Steel Authority of India Ltd (SAIL) Q1 FY27 Earnings Call: EBITDA Surges >50%, Coal Cost Inflation Easing From August

Steel Authority of India Ltd held its Q1 FY27 earnings call on July 24, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline financials: EBITDA surges >50%, PAT nearly triples

• EBITDA of Rs.4,356 crores — up >50% from Rs.2,925 crores in Q1 FY 2025-2026, with margin of 16.7%, the best since FY 2021-2022; EBITDA per tonne reached Rs.10,464.
• PAT of Rs.1,636 crores — up ~150% YoY from Rs.685 crores in Q1 FY 2025-2026, with PBT at Rs.2,159 crores (up ~150% from Rs.890 crores).
• Sales turnover rose >1% — despite a 7-8% decline in sales volume to 4.2 million tonnes, driven by better realizations; crude steel production was 4.8 million tonnes (vs 4.9 million tonnes in Q1 FY 2025-2026).
• Captive mine sales contributed Rs.400 crores — in Q1 FY 2026-2027 (up vs Q1 FY 2025-2026), generating a profit of Rs.150 crores, driven by more than doubling of iron ore sales volumes from Odisha mines.
• Finished goods inventory increased by 0.2 million tonnes — in Q1 FY 2026-2027; management guides for no further increase in Q2 FY 2026-2027, followed by reduction in Q3 and Q4.

Coal cost inflation pressures Q1, but easing expected from August

• Imported coal cost of Rs.21,300/tonne — in Q1 FY 2026-2027 on consumption basis, up Rs.3,100 from Rs.18,100 in Q4 FY 2025-2026 and ~Rs.3,500/tonne YoY; management expects a progressive reduction of Rs.1,000-Rs.2,000/tonne from August onward in Q2 FY 2026-2027.
• Strait of Hormuz situation increased ocean freight — for fluxes, but SAIL offset the impact by reducing specific flux usage, saving Rs.25 crores in Q1 FY 2026-2027 vs Q1 FY 2025-2026.
• Cost reduction target of Rs.2,000-Rs.3,000 per tonne — for FY 2026-2027, with Q1 costs elevated due to capital repairs; improvement expected from Q2 FY 2026-2027 onward.
• By FY 2027-2028/FY 2028-2029, IISCO expansion — is expected to reduce variable cost by Rs.3,000-Rs.4,000 per tonne, with fixed cost rising by Rs.1,500-Rs.2,000 per tonne, yielding a net reduction of ~Rs.2,000 per tonne.
• Indigenous coal cost averaged Rs.13,100/tonne — in Q1 FY 2026-2027 vs imported coal at Rs.21,200/tonne; captive coal from SAIL's own mines expected to cost ~Rs.5,000-Rs.6,000/tonne from Q4 FY 2026-2027.
• Finance cost declined — due to lower cost of debt (6.24% in Q1 FY 2026-2027 vs 6.8% in Q1 FY 2025-2026), saving Rs.100 crores in the quarter.

Capital repairs curtail Q1 output; FY27 volume growth affirmed

• Q1 capex of Rs.2,575 crores — exceeded the Rs.2,306 crores target; full-year FY 2026-2027 capex guidance of Rs.15,000 crores maintained, with capex guided to rise to >Rs.20,000 crores in FY 2027-2028 and ~Rs.25,000-Rs.26,000 crores in subsequent years, increasing over the next 4-5 years.
• Production volumes expected to recover — from Q2 FY 2026-2027 onward after planned capital repairs at IISCO, Durgapur, and Bokaro reduced Q1 output by ~0.1 million tonnes; full-year growth expected over FY 2025-2026.
• Durgapur Steel Plant (DSP) TMT bar mill — with capacity of 0.8-0.9 million tonnes is expected to commission in September-December 2027 (FY 2027-2028), significantly reducing semis availability.
• Sub-grade fines sales target of 3 million tonnes — for FY 2026-2027 from Odisha group of mines, with plans for Chhattisgarh and Jharkhand mines; management expects double the quantity from Odisha in FY 2026-2027 vs FY 2025-2026.
• SAIL marketed 96,000 tonnes of semis for RINL — in Q1 FY 2026-2027; NMDC Steel volumes were zero, vs 3.73 lakh tonnes in Q1 FY 2025-2026, reducing combined third-party semis volumes sharply.

NSR rises Rs.5,000/tonne QoQ; finished steel share reaches 89%

• Blended NSR averaged Rs.57,156/tonne — in Q1 FY 2026-2027, up Rs.5,000 from Rs.52,000 in Q4 FY 2025-2026, with flat products at Rs.57,200 and long products at Rs.57,100.
• Product mix shifted toward finished steel — finished steel sales rose to 89% of total sales (from 86% in Q1 FY 2025-2026), with semis share declining to 11% from 14% as the company converted more semis into finished products; production mix: flats 52.7%, longs 34.8%, semis 12.5%.
• Q2 FY 2026-2027 NSR expected to decline — by Rs.1,000-Rs.2,000 sequentially due to monsoon and dull demand, with long products seeing a Rs.2,000 reduction in June/July but recent upward momentum of Rs.1,000.
• July 2026 NSR averaged Rs.55,600/tonne — (flat: Rs.56,900, long: Rs.54,200), reflecting the seasonal monsoon impact.
• Price gap between primary and secondary long products — narrowed to ~Rs.5,000/tonne, which management considers healthy and supportive of an uptick in primary TMT NSR.

Debt flat, debt-equity ratio improves to 0.36

• Debt at Rs.21,729 crores — as of 30 June 2026, nearly flat vs opening of Rs.21,663 crores; debt-equity ratio improved to 0.36 (from 0.38-0.39), with post-quarter further reduction to Rs.21,400 crores.
• Cost of debt declined to 6.24% — in Q1 FY 2026-2027 vs 6.8% in Q1 FY 2025-2026, contributing to the Rs.100 crore finance cost saving in the quarter.
• Working capital borrowings targeted to decline — in H2 FY 2026-2027 as inventory is reduced, with management guiding for inventory reduction in Q3 and Q4.

Trade measures support domestic steel; demand outlook positive

• Safeguard duty of 11-11.5% remains in place — entering its second year of a three-year term, providing relief to the domestic steel market; an anti-dumping duty investigation has been initiated and may provide additional relief.
• "Government of India imposed a definitive anti-dumping duty (ADD) on Met Coke for 5 years" — management stated this will not impact SAIL as the company has its own capacity equivalent to or surplus to its requirement.
• Management cited "government support" and encouraging GDP forecasts — of 6.4% to 7.2% over the next two years (FY 2027-2028 and FY 2028-2029) as strengthening the belief that the economy will continue to do well.
• Indian steel industry demand grew >8% — in Q1 FY 2026-2027 YoY, while production grew ~3%; net imports stood at 0.4-0.5 million tonnes (vs 0.3 million tonnes in Q1 FY 2025-2026).
• Rail pricing expected to improve — management expects better rail prices for FY 2026-2027 and no further P&L hit from downward revision; pricing is guided by efficiency and coal prices, not a fixed benchmark.
• Pay commission effective from 1st January 2027 — management will evaluate and possibly make a provision in Q4 FY 2026-2027; no calculations or provisions have been made yet.