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SAIL reported a healthy performance in Q1FY27

ICICIdirect Research 27 Jul 2026 DISCLAIMER

News: SAIL reported a healthy performance in Q1FY27. Total operating income stood at ₹26,246 crore (up 1% YoY, down 15% QoQ), with steel sales volume of 4.2 MT (down 10% YoY and 22% QoQ). Reported EBITDA for the quarter came in at ₹4,153 crore, with a corresponding EBITDA margin of 15.8% (up ~151 bps QoQ). Adjusted EBITDA/tonne improved to ₹10,725 in Q1FY27 from ₹8,287 in Q4FY26. Consequently, PAT stood at ₹1,644 crore (vs. ₹ 744 crore in Q1FY26 and ₹ 1835 crore in Q4FY26), including an exceptional expense of ₹144 crore towards the VRS Scheme.

View: SAIL's topline performance was largely supported by higher blended realisations, which increased by ~10% QoQ to ~₹63,833/tonne (up ₹ 5,170/tonne QoQ), amid safeguard duty led improvement in domestic steel prices. To our surprise, RM costs decline QoQ on per tonne basis while negative operating leverage limited the operational gains leading to an improvement of ~₹2,450/tonne in adjusted EBITDA/tonne during the quarter. While we await management's commentary on the near-term demand outlook and profitability, we believe the recent decline in steel prices, particularly in long products (down >₹ 5,000/tonne), is likely to impact earnings going forward given the company has higher share of long product vs. peers. Moreover, higher coking coal costs are also expected to weigh on margins in the coming quarter. With positive surprise on profitability, we expect the stock to open positive in opening trade today. 

Impact: Positive

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