Shares of Steel Authority of India (SAIL) experienced significant volatility during trading on Monday following the company’s report of a notable increase in earnings for the March quarter. Brokerages, however, are divided regarding the sustainability of steel margins and the outlook for volume growth.
The stock initially fell nearly 2% to ₹188.21 but rebounded to reach an intraday high of ₹193.99, compared to the previous close of ₹192.40. By 10:57 AM, the stock was trading at ₹190.02 on the National Stock Exchange (NSE).
For the March quarter of FY26, SAIL reported a year-on-year growth of 42% in standalone net profit, amounting to ₹1,680 crore, which was buoyed by higher revenues and improved steel realizations.
Brokerages Differ in Outlook
Investec maintained a “buy” rating on the stock, setting a target price of ₹270. The brokerage highlighted a strong operational performance in the fourth quarter, noting that EBITDA exceeded estimates by 19% due to enhanced spreads. While concerns linger about whether pricing and spreads have peaked, Investec anticipates a quarterly spread expansion of ₹2,200 per tonne in Q1FY27, with further upside potential. The brokerage also stated that SAIL’s management guidance of 16% volume growth, targeting 22 million tonnes for FY27, is achievable by FY28, emphasizing the company’s focus on operational efficiencies and capital expenditure for growth.
Conversely, Morgan Stanley retained an “underweight” rating with a target price of ₹140. The brokerage remarked that adjusted EBITDA fell short of its estimates yet surpassed consensus expectations. Morgan Stanley observed that both volumes and realizations were weaker than anticipated, although this was somewhat mitigated by lower costs. The firm forecasts margin expansion in Q1FY27 due to rising steel prices but expressed skepticism regarding the FY27 volume projection of 22 million tonnes.
Citi also maintained a “sell” rating, raising its target price to ₹180. The brokerage reported that fourth-quarter EBITDA increased by approximately 53% year-on-year, primarily due to an 8% rise in realizations, while volumes remained flat and costs rose by about 2%. Adjusted EBITDA per tonne climbed to ₹8,280, up from ₹4,465 in the previous December quarter and ₹5,405 from a year earlier.
Citi noted that gains in EBITDA per tonne were largely driven by a ₹4,750 per tonne increase in realizations, partially countered by a nearly ₹935 per tonne rise in costs. The brokerage highlighted internal commentary suggesting a 13% volume growth projection for FY27, anticipating weaker demand trends in the first half of the year but a recovery later on.
Despite the expectation that spot steel realizations will remain ₹4,500-5,000 per tonne higher than in the fourth quarter, Citi raised concerns about escalating coking coal costs, upcoming wage revision pressures, and increasing capital expenditure commitments. The brokerage pointed out that the next phase of capacity expansion could be about three years away and that rising debt levels might restrict the potential for EBITDA per tonne upside.
Published on May 18, 2026.
