SAIL gains 4%, hits 15-month high; what's driving the PSU's stock price?

SAIL's management remains hopeful of a demand recovery in the later part of Q3 and Q4 of FY26

Steel Authority of India (SAIL) share price today

 

Steel Authority of India (SAIL) share price hit a 15-month high of ₹145.85 on the BSE today, gaining 4 per cent in Monday's intraday trade.

 

The stock price of the public sector undertaking (PSU) company was quoting at its highest level since August 2024. In the past two weeks, the market price of steel the company has appreciated 12 per cent. Moreover, SAIL shares have outperformed the market thus far in calendar year 2025 by surging 29 per cent. In comparison, the BSE Sensex and the BSE Metal index have rallied 6.7 per cent and 20.5 per cent, respectively, during the period.

What's driving the PSU company's stock price?

SAIL's management, during the September quarter (Q2FY26) earnings conference call, said that they remain hopeful of a demand recovery in the later part of Q3 and Q4 of FY26, aided by a pick up in the Indian economic growth. Ths should provide a relief to the company on the price front. "The challenges continue on the pricing front as of now with the global trends not very good. But, in India, we are expecting that it will improve in the later part of Q3 as well as Q4"” SAIL said.

 

Going forward, as the monsoon season and the festivities are over, the management hopes that the market could see an uptick in demand, which will be supported by a robust production. Higher demand will ease the pricing pressure, it said.

 

"Though coal prices have been range-bound, the depletion in rupee with respect to the US dollar has impacted the company's bottom line. That said, the index of coal price has remained range-bound. So, the margins are likely to improve going forward," the management said.  ALSO READ | 3 technical reasons why Nifty Smallcap is down today; may dip 5%

Brokerages on SAIL

 

Analysts at InCred Equities have upgraded SAIL's stock rating to 'Add' (from 'Reduce') with a revised share price target of ₹158.

 

Although the brokerage firm said it continues to believe that the global steel industry lacks structural pricing power, the current wave of protectionism across key markets - especially in India, Europe, and the US - has removed the downside risk to earnings.

 

Steel prices, it said, are unlikely to fall meaningfully and the modest recovery in global demand, led by Europe, should support a stable pricing environment. In this setting, SAIL stands out as a tactical play on a protectionist stability rather than a cyclical upswing.

 

Analysts at the brokerage estimate SAIL's Ebitda per tonne to remain steady at ₹7,000–8,000 over FY24–26F with EPS growing around 8 per cent annually. "Given its strong balance sheet, declining leverage, and policy-driven insulation, SAIL offers limited downside and a visible near-term upside," it said.

 

Analysts at Nuvama Institutional Equities, meanwhile, expect steel prices to recover in December 2025 with an uptick in steel demand.  ALSO READ | HAL shares rise 3% on inking agreement with General Electric; check details 

Besides, with the capex picking up in FY27, the brokerage firm expects SAIL's net debt/Ebitda to stay 2.2–2.5x over FY26–28E.

 

"After the recent run-up, however, the stock has less room for further upside. We, thus, maintain 'Hold' rating on the stock," it said. Notably, SAIL is trading above the brokerage firm's target price of ₹141 per share.

 

Those at Motilal Oswal Financial Services added: SAIL expects improved operational performance in H2FY26, supported by higher volumes, efficiency gains, inventory liquidation, and stable raw material costs. We increased FY26 Revenue/Ebitda, and adjusted PAT estimates by 3 per cent/18 per cent, and 13 per cent to incorporate the Q2 performance beat. We largely maintain our FY27 estimates.

 

"SAIL plans to increase its capacity to 35mtpa. It is currently in the initial tendering phase, with any notable development likely to be visible only after FY27. Considering the limited room for production, we estimate a modest volume CAGR of 6 per cent over FY26-28E. Therefore, any incremental earnings will be driven by healthy pricing and lower costs," the brokerage firm said while reiterating its 'Neutral' rating on the stock with a target price of ₹150 (premised on 6.5x EV/EBITDA on Sep’27 estimate).