S A I L — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

S A I L reported a strong Q3 FY26, driven by robust sales volume growth and effective cost management, leading to a 60% increase in 9-monthly PAT and significant debt reduction. While Net Sales Realization saw a sequential dip, management anticipates improved margins in Q4 due to expected price hikes and continued cost control. The company is also progressing with its ambitious CAPEX plans, including the IISCO expansion and debottlenecking projects, targeting higher value-added product mix and increased capacity.

Highlights

  • 9-monthly FY26 revenue increased by 9% from ₹73,152 crores to ₹79,997 crores.

  • 9-monthly FY26 PAT increased by 60% compared to CPLY, highlighting operational efficiency and cost optimization.

  • 9-monthly FY26 sales volume grew by 16.3%, leading to significant inventory reduction and reduced borrowings.

  • Debt reduced by ₹5,000 crores in 9-monthly FY26, with an additional ₹2,000 crores reduction in January 2026.

  • Q3 FY26 saw a positive impact of approximately ₹100 crores from coking coal inventory valuation, with Q4 expected to see ₹200-400 crores positive impact.

Concerns

  • Q3 FY26 average Net Sales Realization (NSR) dropped to ₹47,735 compared to ₹48,836 in Q2 FY26.

  • Q3 FY26 saleable steel production was lower QoQ due to a shift in slab sourcing strategy between plants.

  • Coking coal prices are on an upward trend, with February expected to see a ₹1,200 increase and March another ₹1,000 increase in consumption rate.

Key financials

3 periods

Q2 FY26

  • Average NSR
    ₹48,836/ton

Q3 FY26

  • Average NSR
    ₹47,735/ton
    QoQ -2.3%
  • Blended Coking Coal Cost
    ₹18,351/ton

9-monthly FY26

  • Revenue
    ₹79,997 Cr
    YoY +9%
  • PAT
    —
    YoY +60%
  • Crude Steel Production
    14.35 million tonnes
    YoY +2%
  • Saleable Steel Production Growth
    —
    YoY +4.5%
  • Sales Volume Growth
    —
    YoY +16.3%

What they filed

Q1 FY27: revenue up 1.2%, net profit up 120.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue24,675 24,490 29,316 25,922 26,704 +8%27,371 +12%30,813 +5%26,246 +1%
EBITDA2,913 2,030 3,484 2,769 2,528 −13%2,294 +13%4,409 +27%4,153 +50%
Net profit897 142 1,251 745 419 −53%374 +163%1,835 +47%1,644 +121%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹10,000 Cr Raised — ISP expansion, IISCO expansion
    • IISCO expansion (total estimated) ₹36,000 Cr
    • IISCO expansion (FY27) ₹7,000 Cr
    • Durgapur Steel Plant (DSP) TMT bar mill
    • Rourkela Steel Plant (RSP) Caster No. 4
    • DSP debottlenecking project

    Previously planned ₹7,500 Cr

    For the full year, initial guidance was Rs.7,500 and then final guidance is Rs.10,000 crores. It will be anything between these two. IISCO expansion, CAPEX total will be around 36,000 crores. So, from 2026-2027, we will have major amount coming from IISCO. So IISCO amount could be maybe around 7,000 to 8,000 crores in case of IISCO so far as 2026-2027 is concerned. And after that, we can pick up. Means the peak figure will be in 2027-2028 and also, in 2028-2029 for IISCO. So far as RSP is concerned, they have already completed Caster No. 4, and the production is going to start now. It has already started over there. So, that part is over. So far as DSP is concerned, the debottlenecking downfield project has already started and that will take around 18 months to 20 months' time. TMT mill, yes. Which we said the TMT mill at the same time. After TMT mill also, we are starting one blast furnace over there. We will knock off one old blast furnace. We will start a new blast furnace. So, along with blast furnace, we have another converter, etc. So, beyond TMT mill, we have also approved another package for them. And which will also increase the overall capacity of Durgapur Steel Plant by 1 million tonnes.
  • Debt Debt disclosed
    • Repayment Debt reduction in nine-monthly FY26 ₹5,000 Cr
    • Repayment Debt reduction in January 2026 ₹2,000 Cr
    Reduction in debt is close to Rs 5,000 crores in nine-monthly, and in January alone, we have again reduced by around Rs 2,000 crores, and momentum continues for February as well as March.

Guidance & targets

Production Volume

  • Hot Metal Volume Production Volume · FY26 · Medium confidence 20.5-21 million tonnes
    And year ending figure of hot metal could be around 20.5 or something like that. Close to 21 million tonnes.

    — Ashok Panda

  • Hot Metal Volume Production Volume · FY27 · High confidence 22.5 million tonnes
    We are targeting 22.5 for 2026-2027.

    — Ashok Panda

Sales Volume

  • Sales Volume Sales Volume · FY26 · Medium confidence 19.5 million tonnes
    So going by this, we will be able to achieve a sales volume around 19.5 year ending which will be more than the production.

    — Ashok Panda

Product Mix

  • Semis Percentage Product Mix · within 2 years · High confidence near zero

    From 10% today

    semis will be almost very close to zero percentage at that point of time. So, it is only a matter of time that we will see that semis will be zero.

    — Ashok Panda

Profitability

  • EBITDA per ton (post IISCO expansion) Profitability · post IISCO expansion · High confidence >₹10,000

    From ₹6,000-7,000 today

    then the numbers will be more than Rs. 10,000 per ton from ISP expansion.

    — Ashok Panda

Capex

  • Capex Spend Capex · FY27 · High confidence ₹15,000 crores
    The CAPEX guidance for FY 26-27 is Rs. 15,000 crores.

    — Ashok Panda

Cost Management

  • Interest Cost Reduction Cost Management · FY26 · High confidence ₹1,000 crores
    So, overall, for the year, the interest cost reduction could be around Rs. 1000 crores.

    — Ashok Panda

Top Line

  • Top Line Top Line · FY26 · Medium confidence big number (implied >₹1 lakh crores)

    From almost at Rs. 1 lakh crores earlier today

    And you will find that in this particular year, your top line, which was remaining almost at Rs. 1 lakh crores earlier, now it is going for a big number in this year.

    — Ashok Panda

Market context

  • Global Growth Global Economy · 2026 · High confidence 3.3%
    Global growth is projected to remain resilient at 3.3% in 2026 and expected to be 3.2% in 2027

    — Ashok Panda

  • Global Growth Global Economy · 2027 · High confidence 3.2%
    Global growth is projected to remain resilient at 3.3% in 2026 and expected to be 3.2% in 2027

    — Ashok Panda

  • India GDP Growth Indian Economy · High confidence 6.4%-7.3%
    The projections for India have also been revised upwards to 6.4%, from 6.4% to 7.3% by various agencies.

    — Ashok Panda

What to watch in Q4 FY26

Q4 FY26 Sales Volume

next quarter
Current 14.6 million tonnes (9-monthly)
Target Higher than Q3, contributing to FY26 target of 19.5 million tonnes

Why it matters

Sales volume is a key driver of revenue and profitability; achieving the FY26 target depends on strong Q4 performance.

So going by this, we will be able to achieve a sales volume around 19.5 year ending which will be more than the production. ... 14.5 is already done in 9M. And our Q4 volumes will be more than that of Q3.

Risks & concerns

  • Volatility in coking coal prices

    medium

    Coking coal prices are increasing, with expected rises in February and March, impacting cost of production.

    Management acknowledged

  • Impact of plant accidents on production

    low

    Recent accidents at Bokaro and Bhilai caused temporary production losses but operations have normalized, with minimal expected impact on Q4.

    Management downplayed

Q&A highlights

7 direct
Inventory write-off/gain from coking coal prices Direct
In Quarter 3, we had a positive and that could be somewhere around a maximum Rs. 100 crores. In Quarter 4, because the coal prices are on the rise, we expect that the cost of production is going to go up in Quarter 4. So, we have not yet estimated, but yes, it will have a good positive impact on the profitability as well as the margins, so to say.

Clarifies the impact of coking coal price fluctuations on inventory valuation and future profitability.

Asked by Amit Lahoti

EBITDA per ton improvement from expansion projects (IISCO) Direct
And we believe that ISP expansion, once expansion is over in time, then the numbers will be more than Rs. 10,000 per ton from ISP expansion.

Provides a specific financial target for the impact of major expansion projects on core profitability.

Asked by Amit Lahoti

Quantification of price increases in December and January Direct
So, the real increase of around, say, Rs. 2,000 to Rs. 2,500 was reflected in January in long and around, say, Rs. 3,300 to Rs. 3,500 in flat in January so far as sales price is concerned. But the actual increases happened during the month of June in 2-3 tranches. So, all of that will get reflected in February.

Gives specific figures for recent price hikes and indicates further increases are expected, impacting Q4 realizations.

Asked by Pinakin Parekh

Coking coal cost increase in Q4 Direct
When we talk about imported coal price, like in January, the average imported coal price is Rs.18,500 and which is expected to increase by Rs.1,200 in February, which is Rs.19,700. And this is because of the weighted average arrivals and the stock quantities and all that. But otherwise, as you said correctly, the index has gone up to $251 per ton. It was hovering around $190, $185, $190. So, in February, we are expecting around Rs.1,200 increase in consumption rate will be there. And in March, there could be an increase of another Rs.1,000 over and above this.

Details the expected increase in coking coal costs, a key input, for the upcoming quarters.

Asked by Pinakin Parekh

Reasons for sequential decline in employee cost in Q3 Direct
There are two reasons for it. One is actuary which is depending on the discounting factor. That is a different thing and factor is increasing. The other thing is basically the gratuity component. As you can see that in H1 we have taken a hit because of that 25 lakhs. After achieving 50% in IDA, then it was increased to 25 lakhs. So, that was the reason why actually Q2 was appearing to be on the higher side and also the discounting rate is increasing. So, all put together in Q3 we are finding that it is appearing to be little less than that and the same thing will continue in Quarter 4 as well.

Explains the drivers behind the employee cost reduction, clarifying it's not a structural change but accounting adjustments.

Asked by Vikas Singh

Impact of recent accidents at Bokaro and Bhilai plants Direct
So, far as Bokaro is concerned actually that is already sorted out. It impacted us in Quarter 2 greatly and now the SMS both the converters in SMS, Steel Melting Shop, so they are in full gear, and they are producing at almost 100% target levels. ... In Bhilai SMS the converter which had the vessel changed, after that actually there is a bit of problem because of which spillover of metal had taken place, and it had burnt the electrical cables. And it was down for around 15-20 days. Now, it has come back. So, the production at Bhilai Steel Plant has again picked up to its normal level of around 18,000 to 18,500 tons per day of hot metal. So, it had impacted us around 15 days to some extent. Around 2000 tons per day was the impact in physical terms for around 15 to 16 days. Now, it is completely alright and in future also in Quarter 4 it is not going to have any problem.

Provides details on the operational impact of recent accidents and confirms that production is back to normal, with minimal expected impact on Q4.

Asked by Vikas Singh

Reason for negative volume impact in Q3 EBITDA bridge despite overall sales growth Direct
That's primarily because of the reduction in production of saleable steel. Even if there is improvement in hot metal and cold steel to some extent, but saleable steel came down because of the reason that actually in the previous quarters at RSP, New Hot Strip Mill has more capacity. So, they were producing more by taking slabs from the excessive stock of Bokaro Steel Plant. So, right now because in Bokaro Hot Strip Mill has picked up and everywhere it has picked up, so, in-process stock has come down at Bokaro Steel Plant. That is the reason why actually at RSP, the saleable steel level remained low.

Clarifies that the negative volume impact in the EBITDA bridge was due to lower saleable steel production QoQ, not sales volume, driven by internal plant dynamics.

Asked by Pallav Agarwal

2 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Overview

S A I L delivered a strong performance in Q3 FY26, with 9-monthly revenue increasing by 9% to ₹79,997 crores and PAT growing by 60% YoY. This was driven by a significant 16.3% growth in sales volume for the nine-month period, leading to substantial inventory reduction and lower borrowings. The company highlighted operational efficiency, cost optimization, and good treasury management as key contributors to its improved financial prudence.

Economic & Industry Outlook

Globally, growth is projected to remain resilient at 3.3% in 2026 and 3.2% in 2027, with inflation stabilizing. India's GDP growth projections have been revised upwards to 6.4%-7.3%. The Indian steel industry continues to experience robust demand, with consumption growing by almost 7% and crude steel production by 9.5% during the nine-month period. India has become a net exporter, with exports growing by 33% to 4.8 million tonnes, while imports reduced by 37% to 4.65 million tonnes.

Production & Sales Strategy

Crude steel production grew by 2% to 14.35 million tonnes in 9-monthly FY26, and saleable steel grew by 4-5%. The company is actively outreaching to retail and other consumers, resulting in the 16.3% sales volume growth. Management aims for a hot metal volume of 20.5-21 million tonnes for FY26, increasing to 22.5 million tonnes in FY27. The sales volume target for FY26 is around 19.5 million tonnes, which is higher than production, indicating continued inventory liquidation.

Cost Management & Efficiency

The company saw a positive impact of approximately ₹100 crores from coking coal inventory valuation in Q3, with an expected positive impact of ₹200-400 crores in Q4. However, coking coal prices are on an upward trend, with consumption rates expected to increase by ₹1,200/ton in February and another ₹1,000/ton in March. The average blended coking coal cost for Q3 was ₹18,351/ton. The company is also focusing on reducing power costs by sourcing from RE power sources, contributing to structural savings.

Capital Expenditure & Expansion Plans

S A I L has revised its FY26 CAPEX guidance to ₹10,000 crores (from an initial ₹7,500 crores) and plans ₹15,000 crores for FY27. A major focus is the IISCO expansion, estimated at ₹36,000 crores, with ₹7,000-8,000 crores allocated for 2026-2027, targeting completion by FY30. This expansion is expected to boost EBITDA per ton to over ₹10,000. Debottlenecking projects at DSP and RSP are underway, with DSP's 1-million-ton TMT bar mill expected in 18-24 months, aiming to reduce semis percentage to near zero.

Debt Reduction & Financial Prudence

The company successfully reduced its debt by ₹5,000 crores in the first nine months of FY26, with an additional ₹2,000 crores reduction in January alone. This significant deleveraging has led to a ₹500 crore reduction in interest costs during the nine-month period, with an expectation of another ₹500 crores reduction in Q4, totaling ₹1,000 crores for FY26. This focus on financial prudence and inventory liquidation is aimed at accommodating future CAPEX requirements.

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