Steel Authority of India (SAIL IN) – Q4FY26 Result Update – Higher steel pricing drive Q4; stepped up capex – ACCUMULATE
Published on 16 May 2026
SAIL has increased its capex guidance with major expansion activities commencing at ISP, while Bokaro and Bhilai projects are also expected to gather pace over FY28/29E. However, long-term volume growth remains dependent on timely execution as major capacities are now expected only from FY31 onward, while any delay could lead to further market share loss amid aggressive capacity additions by private steel players. Further, rising capex intensity over the next 3-4 years would require current steel pricing to sustain for longer term to keep balance sheet stable. Although imported coking coal and other input costs have risen sharply due to geopolitical disruptions, recent steel price hikes should largely offset the cost increase and support margins over the next few quarters. As China is supporting steel pricing by curtailing production/exports, we expect domestic prices to remain elevated as India is trading at discount on import parity basis. However, rising coking coal and impending demand destruction in near term on higher crude remains a risk. We raise our FY27/28E EBITDA estimates by ~20% on higher steel prices & lower opex. At CMP, the stock is trading at an EV of 5.4x/5.2x FY27/28E EBITDA. Maintain ‘Accumulate’ with revised TP of Rs209 (Rs176 earlier) giving same 5.5x Mar’28E EV/EBITDA.
