• Consolidated revenue grew 30% YoY to Rs. 1,018 crores for 9M FY26 vs Rs. 783 crores in 9M FY25
• EBITDA increased 55% to Rs. 56 crores, with margins expanding to 5.61% from 4.72% YoY
• Volume growth of 12% with 20,401 metric tons sold in 9M FY26 vs 17,708 metric tons in 9M FY25
• Capacity utilization improved to 79.58% for 9M FY26 from 73.65% in FY25
• Zambia copper cathode facility completed trial production of 8.6 metric tons in January 2025, targeting commercial production in March 2025 with Phase 1 capacity of 1,200 metric tons annually
• Forward integration projects underway: machines for CTC (Continuously Transposed Conductor) for 765kV transformers arrived from China, expected commercial production in Q2 FY27
• Planned CapEx of Rs. 300-500 crores for Zambia expansion to scale from 100 to 5,000 metric tons annually over next few years
• Q3 FY26 EBITDA margin reached 6.24% vs 5.49% in Q2 and 4.51% in Q3 FY25, showing consistent improvement

Shera Energy delivered strong Q3 and 9M FY26 results with 30% revenue growth and 57% profit growth, driven by volume expansion (12% YoY) and improved margins (EBITDA up to 5.61% from 4.72%). Management is highly confident about the company's backward integration into copper cathode production in Zambia (starting commercial production in Q1 FY27) and forward integration into high-value products like EHV conductors and solar cables, projecting 40-60% revenue growth with margin improvements of 15-20% from Zambia operations alone.

Shera Energy reported robust financial performance for 9M FY26. On a consolidated basis, total income increased 30% to Rs. 1,018 crores from Rs. 783 crores YoY. EBITDA jumped 55% to Rs. 56 crores with margins expanding to 5.61% from 4.72%. Profit before tax grew 57% to Rs. 34 crores, while net profit rose 57% to Rs. 25 crores. EPS improved 49% to Rs. 8.01 from Rs. 5.26. On a standalone basis, total income was Rs. 759 crores (up 21%), EBITDA Rs. 30 crores (up 44%), PBT Rs. 12 crores (up 38%), and net profit Rs. 9 crores (up 32%). Q3 FY26 showed strong sequential improvement with EBITDA margins at 6.24% vs 5.49% in Q2, driven by better product mix and operational efficiency. Volume growth was 12% YoY (20,401 MT vs 17,708 MT) despite a slight Q3 volume decline of 240 tons QoQ (6,618 MT vs 6,862 MT) due to abnormal copper price increases. Raw material consumption as percentage of sales improved to 88.94% in Q3 from 89.91% in Q2. Working capital management maintained at approximately 60 days inventory. Finance costs increased from Rs. 9 crores to Rs. 11.77 crores for 9M, reflecting investments in Zambia operations and working capital for 30% topline growth. The company maintains market capitalization of approximately Rs. 300 crores.

Management, led by Chairman and MD Nasim Shaikh, demonstrated high confidence and strategic clarity throughout the call. The leadership emphasized Shera's unique positioning as one of the few Indian companies operating across all three base metals (copper, aluminum, brass) with full vertical integration from recycling to finished products. Management highlighted their flexible manufacturing capability to switch between metals based on market dynamics, positioning this as a competitive advantage over single-metal peers. The Chairman was particularly bullish on the Zambia backward integration project, stating expectations of 15-20% margin improvement and commercial production starting in Q1 FY27. He emphasized a methodical approach to the Zambia operations, prioritizing recovery optimization over rushing to production. On forward integration, management confirmed machines for EHV-grade CTC conductors have arrived and commissioning is underway. The tone was confident regarding growth prospects, with management projecting 40-60% revenue growth for FY27 and stating the company will 'multiply by 5-10x' capacity in Zambia over the next year. Management emphasized they are 'least interested in what peer industries are doing' and focus on customer needs and operational flexibility. They expressed strong confidence in securing funding for Rs. 300-500 crore expansion, citing good banking relationships and 30-year operational track record. The Chairman was technically detailed and transparent about challenges, including temporary production halts in Zambia for process optimization, indicating credible and realistic management.

Several operational and market risks emerged from the discussion. The Zambia copper cathode project faces execution challenges, with management halting trial production after 8.6 tons to optimize recovery rates, indicating the hydrometallurgy technology is new to the company and requires a learning curve. Management expects multiple process modifications across 17-18 production stages before achieving stable commercial operations. Power supply reliability in Zambia remains a concern, though currently adequate during rainy season; the company is pursuing a solar JV with a Canadian firm to ensure 24x7 power. Q3 volumes declined 3.5% QoQ (240 tons) due to abnormal LME copper price increases from $10,000 to $14,000, demonstrating sensitivity to commodity price volatility. The company faces working capital intensity with 60-day inventory requirements due to multi-metal operations and recycling business, higher than single-product peers. Finance costs increased significantly (Rs. 11.77 crores vs Rs. 9 crores for 9M), reflecting leverage for expansion. Management indicated plans for equity dilution post-Q1 FY27 once Zambia operations stabilize, which could dilute existing shareholders. The business operates in a competitive market with established players like Precision, KEI, Hindalco, though management claims differentiation through multi-metal capability. Raw material price volatility across three metals creates margin pressure, though management demonstrated flexibility by shifting production mix (copper down 400 tons QoQ, aluminum up significantly in Q3). The company is still in SME exchange and awaiting migration to main board, limiting institutional participation currently.

Revenue Outlook: Management expects 40-60% revenue growth for FY27, projecting revenues to double within 2-3 years from current levels

Margin Outlook: Zambia backward integration expected to improve margins by 15-20%; forward integration (conductors, solar cables) to add another 7-10% margin improvement; EBITDA from Zambia operations targeted above 15%

Key Targets:

• Zambia commercial production start: March 2025 (second trial run), stable operations by Q1 FY27
• Zambia Phase 1 capacity: 1,200 metric tons annually with ~$12 million revenue potential
• Zambia capacity expansion: 100 MT to 5,000 MT annually (5-10x growth) within next year
• CapEx planned: Rs. 300-500 crores for Zambia expansion over coming years
• CTC conductor for 765kV transformers: Commercial production starting Q2 FY27
• Forward integration machines: Rs. 60-70 crores invested, commissioning underway
• Natural standalone growth: 5-7% annually in volume terms
• Migration to main board from SME: Process underway (eligible as of February 17, 2026)
• Equity raise: Planned post-Q1 FY27 once Zambia operations stabilize

The Q&A session revealed strong analyst interest in three main areas: (1) Zambia project execution and timeline, (2) funding plans for major expansion, and (3) competitive positioning versus peers. Analysts pressed on why revenue was flat Q3 vs Q2 despite price increases, which management addressed by explaining the volume-price tradeoff and production flexibility between metals. Multiple questions focused on working capital and inventory management, with management defending their 60-day inventory as necessary given multi-metal, vertically-integrated operations including recycling. Several analysts sought clarity on the Zambia timeline, with management being transparent about pausing production for optimization rather than rushing commercial operations. Concerns about equity dilution emerged regarding the Rs. 300-500 crore expansion plans. Analysts also questioned valuation and growth trajectory compared to peers, with management confidently stating they focus on customer needs rather than competitor actions. The tone from analysts was generally positive but probing, seeking to understand execution risks. Management responded with high confidence and technical detail, though deflected some specific forward-looking questions (like exact CapEx timeline) to future calls. Overall, analysts appear cautiously optimistic about the growth story but seeking more proof points on Zambia operations and concerned about dilution. Management's willingness to discuss challenges (like halting Zambia production for improvements) was viewed as credible, while their ambitious 40-60% growth guidance and margin improvement targets drew both interest and scrutiny.