S A I L Q2 FY27 Results (NSE: SAIL)
Signal: Margin expansion
The read
The earnings inflection remains operating rather than dilution-led: Q2FY27 PAT reached ₹1773.73 crore, +315.7% YoY, and EBITDA margin was 14.3%, +378bps YoY, but it fell 206bps QoQ from 16.3% as raw material and inventory costs rose to 52.4% of revenue from 39.5% YoY. The improvement is therefore vulnerable to input-cost volatility, while the ₹72.69 crore quarterly exceptional charge and the H1 ₹216.70 crore VRS charge temper earnings quality.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹31,997.51 Cr | +18.5% | +19.8% |
| Net profit | ₹1,773.73 Cr | +315.7% | |
| EPS | ₹4.29 | +316.5% | |
| EBIT margin | 14.3% |
P&L walk
Revenue increased to ₹31997.51 crore, +18.5% YoY and +19.8% QoQ, while gross margin fell 288bps YoY as material and inventory costs rose to 52.4% of revenue; EBITDA increased 61.2% YoY to ₹4561.04 crore, PAT rose 315.7% to ₹1773.73 crore, and EPS tracked PAT at +316.5%.
Segments
Bhilai was the largest segment contributor at ₹963.71 crore of result on ₹9124.68 crore revenue, while Bokaro rose to ₹849.07 crore from ₹170.58 crore YoY and Rourkela contributed ₹729.80 crore; Salem remained the main drag with a ₹75.04 crore loss.
Key positives
- Revenue increased to ₹31997.51 crore, +18.5% YoY, while EBITDA rose 61.2% YoY to ₹4561.04 crore and EBITDA margin expanded 378bps to 14.3%.
- Bokaro Steel Plant's segment result increased to ₹849.07 crore from ₹170.58 crore YoY, while Rourkela rose to ₹729.80 crore from ₹448.18 crore.
- H1 operating cash flow was ₹8447.69 crore versus ₹7981.50 crore YoY, providing cash support for ₹5446.28 crore of H1 capex outflow.
- Interest coverage improved to 4.98x from 2.55x YoY as operating profit expanded faster than finance costs.
Key concerns
- Gross margin compressed 288bps YoY to 47.6% as material and inventory costs rose to 52.4% of revenue from 39.5%, with the filing not disclosing the cause.
- EBITDA margin declined 206bps QoQ to 14.3% from 16.3%, indicating sequential pressure after the strong Q1FY27 margin.
- Revenue growth of 18.5% YoY cannot be separated into volume and realisation because the filing does not disclose quarterly sales volumes or ASP.
- Salem Steel Plant reported a ₹75.04 crore segment loss, worsening from a ₹66.07 crore loss QoQ, while the Others segment reported a ₹21.83 crore loss.
Research and educational content only. Not investment advice.