Analyst Concall
SAIL outlines INR-75-billion capex plan for FY26
This story was originally published at 14:20 IST on 29 May 2025
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--SAIL: Robust domestic demand, investment driving India steel growth
--CONTEXT: Comments by mgmt of SAIL in post earnings analyst call
--SAIL: Saw record high annual sales volume in FY25
--SAIL: Plan to hike current capacity of 20 mln tn to 35 mln tn by 2030
--SAIL: Plan to incur INR 75 bln capital expenditure in FY26
--SAIL: Planning a 4-million-tonne capacity pellet plant in Goa
By Ashutosh Pati and Anand JC
MUMBAI – State-owned Steel Authority of India Ltd. is planning to invest INR 75 billion in the financial year 2025-26 (Apr-Mar) on capacity expansion amid robust demand in the country for the metal, the company's management said in a post-earnings conference call with analysts and investors.
The steel behemoth is expecting to raise its capacity to 35 million tonnes by 2030 from 20 million tonnes currently. It is also planning to set up a 4-million-tonne pellet plant in Goa. "We started doing the tendering activities in IISCO (Indian Iron and Steel Co.) steel plant, it will follow in other plants as well. And for that, we are lining up our investment and we are going to increase the capex," the company's management said.
Following the capacity expansion, the company is expecting its crude steel production to increase to over 20 million tonnes in FY26 from 19.17 million tonnes produced in FY25. The company said that from the 20 million tonne production target, it will sell more than 19.2-19.3 million tonnes of crude steel in the current financial year. In FY25, the company achieved record high sales volume at 17.89 million tonnes.
In addition, the new capacities will also be more efficient from the employee cost perspective. "...we are planning right now for a brownfield, agricultural greenfield expansion, which are going to come in next three, four, five years. And during that time, the employee costs would have come down significantly through normal separation and a little bit of induction of fresh blood," the company's management said.
SAIL said that employee costs fell in FY25 and it is expecting further reduction of INR 4 billion-INR 5 billion this year. The company reported employee benefits expense of INR 116.58 billion in FY25 from 117.48 billion in the previous year.
The company said its Durgapur, Bhilai, and Rourkela steel plants could add capacity of around 1.0-1.5 million tonnes by 2028 due to the ongoing ground field and deep bottenecking activies. As for the Indian Iron and Steel Co. steel plant, its management added that the entire 7 million tonnes capacity will come by 2029.
Currently, SAIL's debt is around INR 23.8 billion and the company is planning to reduce it further. In FY25, the company reduced its debt by INR 7.5 billion. It said that India's steel industry is experiencing significant growth driven by robust domestic demand and strategic investments. The company reported a net profit of INR 11.78 billion in the quarter ended March, up more than eight times sequentially and over 16% on year on lower coal costs.
At 1410 IST, the shares of SAIL were 0.7% higher at INR 129.81 on the National Stock Exchange. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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