SAIL Q2 FY26 earnings call.
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Revenue
₹26,704 Cr
verified against source
Revenue YoY
8%
reported change
EBITDA
₹5,754 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
SAIL reported H1 FY26 revenue of ₹52,625 crore (+8% YoY) with PAT at ₹1,112 crore (+32% YoY), driven by strong 17% volume growth in sales to 9.46 million tonnes. However, EBITDA margin compressed to 10.93% from 12.9% YoY due to steel price declines and higher input costs. The company reduced borrowings by over ₹3,000 crore to ₹26,427 crore, strengthening the balance sheet. Management expects seasonal demand improvement in H2 with Q4 margins potentially reaching 14-15%. Volume guidance of 18.5 million tonnes for FY26 remains intact, with FY27 targeting 5-7% volume growth from de-bottlenecking. Capex will accelerate beyond ₹10,000 crore in FY27 to fund ISCO expansion (4.5 MT at ₹33,000 crore). Key risks include persistent H1 oversupply pressure on prices, coal cost inflation (up ₹700/tonne since August to ₹17,300), and unresolved employee wage revision costs from January 2027.
Colored figures show movement against the previous available record.
Guidance to track
- Full year sales volume guidance of 18.5 million tonnes remains intact, with H2 targeting inventory reduction by keeping sales above production.
- FY27 volumes expected to grow 5-7% over FY26 driven by de-bottlenecking projects at various steel plants including Bhilai and Rourkela.
- Q4 EBITDA margins expected to improve to 14-15% range on seasonal demand pickup, improved production from resolved Bokaro issues, and better cost control.
- H1 capex achieved at ₹3,337 crore with full year target in excess of ₹7,500 crore. FY27 capex expected to jump above ₹10,000 crore for ISCO expansion.
Risks flagged
- H1 saw production growth of 12%+ outpace demand growth of 8%, creating oversupply that continues to pressure domestic steel prices, partially offsetting volume gains.
- Imported coal price already up ₹700/tonne since August to ₹17,300, expected to trend toward ₹18,000-18,100 in Q3, potentially offsetting any steel price recovery benefits.
- Cumulative provisional price provisions of ₹13,800 crore for rail and defense contracts remain under finalization, creating earnings visibility uncertainty not fully addressed.
- Wage revision due from January 2027 with management unable to quantify the quantum, representing a significant unquantified cost headwind approximately 18 months away.
Key quotes
- In quarter 3 and quarter 4 we are looking at reduction in the salable steel inventory by increasing the sales volume more than that of the production volumes.
- We are looking at debt equity ratio on non-IndAS basis of 0.46 which is what we want to reduce it down to 0.35 or maybe 0.4 by the year end and after that from next year our capex is going to pick up primarily because of the deep bottlenecking projects as well as the expansion projects of IISCO.
- The second half of the financial year is always the best for the steel industry and we hope the trend would continue in this year as well.
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