Shares of Steel Authority of India (SAIL) surged 5 per cent in early trade on Tuesday after the state-owned steelmaker reported a strong Q3FY26 results.
The stock surged as much as 5 per cent to ₹156.05 before settling at ₹154.36 on the NSEup from the previous close of ₹148.67.
SAIL posted a standalone net profit of ₹441.70 crore for the quarter ended December 2025, sharply higher than ₹125.80 crore in the year-ago period. Revenue from operations rose 12 per cent year on year to ₹27,371.39 crore in Q3FY26 compared with ₹24,489.63 crore in Q3FY25.
Brokerages said the rally was driven by improving volume momentum and expectations of better realizations in the coming quarters, although views diverged on valuation and balance-sheet risks.
Motilal Oswal said that despite muted net sales realisation, SAIL delivered decent earnings in the quarter, aided by healthy volumes.
The brokerage expects performance to improve further in the March quarter on the back of recovering steel prices and better volumes supported by inventory liquidation.
It raised its FY27 EBITDA estimates by 2 per cent, citing improving prices and operating leverage, and upgraded the stock to buy with a target price of ₹175.
Emkay Global also struck an optimistic tone, saying Q4 upside strengthens the investment case.
It expects the market to respond favorably to the Q3 results, particularly after cumulative post-quarter price hikes of ₹4,000–5,000 per tonne, which could lift EBITDA to around ₹7,000 per tonne in the March quarter.
While higher coking coal costs may cap some of the benefit, Emkay reiterated buy rating and ₹175 target price, calling SAIL one of its key picks in the ferrous space.
HDFC Securities, however, remained more measured and maintained its add rating with an unchanged target price of ₹150.
The brokerage pointed out that while total and own sales volumes rose 16 per cent and 5 per cent year on year, weak pricing in flat steel weighed on margins, pulling down EBITDA per tonne to ₹4,500 sequentially and compressing it slightly on a year-on-year basis.
HDFC expects SAIL to deliver steady growth over FY25–28, aided by a recovery in steel prices and higher production from ramp-ups.
Nuvama Institutional Equities adopted a cautious stance despite stronger-than-expected operating profit in the quarter. It noted that adjusted EBITDA of ₹22.9 billion beat estimates, supported by higher volumes that partly offset softer prices, while net debt declined sequentially to ₹248.5 billion.
However, the brokerage flagged that ongoing expansion plans could keep leverage elevated over the medium term. Although it raised its earnings assumptions to factor in higher prices and volumes, Nuvama maintained a reduce rating while lifting its target price to ₹111. Meanwhile, Kotak Securities maintained sell call at a target price of ₹105.
With steel prices showing signs of recovery and volumes improving, SAIL’s quarterly performance has sparked renewed investor interest, even as analysts remain divided over the sustainability of margins and the impact of future capital expenditure on the balance sheet.
Published on February 3, 2026