Shares of Steel Authority of India (SAIL) witnessed a volatile trading session on Monday after the company reported a sharp rise in March quarter earnings, while brokerages remained divided on the sustainability of steel spreads and volume growth outlook.

The stock declined nearly 2 per cent to ₹188.21 in early trade before rebounding to an intraday high of ₹193.99 against the previous close of ₹192.40. The stock later traded at ₹190.02 on the NSE at 10.57 am.

SAIL on Friday reported a 42 per cent y-o-y rise in standalone net profit to ₹1,680 crore for the March quarter of FY26, supported by higher revenues and improved steel realisations.

Brokerages split

Investec maintained a buy rating on the stock with a target price of ₹270, citing a strong operational performance in the fourth quarter. The brokerage said EBITDA beat estimates by 19 per cent due to improved spreads. While the Street remains concerned that pricing and spreads may have peaked, Investec expects ₹2,200 per tonne q-o-q spread expansion in Q1FY27 and sees further upside potential. It added that management’s guidance of 16 per cent volume growth to 22 million tonnes for FY27 is likely to be achieved by FY28.

The brokerage also highlighted the company’s focus on operational efficiencies and growth capex, calling SAIL the best proxy to capture gains from domestic steel tariff-led price and spread improvement.

Morgan Stanley maintained an underweight rating with a target price of ₹140. The brokerage said adjusted EBITDA came in lower than its estimates but ahead of consensus expectations. It noted that volumes and realisations were weaker than expected, partially offset by lower costs. Morgan Stanley expects margin expansion in Q1FY27 due to higher steel prices but said the FY27 volume guidance of 22 million tonnes appears optimistic.

Citi retained a sell rating on the stock and raised its target price to ₹180. The brokerage said fourth-quarter EBITDA rose around 53 per cent y-o-y, largely driven by 8 per cent higher realisations, while volumes remained largely flat and costs increased about 2 per cent. Adjusted EBITDA per tonne stood at ₹8,280 compared to ₹4,465 in the December quarter and ₹5,405 a year ago.

Citi said q-o-q EBITDA per tonne gains were led by a ₹4,750 per tonne increase in realisations, partly offset by nearly ₹935 per tonne rise in costs. The brokerage highlighted management commentary indicating FY27 volume growth guidance of around 13 per cent, with weaker demand trends expected in the first half and recovery later in the year.

It also noted that spot steel realisations are currently ₹4,500-5,000 per tonne higher compared to the fourth quarter and management expects prices to sustain. However, Citi flagged concerns around rising coking coal costs, upcoming wage revision pressures and increasing capex commitments. The brokerage added that SAIL’s next phase of capacity expansion is still about three years away and higher debt levels could limit upside to EBITDA per tonne.

Published on May 18, 2026