H1 FY24: Resilient results in a tough first half by Sarthak Metals

Sarthak Metals has battled volatile input prices driven by weak global economy in the last 2-3 quarters and yet has delivered a resilient performance in the first half of FY23-24.

Despite a 33% drop in revenue in H1 FY24 over H1 FY23, the EBITDA margin has stayed in its preferred range of 8-10%. This shows the management’s focus on profitability. The company remains net cash positive, with high ROCE. The management believes the price scenario is bottoming out.

The new product – flux cored wires – is now ready to go to market. The next two quarters could see results of market acceptance of the initial pilot production.

The stock has underperformed in the last three months in reaction to drop in earnings, however, this is a high-quality company that should remain on the radar of long-term investors.

Here are some condensed result highlights:


  • Revenue was down 24% in Q2 FY24 on a yoy basis and overall 32% for the first half as a whole. However, EBTIDA margin was nearly intact at 9.3% for H1 FY24, in line with H1 FY23.
  • While in absolute terms EBIDTA and net profit was down by about 33-35% in H1 FY24 on a yoy basis, ability to maintain margins shows the strength of the business. ROCE remains in high double digits.


  • The company remains net cash positive, the amount of net cash were up to Rs 21.3 cr as of Sep ’23 as compared to Rs 5.3 cr in Jun ’23, when it resorted to planned inventory building in anticipation of demand


  • The first line for Flux Cored Wires went operational in Q2. Post trial production, the company has now started selling in Bhilai, and will also seed the Nagpur market. Based on the results in the next two quarters, Sarthak could look at scaling up this business

The detailed Q2 and H1 FY24 report is posted here.

PS: Wisdom-IR is investor relations advisor to Sarthak Metals. In case you have any queries for the management, you can address them to us.

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