SAIL Q4 Result Preview: PSU Giant’s Sales Volume To Recover, Revenue To Decline In March Quarter; What To Expe

SAIL Q4 Preview: Positive operative leverage impact and lower coking coal cost are likely to help Steel Authority of India (SAIL) to improve its volume growth and EBITDA margins, as indicated by analysts in their preview of the company's March quarterly result.

The PSU steel maker will witness a volume growth of 6% year on year (YoY) and improve by 7% quarter on quarter (QoQ). Adjusted EBITDA is likely to increase on a sequential basis.

SAIL shares closed at Rs 128 per share on BSE on Tuesday and were trading in red during the pre-market opening session today. As stock market investors will be keenly waiting for SAIL Q4 Result Today, let's understand what analysts are saying about the PSU steel maker.

SAIL Profitability, Revenue in Q4

Company's sales volume are likely to recover by 9% yearly and revenue will improve by 7% sequentially in the March quarter, noted Axis Securities in its Q4 result preview earlier.

"We expect revenue to decrease by 6% YoY and improve by 7% QoQ, driven by HRC prices trajectory (down 11%/1% YoY/QoQ). We expect Adj. EBITDA (excluding railway provisions) to increase by 73%/35% YoY/QoQ primarily due to lower coking coal costs, aided by operating leverage on higher sales volumes, which offsets the drop in steel price realisation," noted Axis Securities.

Underlining the impact of positive operative leverage and lower coking coal cost, ICICI Securities, stated, "Expect volume growth of 6% YoY. EBITDA/te expansion led by positive operative leverage impact and lower coking coal cost. Expect debt to trend lower QoQ due to working capital unlocking. Any incremental benefit from rail price revision is not factored in our estimates."

Steel and metal companies are expected to register an upward trend in the earnings before interest, taxes, depreciation, and amortization (EBITDA) for the steel sector, specifically for companies like Tata Steel and SAIL, according to Axis Securities. This expected surge is largely attributed to an increase in sales volume and a reduction in the costs associated with coking consumption. However, this positive shift might be slightly tempered by a reduction in steel price realizations.

The average benchmark for Hot Rolled Coil (HRC) prices witnessed a decline in the Q4FY25, dropping by 11% year-on-year and 1% quarter-on-quarter. Despite this downturn, a rebound in prices was observed towards the end of the quarter. It's anticipated that the EBITDA for Tata Steel and SAIL will see a quarter-on-quarter rise of 6% and 35%, respectively. Nevertheless, the EBITDA recovery for Tata Steel could be dampened due to diminished realizations from its European operations.