SAIL Share Price Down 7% Despite Whopping 820% Jump In Q1 Profit; Time To Buy The Dip, Or Exit The PSU Stock?

SAIL Q1 Result: Shares of Steel Authority of India remained under pressure over the past two trading sessions after the Public Sector Undertaking (PSU) giant announced June quarter results for the financial year 2025-26. SAIL reported a whopping 820% jump in its consolidated net profit in Q1FY26.

Despite the multifold increase in net profit on an annual basis, SAIL's net profit declined on a quarter-on-quarter (QoQ) basis from Rs 1250.98 crores in March quarter of FY25. SAIL shares have declined by nearly 7% in the last two trading sessions. SAIL shares declined 3.87% to conclude at Rs 125.6 per share on BSE on Monday, July 29. The stock had dipped to a intraday low mark of Rs 124.10 per share on BSE on Monday.

SAIL Q1 Result: What Analysts Have To Say?

The sequential decline in SAIL's net profit proved to be a disappointment for analysts. The PSU steelmaker's Q1FY26 net profit, revenue, steel volume growth proved to be below estimates, according to analysts. The sequential decline in performance was the result of inventory valuation, according to Antique Stock Broking.

SAIL's net revenue of Rs 258 billion was lower than Motilal Oswal's expectation of Rs 276 billion, which was primarily driven by a decline in volumes during the quarter.

"Steel Authority of India (SAIL) reported 1QFY26 consolidated EBITDA of Rs 27.68bn, up 25% YoY and down by 21% QoQ, 26% below our estimates, driven by higher YoY volumes. EBITDA/t for the quarter was USD 71/t (+7%/-6% YoY/QoQ). SAIL's 1QFY26 revenue of Rs 259.2bn (+8%/-12% YoY/QoQ), was 2% below our estimate, due to lower realisations than estimated," noted Systematix Institutional Equities.

The New Delhi-based PSU giant's growth outlook is highly dependent on its capacity utilisation and further additions. In the medium term, SAIL's 4.5 mt expansion at IISCO is also likely to conclude in a longer duration of three to four years, according to Systematix.

"We maintain HOLD rating as volume growth prospects remain muted and deleveraging might be impacted due to the large planned capex outlay for capacity expansion," noted Antique Stock Broking in its latest report.

SAIL Stock Price Recommendation, Target Price

Antique Stock Broking gave a 'Hold' rating for SAIL with a reduced target price of Rs 129 per share. "We roll over our estimates to 1HFY28E (from FY27E earlier) and maintain HOLD rating with a revised TP of INR 129 (earlier INR 132) based on a target multiple of 6.0x 1HFY28E EV/EBITDA (earlier 6.3x)," noted the brokerage.

Systematix Institutional Equities also gave a 'Hold' rating for the stock. "We maintain HOLD rating on the stock based on 5.5x FY27E EV/EBITDA and TP of Rs 114/share," noted the brokerage.

SAIL Q1 Result Recap

The giant steelmaker reported a net profit of Rs 744 crore, which was nearly 800% higher than Rs 81.78 crore reported in the year ago period. SAIL's Q1 result was significantly lower than Rs 1250.98 crore reported in the March quarter of financial year 2024-25.

The consolidated income of the company during April-June period rose to Rs 26,083.90 crore compared to Rs 24,174.80 crore in the corresponding quarter of previous fiscal. Total expenses during the quarter rose to Rs 25,189.19 crore from Rs 23,871.60 crore in the year-ago period, the filing said.