SAIL an attractive risk-reward play, says ICICI Direct; sees 33% upside

SAIL share price target: ICICI Direct said that SAIL trades at a lucrative valuation vs peers with a healthy balance sheet. The brokerage has assigned 'Buy' call for a target of ₹200

SAIL share price target: Brokerage firm ICICI Direct has turned bullish on Steel Authority of India Limited (SAIL), citing favourable demand tailwinds, safeguard duty-driven steel prices, and the company's focus on optimisation.

The brokerage has assigned a ‘Buy’ call on SAIL with a target price of ₹200, valuing it at 7x on FY28E EV/Ebitda.

The target price implies a 33 per cent upside from the previous close of ₹150.15 on the National Stock Exchange (NSE).

Strong demand tailwinds

According to ICICI Direct, SAIL is well-positioned to benefit from improving domestic steel demand, capacity expansion plans, and supportive government policies. It said that while India is the world’s second-largest consumer of finished steel, its per capita steel consumption remains relatively low at around 103 kg, compared with the global average of roughly 215 kg. The government has set a target of achieving 300 million tonnes of crude steel capacity and increasing per capita consumption to 160 kg by FY31.

 

This, the brokerage said, is expected to create strong demand tailwinds for domestic steelmakers.

Capacity expansion 

SAIL, one of the largest steel producers in the country with crude steel capacity of about 20 million tonnes per annum (MTPA), is planning significant capacity expansion to cash in on the opportunity.

ICICI Direct noted that SAIL has plans to increase capacity at its IISCO plant from 2.5 MTPA to 7.1 MTPA by FY29, at a capex outlay of ₹36,000 crore. Additionally, SAIL is undertaking brownfield expansions through debottlenecking across its integrated steel plants.

It estimates SAIL's consolidated sales volumes to grow at a CAGR of 6 per cent over FY25-28E, reaching 21.5 MT in FY28E vs 17.9 MT in FY25.

Safeguard duty to support profitability

Further, the brokerage expects that safeguard duty on select steel imports for three years will support profitability and drive healthy gains in Ebitda per tonne.

In the third quarter (Q3 FY26), SAIL had reported around ₹4,500 per tonne of Ebitda, reflecting a decline of only ₹660 per tonne Q-o-Q -- the lowest among domestic steel players. The brokerage expects SAIL’s Ebitda per tonne at around ₹5,400, ₹6,600, and ₹7,500 for FY26, FY27, and FY28E, respectively.

Since the imposition of 12 per cent safeguard duty in December 2025, domestic steel prices have risen sharply by more than ₹5,000 per tonne.

Valuation lucrative vs peers

On the valuations front, ICICI Direct said that SAIL trades at a lucrative valuation vs peers with a healthy balance sheet. SAIL trades at an EV/Ebitda multiple of 6x on FY28E vs >8x for the rest of the major steel producers domestically, which "we believe offers an attractive risk-reward opportunity given the upcycle in the domestic steel space."

SAIL, a Maharatna PSU under the administrative control of the Ministry of Steel, manufactures and sells a broad range of steel products. The PSU operates five integrated steel plants -- Bhilai Steel plant, Durgapur Steel plant, Rourkela Steel plant, Bokaro Steel plant, and IISCO Steel plant.      ====================================

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