S A I L Q1 FY27 Results (NSE: SAIL)
Signal: Margin expansion
The read
The key inflection is a return to 16.6% operating margin from 11.3% YoY and 15.45% in Q4FY26, lifting PAT to ₹1644.05 crore; however, revenue growth was only 1.25%, the margin expansion is materially influenced by inventory-cost movements, and the trajectory remains exposed to provisional government pricing and elevated sub-grade-fines inventory.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹26,245.67 Cr | +1.25% | -14.8% |
| EBIT | ₹2,797.91 Cr | N/A | |
| Net profit | ₹1,644.05 Cr | +120.7% | |
| EPS | ₹3.98 | +121.1% | |
| EBIT margin | 16.6% |
P&L walk
Consolidated revenue of ₹26245.67 crore grew 1.25% YoY, while EBITDA rose to ₹4358.25 crore and margin reached 16.6%; PAT of ₹1644.05 crore was supported by operating improvement despite ₹144.01 crore of VRS exceptional cost.
Segments
Bhilai, Rourkela and Bokaro were the main operating drivers with segment results of ₹838.38 crore, ₹857.84 crore and ₹844.90 crore respectively, while Salem remained the clearest drag at a ₹66.07 crore loss and Others reported a ₹125.46 crore loss.
Key positives
- Operating margin reached 16.6%, up 531bps YoY, while EBITDA increased to ₹4358.25 crore from approximately ₹2926 crore in Q1FY26.
- Finance costs fell 17.1% YoY to ₹492.98 crore, lifting interest coverage to 4.80x from 2.04x.
- Bhilai, Rourkela and Bokaro generated combined segment results of ₹2541.12 crore, supporting the consolidated operating recovery.
- Receivable days improved to 20 from 24 YoY and debt-equity declined to 0.54x from 0.64x YoY.
Key concerns
- Revenue grew only 1.25% YoY to ₹26245.67 crore and fell 14.8% sequentially, with no disclosed volume or realisation bridge.
- Sub-grade iron-ore fines inventory remains large at 38.09 million tonnes valued at ₹3675.37 crore, including 35.47 million tonnes classified as non-current.
- Salem Steel Plant reported a ₹66.07 crore segment loss versus a ₹64.99 crore loss YoY, while Others reported a ₹125.46 crore loss.
- Gross margin expansion of 641bps coincided with raw-material cost rising to 48.0% of revenue from 41.4% YoY; the filing does not disclose the economic driver of the improvement.
Research and educational content only. Not investment advice.