SAIL signs MoU with BCCL for two coal blocks

Steel Authority of India Limited signed an MoU with Bharat Coking Coal Limited to jointly develop two coking coal blocks in West Bengal. The agreement covers SAIL’s Indikatta Ramnagore Coal Block and BCCL’s East of Damagoria, or Kalyaneshwari, Coal Block. The move is aimed at increasing domestic coking coal availability and improving raw-material security for the steel business. For Steel Authority of India Limited, the development comes after a strong Q1FY27. Consolidated net profit more than doubled to ₹1,644.05 crore from ₹744.58 crore in Q1FY26. Total income increased to ₹26,451.21 crore, while expenses declined to ₹24,146.32 crore. However, crude steel output fell to 4.76 MT from 4.85 MT, and sales declined to 4.16 MT from 4.55 MT. My view is that the coal-block agreement is positive for SAIL’s medium-term cost and supply security, but it is unlikely to have a material earnings impact immediately. The bigger near-term variables remain steel volumes, realisations and raw-material costs. The decline in Q1 production and sales also needs to be monitored before assuming that the profit growth can continue at the same pace. Shares of Steel Authority of India Limited closed at ₹184.80 on September 25, up 0.43%. I would watch ₹185 to ₹190 for sustained strength, while ₹175 remains an important downside level. Improvement in steel sales, along with visible progress on the coal blocks, would be the next triggers. My stance is neutral to positive above ₹185, with ₹175 as the key risk level.

Disclosure: I am a SEBI Registered Research Analyst. This post is for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any security.