Steel Authority of India Ltd. delivered exceptional financial results for Q1 FY27, with net profit more than doubling to ₹1,644 crore from ₹745 crore in the corresponding quarter last year. According to the latest results announced on Friday, this remarkable profit growth came despite lower production volumes and sales, demonstrating the company's strong operational efficiency and cost management capabilities. The company also reported EBITDA rising 50% YoY to ₹4,152.6 crore compared to ₹2,925 crore in the year-ago quarter, with margins expanding sharply to 15.82% from 10.68% year-on-year. The strong earnings with over 100% PAT growth and margin expansion could boost investor sentiment for SAIL stock, with the company's improved debt-equity ratio and operating efficiency remaining key positives.
SAIL shares responded positively to the strong quarterly results, rising as much as 6% on Wednesday, July 29, even as brokerages maintained bearish calls on the state-run steelmaker. The PSU stock was trading 5.1% higher at ₹174.32 as of 10:36 AM, with the stock having gained more than 17% so far in 2026 and delivered a 38% return over the last 12 months. Despite the positive market reaction, UBS maintained its 'Sell' rating with a target price of ₹170 and Citi reiterated its 'Sell' rating with a target price of ₹160. According to Bloomberg data, 14 of the 33 analysts covering SAIL have a 'Sell' recommendation, while 13 gave it a 'Buy' rating and six recommended to 'Hold'. The stock gained despite both UBS and Citi retaining 'Sell' ratings, as investors weighed the company's better-than-expected operating performance and management's reiterated FY27 volume guidance alongside its long-term expansion plans.
On a sequential basis, SAIL's performance showed mixed results with net profit declining 3% from ₹1,680 crore reported in the March quarter. The company's crude steel production stood at 4.76 million tonnes during the June quarter, compared with 4.85 million tonnes in the year-ago period and 5.08 million tonnes in the March quarter, reflecting a decline on both year-on-year and sequential basis. As per the company's statement, SAIL deliberately moderated production during the quarter by advancing scheduled repair and maintenance activities at the IISCO Steel Plant, Durgapur Steel Plant and Bokaro Steel Plant. During the post-results interaction, management maintained its FY27 volume growth guidance of around 13%, despite the first-quarter volume decline, attributing the weakness to planned maintenance shutdowns. The company also expects coking coal costs to decline in August and September after rising in the June quarter and reiterated its focus on cost savings through FY29.
The company expects significant cost relief in the coming quarters as imported coking coal costs are projected to decline by ₹1,000-2,000 per tonne in Q2 as global prices soften. Management indicated that flat steel prices have declined by around ₹300 per tonne in July from the first-quarter average, while long steel prices are down by around ₹2,900 per tonne. The company's average net sales realization in July stood at around ₹55,600 per tonne compared with about ₹57,100 per tonne in the June quarter, with flat steel realizations at ₹56,900 per tonne and long products at ₹54,200 per tonne. Panda noted that long steel prices had started recovering after recent declines, with expectations of ₹500-2,000 recovery. The company also highlighted its plans to reduce coking coal costs through higher production from its Tasra captive mine, expected to begin operations in December 2026.
The company's total income increased to ₹26,245.6 crore from ₹25,921 crore in Q1FY26, with revenue rising 1.2% year-on-year and broadly in line with the CNBC-TV18 poll estimate of ₹26,250 crore. Expenses stood at ₹24,146.32 crore, down from ₹25,189.19 crore in April-June of the preceding fiscal. Despite challenging market conditions, SAIL maintained its full-year production and capital expenditure targets while spending ₹2,575 crore on capital expenditure in Q1 against a target of ₹2,306 crore. The company retained its full-year capital expenditure target of ₹15,000 crore. SAIL sold 1.1 million tonnes of surplus iron ore in the June quarter, up from about 0.31 million tonnes a year earlier, with revenue from those sales rising to ₹574 crore from ₹157 crore. Management targets around 8 million tonnes of surplus iron ore sales this financial year, compared with roughly 3.5 million tonnes last year, though logistics constraints continue. UBS highlighted SAIL's plan to increase iron ore sales to 8 million tonne in FY27 from 3.8 million tonne in FY26.
Commenting on the results, Chairman & Managing Director Dr. Ashok Kumar Panda stated that "Amid global uncertainties, the domestic steel industry demonstrated resilience backed by sustained demand in domestic steel consumption. SAIL, through enhanced operational efficiencies, prudent cost management, and focused marketing initiatives, has delivered a significantly profitable first quarter in FY27. The company remains confident of leveraging robust manufacturing capabilities and continues to strengthen performance while capitalizing on the sustained domestic steel demand." UBS noted that the strong first-quarter EBITDA was driven largely by higher steel realisations, while volumes declined around 9% from last year due to planned shutdowns. The brokerage flagged potential downside to earnings from softer domestic steel prices, limited near-term capacity expansion and rising leverage as capex accelerates over the next two years. Citi struck a cautious tone, flagging potential downside to earnings from softer domestic steel prices, limited near-term capacity expansion and rising leverage as capex accelerates over the next two years. The company's capital expenditure is expected to rise from ₹15,000 crore in FY27 to over ₹20,000 crore in FY28 and ₹25,000-26,000 crore in FY29, mainly for the IISCO expansion project.
