S A I L

SAIL reported a strong Q4 FY25 with crude steel production of 5.09 million tons, a 10% QoQ growth. Sales volume reached a record 5.33 million tons, up 20% QoQ and 17% YoY. This led to a turnover of INR29,121 crores, a 20% QoQ increase, and a net profit of INR1,178 crores, growing over 16% YoY. For the full year FY25, crude steel production was 19.17 million tons, and sales volume was 17.9 million tons, marking a 5% YoY increase and the best annual sales performance. The company achieved a turnover of approximately INR1,02,000 crores, with EBITDA of INR11,644 crores and PAT of INR2,148 crores.

SAIL achieved a cost reduction of approximately INR650 crores in FY25 through improved technological parameters and operational efficiencies. Key improvements include a reduction in coke rate to 421 kg per ton of hot metal from 440 kg previously, and an increase in annual average blast furnace productivity to 2.02 tons per meter cube per day from 1.88. The company also reduced specific CO2 emissions by over 3% in FY25. These gains were driven by stopping inefficient blast furnaces and increasing production from larger, more efficient units.

The company successfully reduced its borrowings by approximately INR700 crores YoY, bringing the total debt down to INR29,811 crores as of March 31, 2025, from INR30,593 crores on March 31, 2024. This reduction occurred despite borrowings peaking at INR35,659 crores on June 30, 2024. Management aims for further debt reduction in FY26, leveraging internal accruals and a healthy debt-to-equity ratio to fund future growth and capex.

SAIL plans to increase its crude steel capacity from the current 20 million tons to 35 million tons by 2030, an increase of 15 million tons. For FY26, a capex of INR7,500 crores is planned, with major spending expected from FY27 onwards. Brownfield expansion at IISCO Steel Plant (ISP) is expected to add 0.5 million tons by FY27-28, with the ultimate capacity reaching 7 million tons by 2029. Debottlenecking activities at Durgapur, Bhilai, and Rourkela Steel Plants are projected to add 1-1.5 million tons by 2028.

The company is implementing a strategy to utilize low-grade iron ore fines through pellet plants. A 4 million tons pellet plant is planned for Goa, which will consume both low-grade fines and fresh fines. Pellet plants are being developed on a Build-Own-Operate (BOO) basis, meaning their capex is not included in SAIL's direct capex. The Bhilai pellet plant is expected to commence operations by June 2025, while Rourkela and Durgapur plants are in the tendering stage, with completion expected within three years.

Despite global economic uncertainties, the Indian steel industry is experiencing significant growth driven by robust domestic demand and infrastructure investments. Crude steel production grew over 5% and finished steel consumption over 10% in FY25. Management expects steel demand to grow over 8% in the coming years. While steel prices softened, safeguard duties and growing demand are anticipated to stabilize and boost realizations, especially after the monsoon season. Imported coking coal prices have stabilized around INR17,000-17,500 per ton in April/May.