Steel Authority of India (SAIL IN) – Q2FY26 Result Update – Superior volume growth – HOLD
Published on 30 Oct 2025
SAIL is undertaking largely sustenance and debottlenecking capex in the near term and actual growth capex cash outflow would start from mid-FY27. Major order placement for 4.5mtpa IISCO project has been completed while rest of the orders would be completed within next two months. Debottlenecking projects at DSP, RSP and BSP are also on track. We expect SAIL to remain a play on steel prices as long-term volume growth would depend upon successful execution of planned capex; however, it has delivered superior volume growth with existing inventories (1.9mt finished goods inventory). We increase our FY26/27E EBITDA estimates by ~5/6% assuming higher volumes. At CMP, the stock is trading at an EV of 5.3x/5.4x FY27/FY28E EBITDA. Maintain ‘Hold’ with revised TP of Rs143 (Rs139 earlier) giving 5.5x Sep’27E EV/EBITDA.
