Steel Stock to Watch After Its PAT Jumps 239% YoY; Announces 200% Capacity Growth Plans

Synopsis: Sambhv Steel Tubes Limited posted its highest-ever annual revenue of Rs. 2,413 crore in FY26, with PAT more than doubling 147% YoY to Rs. 143 crore, even as the Chhattisgarh-based integrated steel pipes manufacturer accelerates a sweeping capacity expansion from 0.62 MMTPA today to 2.03 MMTPA by 2030.

The steel pipes segment rarely generates excitement. But when a backward-integrated Chhattisgarh manufacturer posts a clean sweep across revenue, margins, and profit and pairs it with one of the most aggressive capacity expansion roadmaps in the sector, it earns a closer look. This isn’t a company riding a commodity cycle. It is one methodically building the integration depth and product breadth to compete at a different scale entirely. 

With a market capitalization of Rs.3,789 crore, the shares of Sambhv Steel Tubes Limited were trading at Rs. 129 per share on May 11, 2026, with a 52-week range of Rs. 149.40 to Rs. 81.42. The stock is trading at a P/E of approximately 26x.

FY26 & Q4 FY26: Financial Performance

Sambhv Steel Tubes closed FY26 with revenue from operations at Rs. 2,413 crore, up 60% YoY from Rs. 1,511 crore in FY25. Operating EBITDA surged 79% to Rs. 276 crore, with margins expanding 122 bps to 11.45% from 10.23% a year ago. Net profit came in at Rs. 143 crore, up 147% from Rs. 58 crore in FY25, with PAT margins improving to 5.94% from 3.84%. 

Cash flow from operations more than doubled to Rs. 216 crore, and the company’s working capital cycle stayed lean at just 17 days. ROCE stood at 15.97%, and net debt-to-operating EBITDA improved sharply to 0.78x. Total sales volume for the year was 396,731 MT, led by structural pipes and tubes at 224,099 MT, followed by pre-galvanized coils and pipes at 83,027 MT and stainless steel CR coils at 48,562 MT.

The March quarter cemented the momentum. Q4 FY26 revenue rose 38% YoY to Rs. 685 crore, with operating EBITDA nearly doubling to Rs. 92 crore, a margin of 13.46%, the highest in recent memory. PAT jumped 239% YoY to Rs. 56 crore, with margins expanding to 8.14%. The quarter also recorded the company’s highest-ever quarterly sales volume of 107,785 MT and the highest-ever EBITDA per tonne at Rs. 9,512 (excluding sponge iron). Cash flow from operations in Q4 alone stood at Rs. 155 crore.

Capacity Expansion: The FY30 Blueprint

The numbers are the headline, but the expansion pipeline is the story. Management has set an explicit goal of scaling finished product capacity from 0.62 MMTPA today to 2.03 MMTPA by FY30, a more than threefold increase. The greenfield expansion at Kesda and Kuthrel Unit II will add 1.2 MMTPA in phases, with Phase I focused on 0.36 MMTPA of stainless steel coil capacity at a capex of Rs. 810 crore, targeted for commissioning by Q4FY27.

On the brownfield side, stainless steel CR coil capacity is being doubled from 58,000 MTPA to 116,000 MTPA through debottlenecking, while ERW pipes and tubes capacity will grow by 150,000 MTPA via the DFT route at a capex of Rs. 50 crore. Two captive power plants, a 25 MW facility at Kesda and a 30 MW plant at Sarora, are being added to drive cost efficiency and reduce external power dependence. Key machinery ordering is complete, and civil work is underway across divisions. 

On the strategic front, the company signed an MoU with the Ministry of Steel under PLI Scheme 1.2 for stainless steel CR coil manufacturing, executed six new co-branding MoUs with stainless steel pipe partners, and received product approvals from Powergrid Corporation, Hindustan Shipyard, and NPCC.

Investor Overview

Sambhv Steel Tubes is no longer a sub-scale ERW pipe maker; it is midway through a multi-year integration journey that is compressing working capital, expanding margins, and building capacity across stainless steel and galvanized products. FY26 was its strongest year on record. The question for investors is whether the greenfield at Kesda and the PLI tailwind can sustain that trajectory through FY27 and beyond.

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