Steel Authority of India (SAIL) is expected to benefit from the decline in raw material prices on a sequential basis, though steel prices have seen some pressure.
Steel and raw material price movement
Weak local consumption and demand in China, rising exports and excess Chinese supplies have kept pressure on global prices. China remains the largest consumer of commodities in the world, and hence, China's supply and demand remain key for global metal prices. The safeguard duty in India is supporting domestic prices, even though the US tariff conflict has turned into a possible challenge for the sector.
Steel prices recover but still low
The average Hot Rolled Coil or HRC price benchmark fell in Q4FY25, down 11% year-on-year, as per Axis Securities. On a sequential basis, with the price recovery taking place towards the end of Q4FY25, HRC price benchmark was down just 1% sequentially.
Raw material prices to benefit SAIL
As per Motilal Oswal Financial Services' data, coking coal (premium HCC) continued its downward trajectory, with average premium HCC coking coal prices declining by $20/per tonne sequentially to $200 a tonne in 4QFY25. In 4QFY25, ferrous companies have projected a coking coal advantage of $10–15 per tonne, as per the brokerage.
Also, iron ore prices have largely remained stable on a sequential basis. Analysts have been expecting subdued costs to be the main reason for the margins to improve. The improvement in Steel prices will be somewhat apparent starting Q1FY26, it added.
SAIl Q4 results preview
Axis Securities expects SAIL’s earnings before interest, tax, depreciation and amortisation (EBITDA) to increase on a sequential basis by 35%.
Motilal Oswal also expects volume to see healthy growth and Q4 performance to be driven by some recovery in steel prices and reduced coal costs. It expects SAIL's net profit to come at ₹790 crore, an improvement over ₹140 crore in the previous quarter, though still lower than ₹1130 crore in the year-ago quarter.
The revenue is seen at around ₹29,220 crore for the March quarter, up 19.3% sequentially and 11.3% year-on-year, as per MOFSL's estimates.
SAIL Q4 results: Key monitorable
Management guidance on the debt reduction plan will be watched by investors. Also, the guidance on both domestic and international steel prices and capital expenditure plans by SAIL will be keenly tracked.
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