Perivis

Summary of earnings call for Steel Authority of India Ltd published on 01 Aug, 2025

Steel Authority of India Limited (SAIL)
Q1 FY26
Call date · July 28, 2025

1 · Management Commentary

Key Positives

Key Negatives

Forward Guidance

2 · Q&A Highlights

Q 1 (Composite): What is the outlook for coking coal costs and their impact on margins in Q2?
A (Management):
• Q2 coking coal prices expected to remain flat vs Q1; stock valuation impact is a one-time event in Q1 and will not recur in Q2.
• Cost of production should ease, supporting margins.

Q 2 (Composite): What are the capex plans and status of major expansion projects?
A (Management):
• FY26 capex target is INR7,500 crores; Q1 capex achieved INR1,642 crores.
• IISCO expansion (4.5 mtpa) to start from FY27, with total capex ~INR36,000 crores over 3–4 years; tendering underway, order placement expected by Q3/Q4 FY26.

Q 3 (Composite): How is the NMDC Steel marketing arrangement reflected in financials and what is its impact?
A (Management):
• 0.37 million tons of NMDC steel sold in Q1, revenue ~INR1,800 crores.
• Reflected as purchase of stock-in-trade and revenue; margin is breakeven to slightly positive.

Q 4 (Composite): What is the impact of stock valuation and iron ore royalty on Q1 results?
A (Management):
• Stock valuation impact in Q1 was ~INR1,050 crores (vs Q1 last year), mainly due to lower coking coal prices.
• Iron ore royalty impact was INR173 crores vs Q4.
• Both are not expected to recur at the same magnitude in Q2.

Q 5 (Composite): What is the sales volume and NSR guidance for FY26 and Q2?
A (Management):
• FY26 sales volume guidance: ~18.5 million tons (excluding NMDC).
• Q1 blended NSR: INR51,700/ton; Q2 NSR expected to be lower due to seasonal factors, but recent price trends are improving.

Q 6 (Composite): What are the current inventory levels and risk of further markdowns?
A (Management):
• Finished steel inventory at 1.7 million tons (vs 1.4 million tons in March); in-process stock at 1.3 million tons.
• Inventory valued at Q1 cost, which is at a low level; no further markdown expected unless coal prices fall further.

Q 7 (Composite): What is the status of railway pricing and its sensitivity to coking coal costs?
A (Management):
• Provisional rail price for FY26 is INR74,000/ton, reflecting lower coking coal costs; future prices will adjust with coal cost movements.

3 · Other Key Numbers

All figures as stated in the call.



Note: This is an AI generated summary of the earnings call. There may be inaccuracies in the summary. Please refer to the original transcript before making investment decisions.