SAIL Q2FY26 EBITDA Beats Estimates by 23%; Brokerage Downgrades Stock to ‘Reduce’ Despite Strong Operational Show

Steel Authority of India Ltd (SAIL) reported a stronger-than-expected performance for the July–September quarter (Q2FY26), with EBITDA at ₹25.2 billion, 23 percent above estimates, driven by higher sales volumes, robust by-product sales, and improved operating leverage. 📊 Key Highlights: Sales Volumes: Up 20% YoY and 8% QoQ to 4.9 million tonnes (including 0.3 million tonnes from NMDC Steel). Realisation: Declined ₹2,583/tonne, broadly in line with expectations. By-Product Sales: Jumped 31% QoQ to ₹11.4 billion, with 20–25% contribution flowing into EBITDA. Cost Efficiency: Benefit from operating leverage as employee and other expenses fell 7% QoQ per tonne. Net Debt: Declined ₹23 billion sequentially to ₹264 billion, reflecting improved cash flow management. Despite the strong quarter, analysts noted that volume growth may moderate going forward, as the company is already operating at near-optimum capacity levels. 💼 Outlook and Valuation: The brokerage rolled forward its valuation to FY28E, maintaining its target price at ₹120 (valued at 6x FY28E EV/EBITDA). However, it downgraded the stock to ‘REDUCE’ from ‘Hold’, citing limited upside potential and capacity constraints. Hashtags: #SAIL #Q2Results #SteelSector #EBITDA #EarningsBeat #MetalStocks #StockMarketIndia #IndianMetals #SteelAuthorityOfIndia #BrokerageUpdate