Bihar Sponge Iron Ltd (500058)
Latest quarterly results (Q4 FY26)
In its latest reported quarter, Q4 FY26, Bihar Sponge's revenue was ₹16.9 Cr (-82.8% year on year, -80.6% on the previous quarter), and net profit ₹1.2 Cr (-62.8% year on year); the operating margin was -20.8%.
| Q4 FY26 (₹ Cr) | Value | YoY vs Q4 FY25 | QoQ |
|---|---|---|---|
| Revenue | ₹16.9 | -82.8% | -80.6% |
| Operating profit | ₹-3.5 | loss narrowed | loss widened |
| Net profit | ₹1.2 | -62.8% | -79.9% |
| EPS (₹) | 0.14 | -62.2% | -79.7% |
| Operating margin | -20.8% | — | — |
📢 Recent Corporate Announcements
Bihar Sponge Iron Limited has filed a criminal complaint under Section 138 of the Negotiable Instruments Act against M/s Vanraj Steels Private Limited & Others. The complaint follows the dishonour of cheques totaling ₹38,00,000/- (₹38 crore) issued to clear outstanding liabilities. This ₹38 crore dispute is substantial for the company, representing ~15.5% of its TTM revenue (₹245 crore) and ~34% of its market capitalization (₹112 crore). Vanraj Steels was key to the company's operating strategy via a Facility User Agreement, indicating potential operational disruption and bad debt risk.
- Criminal complaint filed under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881
- Cheques dishonoured total an aggregate amount of ₹38,00,000/- (₹38 crore)
- Complaint Case No. 614 of 2026 registered before Sub-Divisional Judicial Magistrate at Chandil
- Dishonoured amount equals ~34% of the company's total market capitalization of ₹112 crore
Bihar Sponge Iron reported zero revenue from operations for the quarter ended June 30, 2026, as its sponge iron plant underwent revamping and major maintenance following the transition to a new operator. The company terminated its Facility User Agreement with VSPL Group on March 19, 2026, entering a new agreement with Amalgam Steel & Power on March 23, 2026, with ongoing dispute claims currently under legal proceedings. Statutory auditors issued qualified conclusions regarding unprovided soft loan interest of ~₹93.72 cr (out of ₹121.18 cr total interest claimed) and an unprovided ₹2.15 cr penalty by SECL. Other income of ₹6.11 cr was recorded primarily from net liability and asset write-backs.
- Generated ₹0 in operating revenue for Q1 ended June 30, 2026, down sharply from ₹77.5 cr in Q1 FY26 due to plant revamping.
- Terminated previous operator agreement with VSPL Group on March 19, 2026, initiating legal recourse for claims and counter-claims.
- Entered a new Facility User Agreement with Amalgam Steel & Power Limited dated March 23, 2026.
- Auditor qualified unprovided interest on Jharkhand Govt soft loan (only ₹27.46 cr provided against ₹121.18 cr total interest).
- Recorded ₹6.11 cr (₹611.09 lakhs) in other income from net write-backs of liabilities and assets.
Bihar Sponge Iron Ltd reported zero operational revenue for the quarter ended June 30, 2026, as the plant remained shut for revamping and maintenance. This follows the termination of its Facility User Agreement with Vanraj Steels in March 2026 and the signing of a new agreement with Amalgam Steel & Power Limited. The company's bottom line was supported by 'Other Income' of ₹6.11 crore from liability write-backs. However, auditors have issued a qualified opinion highlighting significant unprovided interest liabilities of approximately ₹93.72 crore related to government soft loans.
- Zero revenue from operations in Q1 FY27 compared to ₹77.5 crore in the same quarter previous year.
- ₹6.11 crore recognized as Other Income due to liabilities and assets written back/off.
- ₹121.18 crore total interest liability on Jharkhand Government soft loans, with only ₹27.46 crore provided in books.
- Termination of the Facility User Agreement with Vanraj Steels Group effective March 19, 2026, leading to ongoing legal disputes.
- New Facility User Agreement signed with Amalgam Steel & Power Limited on March 23, 2026, with operations yet to restart.
Bihar Sponge Iron Ltd reported zero operational revenue for the quarter ended June 30, 2026, as its plant underwent major maintenance and revamping. This follows the termination of its agreement with Vanraj Steels and the signing of a new Facility User Agreement with Amalgam Steel & Power Limited. Despite zero sales, the company recorded a profit driven by 'Other Income' of ₹6.11 crore from writing back liabilities. Significant financial risks persist, including a ₹121.18 crore interest liability to the Jharkhand government, of which ₹93.72 crore remains unprovided in the books.
- Operational revenue dropped to ₹0 in Q1 FY27 from ₹77.5 crore in the same quarter previous year.
- Recognized ₹6.11 crore as other income from liabilities and assets written back/off.
- Total interest liability on Government of Jharkhand soft loan stands at ₹121.18 crore, with only ₹27.46 crore provided for.
- New Facility User Agreement signed with Amalgam Steel & Power Limited on March 23, 2026, following termination of the previous operator.
- Auditors issued a qualified opinion citing unprovided SECL penalties of ₹2.15 crore and unquantified promoter loan settlements.
Bihar Sponge Iron Ltd has scheduled a board meeting for August 14, 2026, to approve the unaudited financial results for the quarter ended June 30, 2026. The company is coming off a fiscal year (FY26) where it generated Rs 245 crore in revenue and Rs 11 crore in net profit. Despite recent profitability, the company maintains a negative net worth of Rs -34 crore and operates with negative operating margins (-5.0%). The trading window for insiders is currently closed and will reopen 48 hours after the results are published.
- Board meeting scheduled for August 14, 2026, to approve Q1 results.
- Financials cover the three-month period ending June 30, 2026.
- Trading window for insiders closed as per SEBI Prohibition of Insider Trading Regulations.
- Company reported a TTM revenue of Rs 245 crore and PAT of Rs 11 crore as of March 2026.
- Current market capitalization stands at Rs 111 crore with a P/E of 9.8.
Bihar Sponge Iron Ltd has initiated legal proceedings under Section 138 of the Negotiable Instruments Act against Mr. Manoj Kumar Agarwal & Ors. The complaint (Case No. 461 of 2026) pertains to the dishonor of cheques issued to discharge liabilities towards the company. While the specific amount involved is not disclosed, the company's negative net worth of Rs -34 Cr makes the recovery of any outstanding dues significant for its financial health. The case is filed before the Sub-Divisional Judicial Magistrate at Chandil, Jharkhand.
- Complaint Case No. 461 of 2026 filed on July 21, 2026, for cheque dishonor.
- Action taken under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881.
- Legal proceedings initiated against Mr. Manoj Kumar Agarwal & Ors. at the Chandil court.
- Company currently operates with a negative net worth of Rs -34 Cr as per latest financial context.
Bihar Sponge Iron Ltd (BSIL) has received an email notification regarding an insolvency petition filed against it by M/s. Agarwal Coal Corporation Private Limited. The case, numbered KB C.P. (IB) 146 2026, was listed before the NCLT Kolkata Bench on July 16, 2026. As of July 17, 2026, the company reports that it has not yet received a formal notice from the Hon'ble NCLT. This filing indicates a potential legal dispute over unpaid dues to a coal supplier, which could lead to insolvency proceedings if admitted.
- Insolvency petition filed under Case Number KB C.P. (IB) 146 2026 at NCLT Kolkata
- Matter was listed for hearing on July 16, 2026, before Court No. 2
- Petitioner identified as M/s. Agarwal Coal Corporation Private Limited
- Company confirms no formal notice has been issued by the NCLT as of July 17, 2026
Financial Performance
Revenue Growth by Segment
Total revenue grew by 19.56% YoY to INR 349.32 Cr. The Sponge Iron segment revenue increased by 28.63% from INR 271.58 Cr to INR 349.32 Cr, while the Trading segment (plastic packaging) was discontinued, contributing 0% compared to INR 20.59 Cr in the previous year.
Geographic Revenue Split
Not disclosed in available documents; however, the plant is located in Jharkhand, targeting the domestic secondary steel sector.
Profitability Margins
Net Profit Margin improved from 2.55% to 2.98% due to operational revival. However, Operating Profit Margin declined from 4.00% to 2.57%, reflecting increased pressure from raw material costs and operational overheads.
EBITDA Margin
Operating Profit Margin stands at 2.57%, a decline of 143 basis points YoY. Core profitability is driven by the Facility User Agreement which ensures steady operating income despite volatile market conditions.
Capital Expenditure
The company completed significant overhauling and renovation of the plant and railway siding prior to January 2022; specific INR values for FY25 planned CAPEX are not disclosed.
Credit Rating & Borrowing
The company has a negative Debt-Equity ratio of -2.42. It recently completed the repayment of a INR 32.50 Cr rehabilitation loan principal to AIADA in monthly installments of INR 1.25 Cr as of August 2024.
Operational Drivers
Raw Materials
Coal and Iron Ore are the primary raw materials, representing the majority of the cost of production. Capital service charges also constitute a significant cost component.
Import Sources
Sourced domestically; historically dependent on Central Coalfields Limited for coal supply.
Key Suppliers
Central Coalfields Limited is identified as a primary historical supplier whose non-supply previously caused a plant shutdown.
Capacity Expansion
Current installed capacity is 2,10,000 MT per annum across three kilns. No specific expansion timeline is provided, as the focus is on sustaining current third-party operations.
Raw Material Costs
Raw material costs are highly volatile and market-driven. The company employs a strategy of exploring various avenues for procuring high-quality iron ore and coal to protect margins.
Manufacturing Efficiency
Inventory turnover improved from 2.99 times to 4.54 times, indicating better movement of stock and improved working capital efficiency.
Logistics & Distribution
The company utilizes its own renovated railway siding for the transport of raw materials and finished sponge iron, reducing reliance on road logistics.
Strategic Growth
Growth Strategy
Growth is targeted through the continued operation of the plant via the Facility User Agreement with Vanraj Steels Private Limited. The strategy focuses on wiping out past losses through consistent operating income and leveraging the demand for mild steel in the rural housing sector.
Products & Services
Sponge Iron (high-quality pre-reduced ferrous material) used by induction and electric arc furnaces.
Brand Portfolio
Bihar Sponge Iron Limited (BSIL).
New Products/Services
The company recently discontinued its plastic packaging trading business to focus exclusively on its core sponge iron manufacturing assets.
Market Expansion
Focusing on the rural economy and housing construction sectors, which are the largest users of mild steel produced from sponge iron.
Strategic Alliances
Facility User Agreement dated 30.12.2020 with Vanraj Steels Private Limited, Mr. Manoj Kumar Agarwal, and Parasnath Advisory Private Limited for plant operation.
External Factors
Industry Trends
The industry is seeing a shift toward increased demand from the construction and infrastructure sectors. The company is positioning itself to benefit from the government's thrust on the rural economy.
Competitive Landscape
Competes with other sponge iron manufacturers and suppliers of steel scrap, which is a direct substitute for sponge iron in induction furnaces.
Competitive Moat
The company's moat is its 2,10,000 MTPA installed capacity and its own railway siding, which provides a logistical cost advantage. However, this is offset by the lack of captive raw material sources.
Macro Economic Sensitivity
Highly sensitive to rural income levels and government infrastructure spending, as these drive the demand for housing and mild steel.
Consumer Behavior
Increased disposable income in rural areas is shifting demand toward permanent housing (pucca houses), increasing mild steel consumption.
Geopolitical Risks
Indirect impact through global commodity price volatility affecting iron ore and coal prices.
Regulatory & Governance
Industry Regulations
Operations are governed by the Companies Act 2013 and SEBI (LODR) Regulations. The company previously operated under a BIFR rehabilitation scheme until the abatement of SICA in 2016.
Environmental Compliance
The company maintains a CSR obligation of INR 18.56 Lacs, which was fully spent in FY 2024-25.
Taxation Policy Impact
Subject to standard Indian corporate tax laws; the company is currently utilizing past losses to offset tax liabilities.
Legal Contingencies
Pending LPA in the High Court of Jharkhand regarding exchange fluctuation on foreign currency loans. Settlement of interest on the INR 32.50 Cr AIADA loan is pending mutual agreement with the Government of Jharkhand.
Risk Analysis
Key Uncertainties
The primary uncertainty is the settlement of interest on restructured loans and the outcome of the pending LPA in the High Court, which could impact the timeline for the net worth turning positive.
Geographic Concentration Risk
100% of manufacturing operations are concentrated at the Umesh Nagar plant in Jharkhand.
Third Party Dependencies
High dependency on Vanraj Steels Private Limited for plant operation and revenue generation under the Facility User Agreement.
Technology Obsolescence Risk
The plant uses coal-based kiln technology; while standard for the industry, it is subject to evolving environmental norms.
Credit & Counterparty Risk
Debtors turnover ratio changed significantly from 1,57,186 times to 53 times, indicating a shift in the credit profile of the counterparty under the new operating agreement.
