SAIL - S A I L

📊 NSE: SAIL 🏢 Steel - Large 📅 Last Updated: 12/14/2025 12:31

💰 Financial Performance

Revenue Growth by Segment

Revenue from operations reached INR 52,625 Cr in H1 FY26, representing an 8.12% growth compared to INR 48,672 Cr in H1 FY25. Total operating income for FY25 was INR 1,02,478 Cr.

Geographic Revenue Split

Operations are geographically diversified across India with five integrated steel plants in Bhilai, Durgapur, Rourkela, Bokaro, and Burnpur. The marketing network covers virtually all districts in India through 37 Branch Sales Offices and 37 Stockyards.

Profitability Margins

Profit After Tax (PAT) for H1 FY26 was INR 1,112 Cr, a 31.75% increase from INR 844 Cr in H1 FY25. FY25 PAT was INR 2,147.96 Cr. Profitability is sensitive to coking coal prices, which caused a 7% decline in profitability per tonne in FY25.

EBITDA Margin

EBITDA for H1 FY26 was INR 5,754 Cr (10.93% margin), up 2.88% from INR 5,593 Cr (11.49% margin) in H1 FY25. The slight margin compression is attributed to volatility in global steel pricing and raw material costs.

Capital Expenditure

SAIL has announced a phase-wise expansion to increase crude steel capacity to 35 MnTPA by FY32. The first phase at IISCO Steel Plant involves a capex of INR 40,000 Cr (inclusive of maintenance) to be funded in a 50:50 debt-equity mix, with major deployment starting FY27.

Credit Rating & Borrowing

SAIL maintains a strong credit profile supported by its 'Maharatna' status and 65% GoI ownership. It has access to fund-based bank facilities of INR 10,000 Cr, which remained largely unutilized, providing high financial flexibility.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Iron Ore (100% captive sourcing) and Coking Coal (highly volatile pricing). Coking coal price spikes significantly impact margins as seen in the 7% profitability decline in FY25.

Import Sources

Iron ore is sourced from captive mines in Jharkhand, Odisha, and Chhattisgarh. Coking coal is largely imported to meet requirements, exposing the company to global price volatility.

Key Suppliers

Captive mines provide 100% of iron ore requirements. Coking coal is procured from various international suppliers, though specific company names are not disclosed in the provided documents.

Capacity Expansion

Current crude steel capacity is ~20 MnTPA. Planned expansion targets 35 MnTPA by FY32. The IISCO plant expansion will add 4.60 MnTPA by the end of FY29.

Raw Material Costs

Raw material prices, particularly coking coal, are volatile. In FY25, higher coking coal prices led to a 7% decline in profitability per tonne despite a 4.04% CAGR in sales volume since FY21.

Manufacturing Efficiency

The company operates at near full capacity. In FY25, it produced 20.31 MT of hot metal, 19.17 MT of crude steel, and 17.94 MT of saleable steel.

Logistics & Distribution

Distribution is managed through a dedicated Transport and Shipping department and four regional offices (Southern, Western, Eastern, and Northern).

📈 Strategic Growth

Expected Growth Rate

4.04%

Growth Strategy

Growth will be achieved by expanding crude steel capacity from 20 MnTPA to 35 MnTPA by FY32. This includes a INR 40,000 Cr investment at IISCO and de-bottlenecking initiatives to convert semis into higher-margin saleable steel.

Products & Services

Primary products include hot metal, crude steel, and saleable steel. Value-added steel products (for industrial and mechanical applications) comprised 55.30% of total saleable steel in FY25.

Brand Portfolio

SAIL

New Products/Services

Focus is on increasing the share of value-added steel products, which currently represent 55.30% of the product mix, to improve overall realizations and margins.

Market Expansion

SAIL is expanding its retail footprint by adding 41 new distributors in the 1-Tier channel and strengthening its B2C presence through a network of ~5,200 dealers.

Market Share & Ranking

SAIL is one of the largest integrated steel producers in India with a 'Maharatna' status.

Strategic Alliances

SAIL has multiple JVs including NTPC-SAIL Power Company, International Coal Ventures, Bastar Railway Private Ltd, and mjunction services limited.

🌍 External Factors

Industry Trends

The industry is shifting toward a low-carbon economy. SAIL is positioning itself through digitalization, SAP GRC deployment, and a commitment to sustainable profitability through product diversification.

Competitive Landscape

SAIL competes with other large domestic integrated players and imports. Its competitive edge lies in its integrated value chain and government linkages.

Competitive Moat

Moat is derived from 100% captive iron ore mines, 'Maharatna' status providing financial autonomy, and strong GoI parentage (65% stake) which ensures access to low-cost capital.

Macro Economic Sensitivity

Highly sensitive to domestic infrastructure demand and global steel cycles. Robust domestic demand has allowed the company to operate at near full capacity.

Consumer Behavior

Rising demand for value-added steel in industrial and mechanical applications is driving SAIL's shift toward a 55.30% value-added product mix.

Geopolitical Risks

Global steel market volatility and international coking coal price fluctuations are primary external risks.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013, SEBI LODR 2015, and environmental norms set by the Ministry of Environment, Forest and Climate Change (MoEF&CC).

Environmental Compliance

SAIL is compliant with ISO 14001:2015 and voluntarily subscribes to the Charter on Corporate Responsibility for Environmental Protection (CREP).

Taxation Policy Impact

Effective tax rate is approximately 23% based on H1 FY26 PBT of INR 1,443 Cr and PAT of INR 1,112 Cr.

Legal Contingencies

SAIL faces a potential retrospective tax liability of INR 2,687 Cr following a Supreme Court judgment on state mining taxes (Jharkhand: INR 831 Cr; Odisha: INR 1,856 Cr).

⚠️ Risk Analysis

Key Uncertainties

Key risks include the cyclicality of the steel industry, volatility in coking coal prices (which impacted FY25 margins by 7%), and the INR 2,687 Cr retrospective mining tax liability.

Geographic Concentration Risk

Production is concentrated in Eastern India (Jharkhand, Odisha, West Bengal, Chhattisgarh), while sales are distributed nationally through 37 branch offices.