Steel Authority of India Limited (SAIL): Comprehensive Stock Analysis reports | Scrolls
- Editor
- Aug 14
- 3 min read
by KarNivesh | 14 August, 2025
Steel Authority of India Limited (SAIL) is not just another name in India’s industrial landscape—it’s one of the country’s largest government-owned steel producers and a Maharatna public sector enterprise. Operating five integrated steel plants and three special steel plants, SAIL currently boasts a crude steel capacity of 19.5 million tonnes per annum.
With a market capitalization of ₹51,239 crores and a stock price of ₹124.05 (August 2024), SAIL remains a key player in India’s steel story. Government backing—holding 65% ownership—ensures stability, while its ambitious target of 35 million tonnes by 2030 signals aggressive growth plans.
Business Model and Operations
SAIL runs an integrated steel production model—from mining iron ore to manufacturing finished steel products. Its plants are strategically placed in eastern and central India, close to raw material sources. Key integrated facilities are in Bhilai, Rourkela, Durgapur, Bokaro, and Burnpur, with specialized units at Salem, Durgapur, and Bhadravathi.
The company also ranks as India’s third-largest iron ore producer, with 15 mines spread across Jharkhand, Odisha, and Chhattisgarh.
Expansion and Modernization
SAIL has secured approvals for a ₹1,00,000 crore expansion plan to boost capacity by 75% to 35 MTPA by 2030. Notable projects include:
IISCO Steel Plant expansion to 4 MTPA, catering to high-grade hot-rolled coil and API-grade steel for oil, gas, and automotive sectors.
FY26 capex of ₹7,500 crore, up 25% from the previous year.
Green Steel Leadership
In a move towards sustainability, SAIL has started trials with biochar technology at its Rourkela and Durgapur plants, aiming to cut CO₂ emissions to 2 tons per ton of steel by 2030 (down from 2.5–3 tons). The company has already achieved a 20% reduction in emissions and plans to further invest in low-carbon technologies.
Financial Performance
SAIL’s numbers reflect the steel sector’s cyclical nature.
Revenue (FY25): ₹102,479 crores (TTM: ₹104,403 crores)
EBITDA: ₹11,764 crores
Net Profit: ₹2,148 crores
EPS: ₹5.74 (TTM: ₹7.34)
ROE: 4.03%
ROCE: 6.72%
Debt-to-Equity: 0.63
Profitability peaked in FY22 at ₹12,243 crores but has since moderated. The balance sheet remains healthy, with debt-to-EBITDA at 2–2.5x. Dividend payout has been stable at around 27–28%.
Ownership Structure
Government of India: 65%
Domestic Institutional Investors: 17.3%
Foreign Institutional Investors: 3.65%
Retail & Others: 14.04%
LIC holds a significant 9.6% stake, making it the largest institutional shareholder.
Valuation and Peer Comparison
P/E Ratio: 16.88 (vs. industry average 25–30)
P/B Ratio: 0.87 (13% discount to book value)
EV/EBITDA: ~4.3x
Dividend Yield: 1.29%
Compared to peers:
JSW Steel: Higher returns (ROE 11.8%) but trades at P/E of 33.3
Tata Steel: Similar P/B (0.90) but higher dividend yield (2.1%)
India’s steel demand is set to grow 8–9% in 2025, far outpacing global growth. Projections see consumption reaching 240–260 MTPA by 2035. The National Steel Policy 2017 targets 300 MTPA by 2030–31, positioning SAIL as a key contributor.
Recent policy boosts include:
PLI Scheme: ₹29,500 crore for specialty steel
DMI&SP Policy: Prioritizing ‘Made in India’ steel
Safeguard Duties: 12% on imports (possible increase to 24%), already reducing imports by 20%
Risks
High financing costs for expansion
Logistics bottlenecks, adding USD 20–25 per tonne disadvantage
Import competition despite duties
Cyclical demand impacting profitability
Environmental compliance costs
Investment View
Strengths:
Strong government backing
Attractive valuation (P/B 0.87)
Massive ₹1 lakh crore expansion pipeline
Leadership in green steel
Concerns:
Lower profitability than peers
High debt during expansion phase
Execution risks on large projects
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