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Informist, Tuesday, Jul. 28, 2026

 

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--SAIL: Output hit by capital works in some plants in Q1 
--SAIL: Focused on reducing inventory gradually till Q4 
--SAIL: Avg net sales realisation was INR 57,000 per tonne in Q1 
--SAIL: Long pdts prices may go up INR 500 to INR 1,000/tn 
--SAIL: Imported coal cost may go down up to INR 2,000 by Aug 
--SAIL: Safeguard duty is giving relief to domestic steel industry 
--SAIL: FY27 capex spending INR 150 bln, not INR 15 bln
--SAIL: Selling iron ore fines from Odisha mines 
--SAIL: FY28 capex seen around INR 200 bln, not INR 20 bln
--SAIL: Capex spending may go up further in coming years 
--SAIL: Expects captive coal output to increase significantly Q4 
--SAIL: Capex spending in Q1 at INR 27.57 bln 
--SAIL: Debt as on date INR 214 bln, focus on cut dn further 
--SAIL: To cut working capital borrowings in coming quarters 
--SAIL: Aim to cut production costs by INR 2,000/tn FY27

 

By Astha Oriel and Narayana Krishna 

 

NEW DELHI/HYDERABAD – Steel Authority of India Ltd. expects to increase the capital expenditure over the next few years, a senior company official told analysts in a post-earnings conference call Tuesday. The company is targeting INR 150 billion in capital expenditure for 2026-27 (Apr-Mar) and INR 200 billion for FY28. 

 

"So far, as capex is concerned, this year we are planning a target of Rs 15,000 crores (INR 150 billion). And this is going to increase in the next two-three years... That means next year, it could be in excess of Rs 20,000 crores (INR 200 billion) and after that, maybe Rs 25,000 (INR 250 billion), Rs 26,000 (INR 260 billion), like that. So, it will go on increasing for the next four, five years," Chairman and Managing Director Ashok Kumar Panda said, adding that the company is likely to meet the FY27 target.

 

For the June quarter, the company spent INR 27.57 billion in capital expenditure. The company is also targetting to cut working capital borrowings in the coming quarters. "So, de-leveraging efforts are on, and so far as today's position is concerned, the debt has further come down to a level of Rs 21,400 crores (INR 214 billion). Efforts are on to reduce the working capital borrowings in this particular year by reducing the inventory as well as through other sources for improving the cash flows," Panda said. 

 

The company expects a significant increase in the captive coal output in the March quarter. For its consumption, the company imports 85% of coking coal and use 15% from indigenous mines. "So, out of that 15%, we get somewhere around 5% from our own mines and which is likely to go up from December onwards," the official said.

 

The company is expecting imported coking coal costs to reduce by INR 1,000 to INR 2,000 by August. In the June quarter, the imported coking coal costs were INR 21,300. "We hope that because in the rainy season there are monsoon situation etc., demand may come down and because of that maybe the prices will soften in Q2 (September quarter)," the management said.

 

On a question regarding about sintering or sinter cake fines, or SCF, subgrade mines (iron-ore), Panda said the company sales primarily from the Odisha group of mines from where it has been selling iron ore fines, fresh iron ore fines, and iron ore tailings. Iron ore tailings are fine waste residues generated after iron ore is crushed, ground, and processed to separate valuable iron-bearing minerals from the raw material.

 

 

The company is targetting to cut production costs by INR 2,000 per tonne in FY27 through various efforts, according to Panda. "Efforts are on to reduce the working capital borrowings in this particular year by reducing the inventory as well as through other sources for improving the cash flows," Panda said.

 

The company aims to reduce inventory gradually till the March quarter. "Going forward, while Q2 (Septemeber quarter) has traditionally been a toughest quarter for the steel industry because of the rain, incidents of rain etc. But efforts are being made not to increase the inventory during quarter 2 (September quarter) and after that our efforts will be to reduce inventory in quarter 4 (March quarter) so that on a yearly basis there will be inventory reduction," Panda said. 

 

For the June quarter, the average net sales realisation per tonne was INR 57,100 compared with INR 52,000 in the quarter-ago. "That means an increase of around INR 5,000 per tonne between these two. So, far as Q2 (Jul-Sept) is concerned, as I have already told, because there is monsoon season right now, so traditionally there is always a reduction in the NSR (net sales realisations)," Panda said.

 

The company expects long product prices to rise by INR 500 to INR 1,000 per tonne. Regarding the anti-dumping investigations by the Indian government, the management said that the safeguard duty is giving relief to domestic steel industry. 

 

The company's June quarter net profit rose nearly 139% on year to INR 16.36 billion on revenues of INR 262.46 billion. At 1235 IST, shares of the company traded 2.2% higher at INR 166.20 on the National Stock Exchange.  End

 

Edited by Akul Nishant Akhoury

 

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