Steel Authority of India · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
Coking coal prices have risen from Q4 average of ₹18,200/ton to April ₹21,000/ton and May ₹21,800/ton. Management estimates ~₹2,000/ton cost increase translating to ~₹1,400-1,500/ton impact on hot metal. Combined with 30-day inventory buffer, this will partially moderate the price benefit.
Management acknowledged that Q1 and Q2 typically see muted demand due to post-Q4 restocking. With geopolitical uncertainties (Middle East) and potential inflation concerns, there could be buyer resistance to price hikes. Steel prices at current elevated levels may face correction pressure.
Management confirmed that pay revision guidelines from government are pending (applicable from January 2027). Historical revisions have been ~15%. This cost will be provisioned in Q4 FY27 and is over and above current employee cost guidance. The quantum remains uncertain pending government committee formation.
Salem Steel Plant continues to bleed with CRM mill yield at only 83-84% vs target 90%. Management outlined a turnaround plan (PNG replacement, cheaper power, importing slabs) but no expansion planned. This remains a drag on consolidated profitability despite management's turnaround efforts.
