Synopsis:
Shares fell up to 5% despite strong YoY profit and revenue growth, as EBITDA missed estimates and margin concerns weighed on sentiment. A major brokerage downgraded the stock, citing cost inefficiencies, even as expansion plans and capex guidance signal long-term growth potential.
The shares of the leading steel producer plummeted up to 5 percent in today’s trading session despite the company’s net profit and revenue zoomed 808 percent and 8 percent, respectively, in Q1FY26.
With a market capitalization of Rs 51,832.66 crore, the shares of Steel Authority of India Ltd were trading at Rs 125.50 per share, decreasing around 4 percent as compared to the previous closing price of Rs 130.65 apiece.
The shares of Steel Authority of India Ltd have seen negative movement after reporting mixed results in Q1FY26. Revenue decreased by 12 percent on a quarter-on-quarter basis from Rs. 29,316 crore in Q4FY25 to Rs. 25,922 crore in Q1FY26. Further, revenue increased by 8 percent year on year, from Rs 23,998 crore in Q1FY25 to Rs 25,922 crore in Q1FY26.
The company’s net profit decreased by 40 percent on a quarter-on-quarter basis, from Rs. 1,251 crore in Q4FY25 to Rs. 745 crore in Q1FY26. Further, net profit increased significantly by 808 percent year on year from Rs 82 crore in Q1FY25 to Rs 745 crore in Q1FY26
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Despite robust earnings growth, Morgan Stanley retained its ‘underweight’ rating on the stock and cut the target price by 20 percent to Rs 105. The downgrade reflects concerns over SAIL’s operational efficiency, as reported EBITDA missed estimates by 16% and adjusted EBITDA lagged by 22%, indicating persistent margin pressures and elevated cost structures.
Steel Authority of India Limited (SAIL) reported Rs 28,315.56 crore in segment revenue for Q1 FY26, down from Rs 31,300.84 crore in Q4 FY25. Bhilai Steel Plant led with Rs 7,448.88 crore, followed by Rourkela and Bokaro. Yearly revenue reached Rs 1,11,654.15 crore in FY25, with Bhilai contributing the most at Rs 33,432.83 crore, reflecting its dominant role in SAIL’s operations.
SAIL plans to ramp up its steelmaking capacity from ~20 MT to 35 MT by 2030. Tendering has commenced at IISCO Steel Plant, with other units to follow. For FY26, the company has guided a capex of Rs 7,500 crore, while the majority of investments are expected to accelerate from FY27 onwards, signaling a strong growth pipeline.
Steel Authority of India Limited is engaged primarily in the steel manufacturing business. The Company is engaged in the manufacturing and sale of iron and steel products. The Company’s business segments include five integrated steel plants and three alloy steel plants.
Written by Abhishek Singh
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