Steel Authority of India Limited (SAIL) reported a strong Q3 FY26 performance. Crude steel production grew by 2%, while saleable steel increased by approximately 4%-5%. Sales volume surged by 16.3%, leading to significant inventory reduction. Revenue increased by 9% to ₹79,997 crores, and PAT rose by 60%. The company reduced its debt by approximately ₹5,000 crores in the nine months and anticipates continued growth in Q4 with stable coal prices.
Financial Performance
SAIL’s crude steel production increased by 2%, reaching 14.35 million tonnes for the nine months. Saleable steel production saw a growth of 4%-5%. The company experienced a substantial 16.3% increase in sales volume during the same period, driven by retail outreach. This surge in sales contributed to significant inventory reduction and decreased borrowings.
Revenue increased by 9%, climbing from ₹73,152 crores to ₹79,997 crores. Profit After Tax (PAT) increased significantly by 60% compared to the previous year, highlighting improved operational efficiency and effective treasury management.
Debt Reduction and Future Outlook
SAIL successfully reduced its debt by approximately ₹5,000 crores over the nine months and a further ₹2,000 crores in January. The company anticipates continued debt reduction in February and March.
Looking ahead to Q4, SAIL expects an uptick in market pricing due to the end of the monsoon and festive seasons. With range-bound coal prices, the company expects margins to remain strong, leading to better sales growth.
Strategic Initiatives and Expansion
SAIL is actively working to enrich its product mix by reducing the production of semis and focusing on finished products. Semis production currently stands at 10%. The company aims to minimize semis production through increased mill production and conversion contracts.
IISCO Steel Plant Expansion
The expansion project at IISCO Steel Plant is progressing with an estimated investment of ₹36,000 crores. Most major packages have already been ordered, and ground activities have commenced. The project is expected to be completed in three years, significantly boosting SAIL’s production volume and profitability.
CAPEX and Production Targets
SAIL has set a CAPEX guidance of ₹15,000 crores for FY26-27, with payments allocated towards the IISCO expansion. The company aims to achieve a hot metal volume of 22.5 million tonnes in FY26-27 and is targeting approximately 21 million tonnes of saleable steel. For FY27-28, SAIL anticipates further growth with a hot metal target of 23 million tonnes and saleable steel at 21.5 million tonnes.
Cost Management and Operational Efficiency
The company is actively pursuing cost optimization measures, including sourcing power from Renewable Energy (RE) sources, resulting in savings on power costs. A new 1-million-ton TMT bar mill is also being started at Durgapur Steel Plant, with ground activity already underway.
Source: BSE
