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Informist, Thursday, Jan. 29, 2026

By Ashutosh Pati

MUMBAI – State-owned Steel Authority of India Ltd. is expected to post a double-digit growth in its top line for the December quarter, on the back of a rise in volumes, while its bottom line is expected to rise over threefold on year because of a low base, according to analysts. The steel major's profitability is expected to take a sharp hit due to lower realisations and high coking coal costs.

SAIL is expected to post a standalone net profit of INR 3.4 billion for the December quarter, up around 249% on year but down nearly 56% sequentially, according to the average of estimates from nine brokerages. The highest estimate for the company's net profit is INR 4.5 billion from Motilal Oswal Financial Services Ltd. and the lowest is INR 2.5 billion from YES Securities (India) Ltd.

The steel behemoth is likely to have earned revenues of INR 273.2 billion in the December quarter, according to the average of the estimates. The company's revenue is expected to rise around 12% on year and over 2% sequentially. Estimates for the company's revenue range from INR 279.8 billion from ICICI Securities Ltd. to INR 264.8 billion from Kotak Securities Ltd.

The company's sales volumes are expected rise over 10% on year and around 8% sequentially to 5.3 million tonnes, according to Emkay Global Financial Services Ltd. Brokerage JM Financial expects SAIL's volumes to grow 7% on year, while Prabhudas Lilladher sees volumes rising 18% on year to 5.2 million tonnes, "aided by NMDC trading volumes". SAIL markets some hot-rolled steel products made by NMDC Steel Ltd.

While a rise in volumes is expected to drive SAIL's December quarter performance, the company's profitability is likely to plunge due to higher coking coal costs and lower realisations on steel. Prices of hot rolled coil declined by INR 2,060 per tonne from the trailing quarter, while prices of coking coal rose around 9% in Australia, Elara Securities said. The company's realisations are expected to decline by INR 1,000-INR 2,000 per tonne in the December quarter, according to analysts.

The steel giant's earnings before interest, tax, depreciation, and amortisation for the December quarter are pegged at INR 21.11 billion, down around 12% on year and over 25% sequentially, according to the average of estimates from nine brokerages. However, better operating leverage is expected to cushion the fall in EBITDA, according to ICICI Securities. Estimates for the company's EBITDA range from INR 22.2 billion from Motilal Oswal to INR 19.9 billion from Nuvama Wealth Management Ltd.

"SAIL is positioned for a fall in profitability due to a fall in steel prices and the absence of any notable capacity expansion led volume growth," Systematix Shares and Stocks (India) Ltd. said. Similarly, YES Securities said "... higher coking coal costs and subdued steel pricing during the quarter are likely to weigh on profitability, with EBITDA/t (tonne) expected to decline sequentially despite volume strength."

Emkay sees SAIL's EBITDA per tonne falling by INR 1,000 sequentially to INR 4,130 in the December quarter, while JM Financial expects EBITDA per tonne at INR 3,000.

The company will detail its December quarter earnings Friday. Investors and analysts will track the company's guidance on capacity expansion plans and debt reduction. "SAIL remains largely a price-driven play, given its relatively weak execution track record. An improvement in domestic steel prices remains the key trigger for the stock, and the implementation of safeguard measures provides much-needed relief," Prabhudas Lilladher said.

Thursday, shares of SAIL closed at INR 157.18 on the National Stock Exchange, up 0.9%. Shares of the company have risen by over 14% since reporting its September quarter earnings.

Of the nine brokerage reports on the company available with Informist, three have a 'buy' or equivalent recommendation on the stock, three have a 'hold' or equivalent recommendation, and three have a ‘sell' or equivalent recommendation.

The company had reported a net profit of INR 4.3 billion in the September quarter on revenues of INR 267.0 billion. 

The following are the Oct-Dec earnings estimates for SAIL from nine brokerages in descending order by estimate of net profit in INR billion:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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