Indian Metals & Ferro Alloys (IMFA) reported robust financial numbers for Q3 FY’26, with EBITDA and PAT improving due to better ferrochrome pricing realizations. Management confirmed the strategic acquisition of the Tata Steel ferrochrome plant is expected to close in February 2026. Key focus remains on commissioning the Kalinganagar greenfield project by June 2026 and the ethanol project by March 2026, setting the stage for volume growth in FY’27.
Q3 FY’26 Performance Overview
IMFA announced robust results for the third quarter of FY ’26. Managing Director Mr. Subhrakant Panda noted that EBITDA and PAT numbers increased significantly, primarily driven by improved realizations in ferrochrome pricing. Overall costing remained stable, with only a slight increase in power generation costs due to coal prices.
Production and Sales Highlights (Q3 FY’26)
Key operational figures for the quarter ended December 31, 2025, were:
- Ferrochrome Production: 67,196 tonnes.
- Power Generation: 256.17 million units.
- Chrome Ore Raising: 265,468 tonnes.
- Ferrochrome Sales: 64,802 tonnes.
EBITDA margins saw a substantial jump, exceeding the 23% mark in Q3, up from the 18% to 19% range seen in Q2 FY’26. Management expects similar margins in Q4, provided prices hold.
Strategic Expansion and Acquisition Update
Management provided updates on three major strategic initiatives:
Kalinganagar Greenfield Project (KNR 1)
The project is on track, with the first furnace expected to commission in June 2026, and the second shortly thereafter. The weighted average EBITDA cost for the expanded output is expected to reduce by INR1,500 to INR2,000 a tonne due to logistical advantages near captive mines and consumers.
Tata Steel Acquisition (KNR 2)
The company is in the final stages of obtaining statutory approvals for the acquisition of the Tata Steel ferrochrome plant at Kalinganagar for a base consideration of INR610 crores plus GST. The deal is expected to close out in the ongoing fourth quarter, specifically within February 2026. Volume benefits from this acquisition are expected to materialize in Q1 FY’27.
Ethanol Project
The 120 KLD ethanol project (Capex of INR150 crores) is at an advanced stage and is expected to commission in March 2026, with contributions to the top line starting in April (FY’27).
Future Guidance and Outlook
Management expects production volume in FY ’27 to reach approximately 400,000 tonnes, increasing to between 475,000 to 500,000 tonnes in FY ’28, catering entirely to capacity from captive mines.
Regarding the market outlook, management noted that while domestic realizations are currently higher than global prices, the overall marketing strategy remains long-term oriented. The current export-to-domestic ratio of 90:10 is conceptually targeted to shift towards 60:40 over the next two years as enhanced capacity comes online.
Capital Expenditure and Balance Sheet
Capex plans are significant:
- Total planned capex for the next two years is approximately INR1,000 crores.
- For FY’27, the company is targeting 1 million tonnes (10 lakh tonnes) of ore raising, ensuring no external ore purchases are needed.
- The current cash and investments position stands at close to INR1,100 crores.
- The maximum expected debt drawdown against the INR470 crore sanctioned limit is capped around INR450 crores to INR470 crores, with management aiming for a conservative debt-to-equity ratio not exceeding 0.3.
Industry Dynamics Discussion
In response to questions on global supply, Mr. Panda stated that while South Africa’s subsidized tariffs create complexity, IMFA’s fully integrated model provides inherent resilience. The structural cost curve for non-integrated producers globally is moving upwards (e.g., UG2 chrome ore prices around USD300 a tonne), which supports IMFA’s competitiveness.
Regarding input costs, metallurgical coke consumption is roughly 0.65 tonnes per tonne of ferrochrome, currently priced around USD250 per tonne.
Source: BSE
