India: SAIL crude steel output falls 6% q-o-q, sales decline 22% in Q1FY27; profitability improves

• • Profitability improves despite lower q-o-q production and sales

• • Finance cost declines further; EBITDA margin strengthens to 16.7%

Steel Authority of India Ltd. (SAIL) reported a sharp year-on-year improvement in profitability during Q1FY27 despite a sequential decline in production and sales volumes amid the seasonal slowdown. The company’s EBITDA remained above INR 4,300 crore, supported by improved operating efficiencies and better steel realizations, while finance costs continued to decline.

Although crude steel production and sales moderated from the previous quarter, the company maintained healthy operating margins and strengthened its balance sheet during the quarter ended June 2026.

Highlights:

Crude steel production declines q-o-q: SAIL’s crude steel production stood at 4.8 mnt in Q1 FY’27, down 5.9% q-o-q from 5.1 mnt in Q4 FY’26 and 2.0% y-o-y from 4.9 mnt in Q1 FY’26. The sequential decline was primarily due to planned maintenance shutdowns at select units, coupled with lower production levels during the seasonally weak monsoon quarter. Meanwhile, saleable steel production declined to 4.5 mnt, down 4.3% q-o-q and 4.3% y-o-y from 4.7 mnt reported in both Q4 FY’26 and Q1 FY’26.

Sales volumes decline q-o-q: SAIL’s total steel sales stood at 4.2 mnt (4.163 mnt) in Q1 FY’27, comprising 4.106 mnt of domestic sales and 0.057 mnt of exports. Sales declined 21.5% q-o-q from 5.3 mnt in Q4 FY’26 and 9.5% y-o-y from 4.6 mnt in Q1 FY’26, as construction activity slowed during the monsoon season, resulting in weaker domestic demand and lower dispatches across key consuming sectors.

EBITDA declines q-o-q but rises sharply y-o-y: Sales turnover stood at INR 26,010 crore in Q1 FY’27, down 14.8% q-o-q from INR 30,541 crore in Q4 FY’26 but marginally 1.1% higher y-o-y than INR 25,731 crore in Q1 FY’26. EBITDA declined 8.5% q-o-q to INR 4,356 crore from INR 4,762 crore in the preceding quarter. However, on a year-on-year basis, EBITDA increased 48.9% from INR 2,925 crore, supported by improved operating performance. EBITDA margin stood at 16.7% during the quarter.

PAT more than doubles y-o-y: Profit after tax (PAT) stood at INR 1,636 crore in Q1FY27, compared with INR 1,680 crore in Q4FY26 and INR 685 crore in Q1FY26. While PAT eased 2.6% q-o-q, it registered a robust 138.8% increase y-o-y. Profit before tax (after exceptional items) also improved to INR 2,159 crore, up 142.6% y-o-y, though it declined 7.1% sequentially.

Operational profitability strengthens: SAIL’s EBITDA per tonne improved to INR 10,464/t, while finance cost declined further to INR 493 crore from INR 532 crore in Q4FY26 and INR 595 crore in Q1FY26. Net worth increased to INR 59,720 crore, reflecting continued improvement in the company’s financial position.

Outlook:

The domestic steel demand outlook remains constructive. According to JPC data cited by SAIL, India’s crude steel production increased by around 3% y-o-y to 42.1 mnt during Q1 FY’27, while finished steel consumption grew by approximately 8% y-o-y to 41.6 mnt, indicating healthy underlying demand despite the seasonal impact of the monsoon. The recovery in infrastructure, manufacturing and construction activity is expected to support steel consumption in the coming quarters, although domestic price trends and raw material costs will continue to influence producers’ profitability.