Steel Authority of India Ltd

- SAIL is currently reducing borrowings, targeting a debt-equity ratio of around 0.3 to 0.4 by year-end (currently ~0.46 non-IndAS basis). - Borrowing reduction momentum is expected to continue through Q3 and Q4 of FY25-26. - From next year onwards, borrowings are expected to increase to fund CAPEX, especially for de-bottlenecking and expansion projects like IISCO. - CAPEX is set to rise significantly, with FY25-26 target > Rs.7,500 crores and FY26-27 expected to exceed Rs.10,000 crores. - Funding strategy is planned to be roughly 50% debt and 50% internal accruals. - No mention of new equity fundraising in the disclosed sections. - The company is creating headroom to accommodate future borrowings for expansion over next 4-5 years.

- Major CAPEX planned for IISCO expansion: 4.5 million tons capacity increase at a cost of around Rs.36,000 crores. - Most major packages for IISCO expansion have been tendered and finalized; order placements underway, with physical work starting in FY26-27. - Other ongoing CAPEX includes de-bottlenecking projects at Durgapur, IISCO, Bhilai, and Rourkela Steel Plant (RSP). - FY25 CAPEX target exceeded Rs.7,500 crores, expected to exceed Rs.10,000 crores from FY26-27 onward, with further increases in subsequent years. - Expansion and de-bottlenecking projects to drive over 5-7% volume growth in FY26-27. - Debt-equity ratio targeted for reduction to 0.3-0.4 by year-end, maintaining 50:50 funding mix of debt and internal accrual for CAPEX. - Overall, CAPEX focus on capacity expansion, efficiency improvement, and debottlenecking for sustained growth.

- For FY26-27, SAIL expects production and sales volume growth of 5% to 7% compared to FY25-26, driven by debottlenecking projects across plants including IISCO, Bhilai, Rourkela, and Durgapur. - In Q3 and Q4 of FY25, an increase in production is expected with sales volumes rising even more to reduce steel inventory. - Over FY26-27, a significant reduction (about 50%) in sellable steel inventory is targeted, alongside production volume increases. - Long-term capacity expansion primarily includes 4.5 million tons expansion at IISCO (~Rs.36,000 crores CAPEX) and various debottlenecking projects at multiple plants, with CAPEX expected to exceed Rs.10,000 crores from FY26-27 onwards. - Increased sales of scrap and by-products are anticipated, adding to realization improvements. - Overall, domestic steel demand is expected to recover and grow, supporting volume and revenue growth.

- EBITDA margin expected to improve in Q3 and significantly in Q4, potentially reaching 14-15% due to completion of capital repairs and increased production (Page 19). - Production growth targeted at 5-7% in FY27, driven by de-bottlenecking projects and capacity expansions, especially at IISCO (Pages 14, 17). - Cost control measures and improved efficiency expected to enhance margins in the balance period of the year (Page 19). - Reduction in borrowings and interest burden supports profitability; debt-equity ratio aimed to reduce to 0.3-0.4 by year-end before CAPEX push (Page 15). - Sales volumes expected to grow in FY26-27, with focus on reducing inventory and increasing sales more than production (Page 7). - Capital expenditure to increase significantly from FY26, boosting capacity and long-term earnings (Page 14). - Positive impact expected from higher realizations from by-products and scrap sales flowing through EBITDA and PBT (Pages 14,16).

- For IISCO expansion (4.5 million tons capacity increase at Rs. 36,000 crores): - Major packages already tendered and mostly finalized. - Some orders have been placed; remaining major packages’ orders to be completed in 1-2 months. - Design engineering and physical work to start post order placement. - Significant CAPEX payments expected in FY26-27. - Other projects: - De-bottlenecking efforts ongoing at Durgapur, IISCO, Bhilai, Rourkela Steel Plant (RSP). - Orders placed for Durgapur Rebar mill last year; ground activities ongoing. - Blast furnace orders at Durgapur being finalized. - Tendering in progress and some orders placed across plants with work started. - Overall, order placements are on track for expansion and de-bottlenecking projects.