SAIL Q2 PAT seen up 27.8% at Rs 694 cr: Poll

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26 Aug, 2025 12:21

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State-run Steel Authority of India (SAIL) will announce its second quarter (July-September) results today. According to a CNBC-TV18 poll, analysts on an average expect profit after tax of the steel maker to rise 27.8 percent year-on-year to Rs 694 crore for the quarter.

Net sales are seen going up by 11.9 percent to Rs 11,930 crore in three-month period ended September 2013 from Rs 10,663.2 crore in a year ago period, driven by higher sales volumes.

SAIL recorded 2.2 million tonne of sales in July-August period of FY14, so volumes are expected to increase 19 percent Y-o-Y to 3.1 million tonne, feel analysts.

Realisation is expected to remain flat sequentially (down 5 percent Y-o-Y), aided by steel price hikes in September. Higher shipments are likely on the back of import substitution (due to weak rupee).

Earnings before interest, tax, depreciation and amortisation (EBITDA) may rise 48 percent Y-o-Y to Rs 1,411.7 crore and operating profit margin may expand 290 basis points year-on-year to 11.8 percent in the quarter gone by.
 
Analysts expect lower costs on a per tonne basis due to higher operating leverage on higher sales volume, which boost margin during the quarter. Benefit of lower international coking coal will be offset due to weaker rupee.

They expect lower fixed cost per tonne due to strong volume growth. In a year ago period, fixed cost per tonne was high.
 
Also watch out for forex losses. Analysts expect forex loss on account of 5.4 percent depreciation in the rupee during the quarter.

Other income may fall as more cash will be deployed to support capex, feel analysts.

Exceptional income may be strong during second quarter. As a result of settlement of dispute with Vale, SAIL could receive Rs 1000 crore during the quarter. Delhi High Court's July order that asked Vale Australia (Vale) and AMCI to pay USD 159 million to SAIL. Two companies failed to comply with SAIL’s demand of 1 million tonne of coking coal in 2007.

Negative factors for SAIL are uncompetitive cost structure, execution delays, decline in steel realisation and poor operating efficiencies.