Analyst Concall
SAIL plans INR-150-bln capex in FY27, over INR 200 bln FY28
This story was originally published at 13:29 IST on 16 May 2026
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--SAIL: See FY27 capex at INR 150 bln, FY28 capex over INR 200 bln
--CONTEXT: Comments by SAIL's mgmt in post-earnings analyst concall
--SAIL: See sales volumes rising 10% YoY to 22 mln tonnes FY27
--SAIL: See net sales realisations up QoQ at around INR 4,000/tn in Apr-Jun
--SAIL:Have mitigated Jan-Mar fuel concerns, don't see any issues in Apr-Jun
--SAIL:FY27 capex for debottlenecking activities, IISCO steel plant expansion
--SAIL: IISCO plant expansion in advance stages, ground work to start
--SAIL: Target crude steel production of 22.5 mln tn in FY27
--SAIL: Blended net sales realisation for March qtr at INR 52,000 per tonne
--SAIL: Blended net sales realisation for April at INR 57,000 per tonne
--SAIL: Took price hikes of INR 1,500 per tonne for long steel pdts in Mar
--SAIL: Took price hikes of INR 1,400 per tonne for flat steel pdts in Mar
--SAIL: Aim is to have no increase in inventories in June qtr
--SAIL: Aiming to increase capacity at Salem steel plant
By Ashutosh Pati and Astha Oriel
MUMBAI/NEW DELHI – State-owned Steel Authority of India Ltd. is planning capital expenditure of INR 150 billion for 2026-27 (Apr-Mar) and wants to scale this up to more than INR 200 billion in FY28, the company's management told analysts in the post March quarter result conference call Saturday. Its investments for this year will be disbursed between debottlenecking activities and expansion of the IISCO steel plant.
The steel behemoth had planned capital expenditure of INR 100 billion for FY26 but ended up incurring around INR 91 billion, the management said. The company's IISCO steel plant in Burnpur, West Bengal, is at advanced stages of expansion and the groundwork is expected to start soon. SAIL is also expanding its Bokaro and Bhilai steel plants and aims to increase capacity at Salem in Tamil Nadu as well.
The company expects to increase its steel sales volume by 10% on year to 22 million tonnes in FY27, excluding the volumes from NMDC Steel Ltd. and Rashtriya Ispat Nigam Ltd, from 19.9 million tonnes in FY26. Including these, the company's sales volume is expected to increase to 22.5 million tonnes. It is also targeting crude steel production of 22.5 million tonnes this year from around 19 million tonnes, the management said.
SAIL is also prioritising profitability and cost reduction this year. "We'll be focussing more on the operational efficiency as well as on the special steel component, so that we will ramp up our kind of profitability as well. So, this profitability, on an average, over the year, over various quarters in the year, should remain at a higher level," a top official of the company said.
The steelmaker's earnings before interest, tax, depreciation, and amortisation rose to INR 47.62 billion for the March quarter from INR 37.81 billion a year ago. Its operating margin rose to 15.45% from 12.90% in the year-ago period. SAIL's current net debt to equity ratio is 0.37, and it expects this to reduce further this year as "debt levels should not increase," the official said.
The company increased prices of its long steel products by INR 1,500 per tonne and by INR 1,400 per tonne for flat steel products in March. The company has overcome challenges around fuel it faced in the March quarter by using piped natural gas in certain locations and creating liquefied petroleum gas banks in others. It does not see "fuel concerns" as a major challenge for the June quarter. The prices of imported coal have risen by around INR 2,000 sequentially in the June quarter, which is expected to impact SAIL's cost of production by around INR 1,400-INR 1,500 per tonne, the management said.
It expects net sales realisations to rise around INR 4,000 per tonne sequentially in the June quarter. The company's blended net realisations for the March quarter were at INR 52,000 per tonne and at INR 57,000 per tonne in April. SAIL hopes not to increase inventory levels in the June quarter, but "that is a wish list" as it mainly depends on market conditions.
"...quarter three and quarter four will have good amount of inventory reduction. So quarter two will be quite challenging as compared to quarter one. We are making our strategies towards that to see how less increase of inventory can take place during quarter one and mostly in quarter two," the official said.
The steelmaker reported a net profit of INR 16.80 billion for the March quarter, up around 43% on year, including a one-time cost of INR 3.30 billion. Analysts had expected it to post a net profit of INR 16.23 billion. SAIL's bottom line without the one-time cost would have been INR 20.09 billion, much higher than expectations. The company's revenue from operations rose just over 5% on year to INR 308.13 billion for the quarter, lower than the expectation of INR 310.39 billion.
SAIL declared its March quarter results after market hours Friday. Its shares closed at INR 192.40 on the National Stock Exchange, down 3.4% from Thursday. End
Edited by Akul Nishant Akhoury
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