SAIL reports H1 FY26 growth, debt reduction despite challenging market

Steel Authority of India Limited (SAIL) held a conference call on October 30, 2025, to discuss its Q2 and H1 FY26 financial results. For the first half of FY26, the company reported an 8% increase in revenue from operations to Rs.52,625 crores, up from Rs.48,672 crores in the same period last year. Profit before tax rose by 28% to Rs.1,443 crores, and profit after tax increased by 32% to Rs.1,112 crores. Sales volume for H1 FY26 reached 9.46 million tons, a 17% increase from 8.11 million tons in the prior year, contributing to a substantial reduction in borrowings by over Rs.3,000 crores. Borrowings on September 30 stood at Rs.3,384 crores lower than the previous year.

SAIL's EBITDA margin for H1 FY26 was 11.01%, with expectations for improvement in Q3 and Q4, potentially reaching 14-15% by Q4. This anticipated improvement is attributed to the completion of capital repairs, increased production, and an expected uptick in steel demand. The company is also focusing on liquidating inventory through frequent auctions of by-products, scrap, and defective items, which contributed to better realizations in Q2. Sales of these items amounted to Rs.1,140 crores in Q2, an increase of Rs.250 crores from Q1.

Looking ahead, SAIL projects a volume growth of 5% to 7% in FY26-27, driven by de-bottlenecking initiatives across its steel plants and future CAPEX. Capital expenditure is expected to exceed Rs.7,500 crores in the current year, increasing to over Rs.10,000 crores in FY26-27, primarily for IISCO expansion and de-bottlenecking projects. The company aims to fund this expansion with a 50-50% split between debt and internal accruals, targeting a debt-to-equity ratio of 0.3 to 0.4 by year-end.