Sarda Energy & Minerals Q3 FY25 profits skyrocket 75%—what’s driving the surge?

Sarda Energy & Minerals Limited has posted impressive financial results for the third quarter (Q3) and the first nine months of fiscal year 2025 (FY25), reflecting the company’s strategic resilience amid fluctuating market dynamics. The company’s strong performance was supported by its recent acquisition of SKS Power Generation (Chhattisgarh) Limited, operational efficiencies, and diversified production capabilities. Despite facing weak demand in the steel and ferro alloys segments, Sarda Energy’s robust revenue growth and improved profitability underscore its adaptive business model and forward-looking strategies.

How Did Sarda Energy & Minerals Perform Financially in Q3 FY25?

Sarda Energy & Minerals Limited reported consolidated revenue from operations of ₹1,319 crore for Q3 FY25, marking a 14% increase quarter-on-quarter (QoQ) and an impressive 43% growth year-on-year (YoY). This strong revenue growth highlights the company’s ability to navigate market fluctuations effectively. The surge was driven by enhanced production capacities, particularly in the power segment, and improved realisation rates across its diversified portfolio.

The company’s profit after tax (PAT) for the consolidated business stood at ₹200 crore, reflecting a remarkable 75% YoY growth, though there was a slight 2% decline compared to Q2 FY25, largely due to seasonal variations in its hydro power operations and market pressures in the steel sector. The operating EBITDA reached ₹381 crore, up 15% QoQ and a striking 96% increase YoY, signalling strong operational efficiency and cost management.

On a standalone basis, Sarda Energy delivered even stronger numbers. Revenue from operations surged to ₹1,047 crore, a significant 37% growth QoQ and a 59% increase YoY. Standalone PAT rose sharply to ₹189 crore, up 54% sequentially and 68% YoY, while the operating EBITDA showed an exceptional 57% QoQ and 135% YoY growth, reaching ₹305 crore.

What Role Did the SKS Power Acquisition Play in Sarda Energy’s Growth?

A key driver behind Sarda Energy’s stellar Q3 FY25 performance was the acquisition of SKS Power Generation (Chhattisgarh) Limited. Acquired in August 2024, SKS Power has significantly expanded Sarda’s power generation capabilities, especially in the thermal independent power producer (IPP) segment. This strategic acquisition contributed to a sharp rise in power production, with IPP generation reaching 980 million kWh, a staggering 353% increase compared to Q2 FY25.

While one unit of the IPP underwent a scheduled shutdown for maintenance from September to October 2024, it resumed operations in mid-October, mitigating any long-term impact on production. The integration of SKS Power has strengthened Sarda Energy’s diversified energy portfolio, enhancing revenue streams and providing a stable foundation for future growth.

How Is Sarda Energy Navigating Challenges in Steel Production?

Despite the strong financials, Sarda Energy faced headwinds in its steel and ferro alloys segments due to weak market demand. The company reported a 16% decline in ferro alloys production quarter-on-quarter and a 21% drop YoY. This was partly due to the temporary shutdown of one of its five ferro alloys furnaces in Raipur for modifications, which resumed operations in November 2024. Additionally, maintenance activities at the Vizag captive power plant impacted ferro alloys output.

However, the company’s strategic focus on operational efficiency helped offset some of these challenges. Sponge iron production grew by 7% QoQ and 15% YoY, while wire rod production saw a 7% sequential increase, demonstrating resilience in key product lines. The company’s ability to optimise its production processes and capitalise on demand fluctuations in specific segments played a crucial role in sustaining growth.

What Are the Key Operational Highlights from Q3 FY25?

Operational performance remained strong across Sarda Energy’s diversified portfolio. The company’s coal production rose by 11% YoY to 429,000 metric tonnes in Q3 FY25, supporting its energy-intensive operations. While hydropower generation increased by 25% YoY, seasonal factors led to a 57% decline compared to Q2 FY25, a trend consistent with the cyclical nature of hydroelectric energy production.

Sarda Energy’s integrated business model, which spans steel manufacturing, power generation, and mining, has provided a buffer against market volatility. This diversified approach allows the company to shift focus between segments based on market demand and operational efficiencies, ensuring consistent performance even amid external challenges.

What Is the Outlook for Sarda Energy & Minerals in the Coming Quarters?

Looking ahead, Sarda Energy remains optimistic about its growth trajectory, driven by strategic investments, a robust energy portfolio, and expanding market opportunities. The integration of SKS Power is expected to continue yielding positive results, while the company’s focus on operational efficiency will help mitigate the impact of fluctuating steel demand.

Although the steel and ferro alloys markets may face short-term volatility, Sarda Energy’s diversified operations and strategic acquisitions position it well for sustainable growth. The company’s continued investments in energy infrastructure, coupled with its agile response to market dynamics, are key factors that will drive its long-term success.