S A I L Q1 FY27 Results (NSE: SAIL)
Signal: Margin pressure
The read
Q1FY27 results show modest revenue growth (+2.6% YoY) with EBITDA margin contracting 170bps YoY on raw material cost pressure (RM-to-sales +110bps). PAT grew 17.7% YoY but was boosted by a lower tax rate; absent tax benefit, PAT growth would have been ~11%. The sequential decline in revenue and margin from Q4FY26's strong quarter suggests steel pricing weakness continuing into Q1FY27.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹25,348.9 Cr | 2.6% | -5.6% |
| EBIT | ₹1,043.8 Cr | 19.4% | |
| Net profit | ₹593.8 Cr | 17.7% | |
| EPS | ₹1.44 | 18.0% | |
| EBIT margin | 11.0% |
P&L walk
Revenue grew modestly (+2.6% YoY) but EBITDA margin compressed 170bps YoY to ~11.0% as raw material costs rose to 46.6% of revenue (+110bps YoY). Operating leverage was partially offsetting — employee cost grew only 3.9% against revenue growth of 2.6%, but the margin benefit was consumed by higher input costs. PAT increased 17.7% YoY aided by exceptional items reversal? Actually exceptional items were a loss this year (₹1,200 million) and last year (₹800 million) — so the PAT growth came from higher operating profit and lower effective tax rate? Tax rate: 35.7% vs 36.5% — marginal improvement. EPS tracked PAT.
Segments
No segment data disclosed; filing shows single-segment integrated steel operations.
Key positives
- Revenue grew +2.6% YoY to ₹2,53,489 million, ending two quarters of YoY decline.
- PAT grew +17.7% YoY to ₹5,938 million, with EPS of ₹1.44 (+18.0% YoY).
- Employee cost grew only +3.9% YoY, slower than revenue growth — providing partial operating leverage.
- Depreciation growth (+4.7% YoY) aligned with asset base, no red flag.
Key concerns
- EBITDA margin contracted 170bps YoY to ~11.0%, driven by raw material cost rising to 46.6% of revenue (+110bps YoY).
- Revenue declined 5.6% QoQ from Q4FY26, indicating potential softening in steel demand or pricing.
- Exceptional loss of ₹1,200 million weighed on pre-tax profit; prior year had ₹800 million exceptional loss.
- Finance costs remain elevated at ₹8,901 million, consuming ~3.5% of revenue.
Research and educational content only. Not investment advice.