Swan Energy Ltd Q2 FY26: LNG, Defence & Drama – From Old Mills to New Thrills

1. At a Glance

What do you call a company that started with spinning cotton and now spins capital like a Bollywood producer? Swan Energy Limited. The 116-year-old veteran, once known for polyester and patience, now deals in LNG terminals, defence shipyards, and debt reduction like it’s doing cardio for fun. With amarket cap of ₹14,405 croreand acurrent price of ₹460, Swan has become the corporate version of a mid-life crisis—buying defence companies and flirting with petrochemicals in UAE.

But jokes aside,Q2 FY26was spicy. Quarterlysales stood at ₹1,138 crore, up10.3% YoY, but the company managed to swing aPAT of -₹5.87 crore, a heroic 107% fall from last year’s ₹67 crore profit. TheOperating Profit Marginfell to0.44%, proving that growth can be overrated when your expenses run faster than your revenue. ROE stands at-4.47%, and ROCE is an equally uninspired-1.44%, making you wonder if Swan’s real business is making Excel sheets look sad.

Still, the story’s not over—after paying down over ₹2,400 crore in debt and acquiringReliance Naval & Engineering Ltd (RNEL), Swan is slowly turning from a textile uncle into an energy-and-defence chad.

2. Introduction

Once upon a time in 1909, when oil was something you applied to your hair and not your portfolio,Swan Mills Ltdspun cotton for a nation that hadn’t even invented GST. Fast forward a century, and the company—nowSwan Energy Limited (SEL)—decided that the only spinning worth doing was spinning up new subsidiaries.

From weaving fabric to weaving financial statements, Swan has reinvented itself multiple times: first textiles, then real estate, and now, the high-stakes world ofLNG terminals and shipbuilding. Somewhere between polyester shirts and floating gas terminals, Swan found its mojo again—or maybe just a new loan.

The company’s biggest project, theJafrabad LNG terminal in Gujarat, promises to be India’s firstGreenfield Floating Storage and Regasification Unit (FSRU)terminal. Once operational, it’ll supply clean energy to big names likeONGC, IOCL, BPCL, andGSPCL. Meanwhile, its recent acquisition ofReliance Naval and Engineering(nowSwan Defence) adds a layer of steel to its diversification. From gas to guns—Swan’s diversification looks like a finance student’s nightmare PowerPoint, but hey, it’s working.

While profits dipped this quarter, the group’s expansion, debt trimming, and fundraise of ₹3,319 crore through QIP show that Swan is now gearing up for something much bigger than its humble textile beginnings.

3. Business Model – WTF Do They Even Do?

If you open Swan Energy’s annual report without context, you might think five companies got stuck in a blender. But let’s break it down:

1. Distribution & Development (74% of H1 FY25 revenue):After acquiringVeritas India Ltdfor ₹260 crore in 2023, Swan became a distributor of chemicals and petrochemicals across India and the UAE. Veritas runs a1,70,000 MT terminal at Hamriyah, which sounds fancy until you realise it’s essentially a massive warehouse of flammable liquids—basically Tinder for molecules.

2. Energy (18% of H1 FY25):This is the crown jewel. TheJafrabad LNG Terminal, under subsidiariesSwan LNG and Triumph Offshore, is a10 MMTPAproject where Phase 1 (5 MMTPA) is almost ready. With long-term offtake agreements from state giants like IOCL and ONGC, it’s a “tolling” business model—Swan won’t sell gas; it’ll charge rent for letting others use the pipe. Think of it as India’s Airbnb for natural gas.

3. Construction (3%):Their real estate arm has developed26.16 lakh sq ftacross metros and leased properties toHarmanandGoogle Connected Services, earning ₹31 crore annually. Basically, they’re the landlords of tech bros now.

4. Warehousing (3%):Operates 6,00,000 sq ft of storage throughVeritas Logistics. Not exciting, but necessary. Every empire needs basements.

5. Textile (2%):The nostalgia business. An Ahmedabad unit still produces1 lakh metres per day—the corporate version of your dad still keeping his 1990 scooter “for memories.”

6. Defence & Heavy Engineering:After acquiringReliance Naval, Swan now ownsIndia’s largest dry dock—662 meters long. That’s enough to park your entire midcap portfolio and a few egos.

So yes, Swan Energy is technically a diversified conglomerate—but spiritually, it’s a magician. One minute it’s a textile company, next minute it’s fixing Coast Guard ships.

4. Financials Overview