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IDBI Capital Report

Steel Authority of India Ltd. delivered a better‑than‑expected Q3 FY26 performance supported by strong volume growth even as pricing trends remained weak, according to IDBI Capital.

The company's revenue rose 3% quarter‑on‑quarter to Rs 27,400 crore, aided by a 4% QoQ rise in sales volumes, which also included 0.37 million tonnes of traded volumes from NMDC Steel. SAIL further boosted sales by liquidating 0.3 million tonnes of inventory during the first nine months of FY26.

However, realisations remained under pressure. Net sales realisation (NSR) fell 1% QoQ to Rs 53,669 per tonne, weighed down by a correction in steel prices through the quarter. As a result, profitability weakened despite higher volumes.

SAIL's Ebitda declined 9% QoQ to ₹2,300 crore, while Ebitda per tonne slipped 12% QoQ to Rs 4,507, largely due to an increase in raw material costs, IDBI Capital highlighted.

On the operational front, management announced plans to commission a 1 million tonne TMT bar mill at Durgapur over the next 18–24 months, supporting long‑term product mix expansion. The company is targeting 19.5 million tonnes of sales volumes in FY26, signalling continued focus on scale and market share.

IDBI Capital has rolled forward its valuation to FY28E and values SAIL at 6.5x EV/Ebitda, arriving at a target price of RS 151. The brokerage maintained its Hold rating, citing near‑term margin pressures offset by steady volume prospects.

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