Steel Authority of India (SAIL) Q2 25/26 earnings summary

Executive summary

• Revenue from operations for H1 FY 2025-26 reached INR 52,625 crore, up from INR 48,672 crore in H1 FY25, driven by a 16.7% increase in sales volume and steady crude steel production at 9.5 million tonnes, with total sales at 9.46 million tonnes.

• Profit after tax for H1 FY 2025-26 stood at INR 1,112 crore, a 32% year-over-year increase, with EPS at 2.69.

• EBITDA for H1 FY 2025-26 was INR 5,754 crore, with an EBITDA margin of 11.01%, and profit before tax at INR 1,443 crore, up 28%.

• The company focused on inventory liquidation, aggressive byproduct and scrap sales, and cost control, supporting improved cash flow and reduced borrowings.

• Net worth increased to INR 55,973 crore as of September 2025.

Financial highlights

• Borrowings reduced by over INR 3,000 crore in H1, with non-index borrowings at INR 26,427 crore as of September 30, 2025.

• Finance cost reduced to INR 1,079 crore in H1 FY'26 from INR 1,449 crore in H1 FY'25.

• Standalone net profit for Q2 FY26 was INR 427 crore, with total income from operations at INR 26,704 crore.

• Value-added products comprised 57% of sales in Q2, up from 55% in Q1, with a target of over 60% in coming quarters.

• EBITDA margin for H1 was 11.01%, expected to improve in Q3 and Q4, potentially reaching 14-15% in Q4.

Outlook and guidance

• Sales and production volumes are expected to grow 5-7% in FY 2026-27 over FY 2025-26, driven by debottlenecking and inventory liquidation.

• CapEx for FY 2025-26 is targeted at over INR 7,500 crore, rising to more than INR 10,000 crore in FY 2026-27, mainly for ISCO expansion and debottlenecking projects.

• Borrowings are expected to continue declining through FY 2025-26, with a debt-equity ratio target of 0.35-0.4 by year-end, before rising to fund expansion.

• India is projected to lead global steel demand growth at 8.5% in 2025.

• Imported coal prices are expected to remain elevated in Q3 and Q4, with landed costs possibly rising to INR 18,000 per tonne.