Expansion cum upgradation project of Steel Melt Shop completed in FY 2019-20.
  7. Investment in 55 MW DC Solar Power Plant.

Risk Factors

  1. New Labour Codes impact employee benefits.
  2. Regulatory changes could affect operations.
  3. Market competition may pressure margins.
  4. Raw material price volatility a concern.

Key Drivers

  1. Government incentives boost other income.
  2. Solar power plant reduces energy costs.
  3. Employee stock options increase capital.
  4. Strong revenue and profit growth.

Auditor’s Report

  1. Limited Review Report, not an audit opinion.
  2. Unmodified review report filed with exchanges.

Board Commentary

  1. Financial impact from new Labour Codes on gratuity and compensated absences.
  2. Implementation of four new Labour Codes by Government of India.
  3. Expansion cum upgradation project of Steel Melt Shop.
  4. Investment in 55 MW DC Solar Power Plant.

Corporate Governance

  1. Audit Committee reviewed unaudited financial results.

Management Discussion & Analysis

Operational Focus Areas

  1. Monitoring finalisation of Central/State Rules for Labour Codes.

Performance Drivers

  1. Government incentives for industrial development and business.
  2. Strategic investment in solar power for energy needs.

Risk Control Measures

  1. Company assessing and disclosing incremental impact of Labour Codes.
  2. Will provide accounting effect based on final rules.

Critical Risks

  1. Uncertainty regarding financial impact of new Labour Codes.