Ladies and gentlemen, good day and welcome to Steel Authority of India Limited Q2 FY 2026 Post Results Conference Call hosted by Nuvama Institutional Equities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Kejriwal. Thank you. Over to you, Mr. Kejriwal.
Thank you, Ranju.
Good morning everyone. On behalf of Nuvama Institutional Equities, we again welcome you all for Q2 FY 2026 hosted phone call of Steel Authority of India Limited. We are pleased to host Dr. Ashok Kumar Panda, Director of Finance, along with his team for this call. Now I would request Dr. Panda to have an opening remark and then we can open the floor for questions.
Over to you, sir.
Thank you very much. Very good morning everyone. I welcome all our investors and analysts who are joining this results. Concur for the financial results for Steel Authority of India Limited for the period Q2 and H1 2025-2026. Before we move to Q and A session, let me brief you on the results for the pay year. We start with economic scenario, global scenario, intense steel scenario and performance of SAIL in brief. In the economic scenario front, beginning with global economic scenario, the uncertainties and volatilities stemmed from the tariff war. This continues to impact the demand supply situation globally as well as it has got an impact in the domestic market as well. The projections for GDP have improved in line with the same for economies individually as well as regionally and it has improved the global averages.
The IMF had improved its projections for global GDP growth rate to 3.2% in 2025 and 3.1% in 2026. The projections for India have also been revised upwards to 6.3% by various agencies. In the global steel industry front, the global steel industry is weighed down on the adverse demand supply situation as some of the largest producers are finding demand lowering in their own geographies. The landscape is influenced by economic trends, trade policies and technological advancements. While certain regions may benefit from protective trade measures, the overall impact is complex with potential for increased cost, market volatility and shift in global trade dynamics. Right now, that is global steel scenario and looking at the Indian steel scenario, Indian steel industry continues to enjoy robust demand for steel with the consumption during H1 2025-2026 which has grown by more than 8% over the same period last year.
This was however sort of overshadowed by the growth in production as crude steel production grew by more than 12% in this H1 over same period last year. During the same period imports have come down substantially whereas the exports have recorded increase. Yet even then India remains a net importer. During H1 2025-2026 there is a reversal in trend of import versus exports in this H1 compared to last year. During this time the imports have come down and exports have gone up. Exports have gone up because during H1 the production was more than that of the demand in the domestic market. That is the reason why there was a bit of oversupply situation in the country due to which the exports have gone up. Maybe because of this safeguard due to other things the imports have come down drastically. That has given some kind of a relief.
Because of the oversupply situation in Asia, the pressure was on the price front. We hope that in quarter two, later during the later part of quarter three and quarter four, the demand, the economy will pick up, Indian economy will pick up and demand will increase and this will then give a relief to the price front. The challenges continue on the pricing front. As of now, with the global trends not very good, in India we are expecting that it will improve in later part of quarter three as well as quarter four. Coming to the performance of Steel Authority of India Limited as a company for quarter two and H1 FY 2025-2026, the crude steel production steady at 9.5 million tonnes as against 9.46 million tonnes during last year.
H1 the sales volume is at 9.46 million tonnes which grew by around 17% from 8.11 million tonnes during H1 last year. There is a huge increase in the sales volume during this period of H1 so far as SAIL is concerned. That has resulted in reduction in the borrowings as well. During H1 we have reduced more than INR 3,000 crore of borrowings. That is where the interest burden has come down significantly. Revenue from operations at INR 52,625 crore in this H1 grew by 8% as against INR 48,672 crore during the same period last year. EBITDA margin stood at INR 5,754 crore with a growth of around 3% over the same period last year. Profit before tax at INR 1,443 crore increased by 28% and profit after tax at INR 1,112 crore increased by 32% over the same period last year.
Debt reduction drive continues as borrowings on 30th September came down by INR 3,384 crore as compared to the similar period last year. Going forward, as the monsoon season is over and festivities are over, we hope that the market is going to have an uptick in terms of its demand as well as the production will be robust, demand will increase. Pressure on the pricing front may ease out and prices may improve. That is the expectation as the coal prices continue to remain range bound. However, because of the depreciation of rupee with respect to US dollar there is some impact on the bottom line. In terms of index of coal price that is almost kind of range bound. The margins are likely to improve going forward. That is our expectation. With these few words I hand it over to Mr.
Kejriwal for opening the Q and A session please. Is that okay?
Yeah.
Ranger, please open the floor for Q and A.
All right, thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. The first question comes from the line of Amit Lahoti with Emkay. Please go ahead.
Thanks for the opportunity.
My first question is on capacity expansion and CapEx. Currently we are generating around INR 8,000 in our capacity expansion plan. What is the development of its capacity and RLB meant for?
Can you please repeat the question? Actually it is not very audible. Very much audible.
Yeah.
Mr. Lahotia, this is the operator. We have lost the line of Lahotia. We'll promote the next. That is Rahul Gupta. Please go ahead.
Yeah, hi. Thanks for taking my question. A few questions. First, any specific reason why realization trends have been better than what we have seen with steel pricing trend during the quarter? Has inventory liquidation had any impact on this? Any color on this would be very helpful. That's my first question.
Yeah, the answer to this question would be actually even if the sales price has come down in quarter two, but we can find that the realizations have gone up primarily because of more sales. As we can understand, the sales growth has been there for SAIL H1 over H1, it is around 16% growth. That is primarily the reason. As you correctly said, this has resulted in a reduction in inventory to some extent, but the production was also good, and at the same time, this has resulted in reduction in the borrowings greatly.
What I am asking is that the decline in steel prices in 2Q versus 1Q was much higher than what your steel realization has reflected into the numbers. Is there any specific reason for that?
Yeah, the reason for that between Q2 and Q1 is that actually the sales volume of byproducts and the scrap items has increased a lot in Q2. We have made a lot of sales of that, and we have reduced the inventory of byproduct as well as scrap items. That's the reason why overall realized in quarter two.
What is the inventory for finished steel now? I remember it was around 1.8 million till last quarter.
Just 1 sec, just 1 sec. Yeah. Finished steel inventory is 1.9 million tonnes as on 30th September. The important thing is that the in process stock has come down from 1.3 million tonnes to 0.7 million tonnes. There's quite a bit of lot of reduction in process stocks. If you talk about the total steel inventory, between opening and closing, the opening was 2.72 in this year and closing is 2.69 million tonnes.
Got it. One final question for me is any update on iron? I remember you had got approval for sales. By when can we expect you liquidating your massive iron ore inventory that you have?
Yeah, let me give you the perspective in this respect. Actually, 2, 3 points on this one is we've been selling from Odisha group of mines, that is from Bolani, continuously. If I remember correctly, they've sold around 0.3 million tonnes. I don't have the figure right now, but it is around that. That is going on against the target set by us. So far as Chhattisgarh group of mines is concerned, we don't have much quantity to sell as of now. Going forward, the new mines is getting opened up, which is Rawgat. Once the production picks up over there, we can think about it. Now, coming to Jharkhand mines, a group of mines regarding the dump iron ore fines, which is having stock of around 33 million tonnes. There are two things happening. One is we are dispatching, and the dispatch quantity has gone up significantly.
We are dispatching this quantity to various sister plants. Like in a month, we are dispatching around 60,000- 70,000 tonnes, which is at the rate of around 0.7- 0.8 million tonnes per annum. We have increased the dispatches from that dump iron ore fines to various sister units. That is number one. Number two, recently we have put up an auction for 1 million tonnes of dump fines. We are looking forward to participation from the prospective customers in that respect. Yeah, that's the answer.
Thank you so much.
Thank you. Next question comes from the line of Parthiv Jhonsa with Anand Rathi. Please go ahead.
Hi, good morning sir.
Thank you for the opportunity. My first question is pertaining to the sales of steel. We have seen a very good number in H1 and also in Q2. Considering the overall market, is it possible to quantify what is your guidance for FY 2026 and 2027 considering not a major capacity expansion from ISCO expansion is expected in the next two to three years and only debottlenecking kind of a capacity expansion is expected. Can you give some guidance of Q3, FY 2026 and 2027 as far as your sales volume is concerned?
Yeah, let me try to answer this question just one sec. As you said correctly, actually FY 2026 and FY 2027 will have debottlenecking efforts which are going on. Because of that, the production volumes as well as sales volume will increase. We've been making a lot of strategy to increase the sales both on the domestic front as well as on the export front to some extent. As you can see in H1 we have tried to reduce our inventory volumes of steel in totality and thereby the reduction in borrowings. Going forward in Q 3 and Q 4, let me talk about Q 3, Q 4, then FY2026 and FY2027, Q 3 and Q 4, we are looking at reduction in the saleable steel inventory by increasing the sales volumes more than that of the production volumes.
That means in Q 3, Q 4, our production volume is going to increase. Also at the same time, increase in sales volume should be more than that of the production value so that the overall inventory can come down. Now coming to FY 2026 and FY 2027. In FY 2026 and FY 2027 we'll have still a good target as compared to FY 2025 and FY 2026. Regarding our production, because we have debottlenecking efforts which are going on at various steel plants. Certain things we have already done in IISCO Steel Plant and we're going to take up at Rourkela Steel Plant. If the market picks up, then we will start one kind of furnace, old furnace and start increasing our volumes as well. That is the kind of effort. That is why in FY 2026 and FY 2027 the volumes will be more than that of FY 2025 and FY 2026.
Because we have got inventory of saleable steel that will also be liquidated to a greater extent, at least by 50% during FY 2026 and FY 2027 and onto that the production volumes. This sales volume growth will also be there in FY 2026 and FY 2027 as compared to FY 2025 and FY 2026. That is our expectation and also our efforts are towards that as well as we understand that the steel economy in domestic market is improving. Our economy also supports that.
That's actually quite helpful, sir. My second question is pertaining to your borrowings. We have seen the borrowings going down substantially in Q2, right? Do you expect this momentum to continue at least for the next two to three quarters before the ISCO expansion CapEx kicks in, or do you expect this to increase, say, in 2026 or by the end of 2026 and 2027?
No, don't expect this to increase because in 2025-26 we are trying to reduce the borrowings to the extent possible, reduce our debt-equity ratio to the extent possible so that we keep a room for expansion to accommodate ISCO expansion. The CapEx of that will start picking up from 2026-27. You are correct, we have a target to reduce our borrowings further. The momentum of reduction in borrowings will continue in quarter end quarter for this year as well.
Sure.
I may just use a quick question, can you give us some guidance on the coal cost.
Q3 or Q2? What are you talking about?
Q3,
I mean Q3 actually, as you can see. Right, I'll just give a landed cost coal price. Just one second, give me. As we can see, in October the imported coal price in our plant units is around INR 17,300, which has gone up from the August level of INR 16,600. That means between August and October there is an increase of around INR 700. This is primarily because of depreciation of rupee with respect to USD. Now, in this month by October end, we are finding that the indices have increased a bit. Of course, the indices are range bound, but it has increased from the September level of 187- 194. Right now, it may soften, we do not know about that, but it is varying between 185- 195 in that range.
Right now, the index is a little on the highest at 194. As you said, what about quarter three and quarter four? In quarter three and quarter four, the demand is going to pick up everywhere. We believe the imported coal price will remain a little higher as compared to what it is today. It is around INR 17,400. It may go towards INR 18,000, INR 18,001 and something like that in quarter three. I expect quarter four, we'll see how it continues.
Should we expect around $6- $8 kind of an increase in coal cost?
That's what it is. Because from 180 it has gone to 194. I believe it will remain there or it is more around that.
So. Thank you for the answer, sir. Thank you so much and best of luck.
Thank you.
Thank you. Next question comes from the line of Rajesh Ravi with HDFC Securities. Please go ahead. Yeah.
Hi sir, am I audible?
Yeah, audible.
Okay. My first question is, can you share what is the NMDC volume contribution and revenue contribution in this quarter, and your 18.5 million ton or volume that remains intact for FY 2026?
Just one sec. Let me look at the figures. Amount is of R. This is for quarter. Quarter two, volume is 3 lakh tons, almost a lakh every month, and amount to INR 1,500 crore.
Sorry, INR 1,500 crore?
Yeah, it is 300,000 and INR 15 billion.
Okay. This 18.5 which you had guided, that remains intact for FY 2026.
Yeah, that remains in that.
Okay.
You mentioned that because of highest scrap prices and all this time in Q2, your net realization appears to be better off compared to the normal steel price decline. Maybe in Q3 we will have that impact getting reversed.
Pardon?
In Q3, with graph sales normalizing or lower scrap sales, and given that steel prices are further weakened, you would be looking at a higher decline than the normal steel price decline.
Let me explain to you. Actually, even if there are pressures on the price front right now, I believe from November middle or end of November, things should improve and prices would improve. When we talk about last year, this time also from December onwards there was improvement in the prices. December and entire quarter four remained under improvement. That is going to improve, number one. Number two, so far as sales of byproducts and scrap and defectives are concerned, we are having our efforts towards that. We will continue to have our momentum towards liquidating those stocks through auction, frequent auctions and all that. That is happening in all the steel plants as well as in stockyards. We are going very aggressive on that. On that front, materialization will be quite good as well during quarter three and quarter four.
Okay.
Okay.
Any outlook on the, you know, on the first side? You mentioned that protein coal prices will be higher by $6- $7 in this quarter.
It looks like.
It looks like, okay. In terms of overall margin, how do you look at in second half versus 1, 8.
Because in H2, two, three things will happen. Actually, even if gold price could be a little on the high side, which we do not know at this point of time, that is linked with steel, steel market situation. If this remains at this level, then the steel prices are also going to go up. It will balance out. That is number one. Number two, in quarter three and quarter four, because our CapEx are over in all the steel plants, the production is going to go up and movement in the furnaces, blast furnaces will improve. Thereby, the cost reduction will be also there. In quarter three, quarter four, we can have better cost reductions. That will add to our profitability.
Okay, and one last question which I even had asked in the last for your provisional price table, which you know, provisional price revenue, the table which you said in the footnotes, how do we read into those numbers? What do you mean by the cumulative number and the YTD numbers? Because if I look at in Q2 you have mentioned INR 2,500 crore for the current quarter and YTD you have mentioned around INR 4,900 crore. Q1 you had reported INR 2,600 crore. Ideally, it should have been INR 5,100 crore. What is this cumulative number which you share? Can you explain what is the working behind those numbers?
Yeah, I'll try to explain real price. This is regarding the real pricing.
Okay.
Right.
That is a constant thing in SAIL P&L balance sheet every time. The rail price has been finalized up to 2023-2024, and 2024-2025 is under process. That is on track. Independency of the finalization, what is happening is the provisional price is decided by the joint pricing committee in which there are members from SAIL as well as Railways. That is why right now whatever revenue has been recognized as per Ind AS 115 in the books of accounts is based on the provisional prices, and the provisional prices are already set. In that provisional price, we have got our revenue recognition done, which is in line with the market prices right now. Once 2024-2025 prices are finalized, the differential will also be booked to the profitability. After that, the provisional price will also be reset.
With every finalization of the price, the arrear amount is also put in the P&L account, and the provision price is reset. This is live in the notes to the accounts, which we always show as a part of the disclosure.
Thank you, Mr. Ravi. Please rejoin the queue for more questions. Next question comes from the line of Pallav Agarwal with Antique Stock Broking.
Hello.
Yeah.
Yes sir.
Good morning. You said you expect realizations to improve.
Could you just give a breakup?
How, you know, flat long prices moved between Q1 and Q2, and currently where spot prices are compared to Q2 average.
Yeah. Q1 and Q2. Just one sec. Q1 in case of long, quarter one was INR 54,500 and quarter two is INR 49,000. It is around INR 5,500 reduction between Q2 and Q1. That is regarding long products. In case of flat, Q1 was INR 50,400 and Q2 is INR 48,700. That means deduction of around INR 1,700. If you look at the average, actually on an average, quarter one was INR 51,700 and quarter two is INR 49,000. Around INR 2,700 average reduction in sales price NSR during quarter one and between quarter one and quarter two.
Sure, sir. This was you saying partly offset by the sale of scrap and defective. So.
This didn't show up in the blended realization.
Partly offset by that as well as partly offset by the input prices as well.
When we give this guidance of 18.5, this is excluding the NMBC trading volumes because at 0.3 million tons per quarter maybe we'll touch an annual run rate of 1- 1.2 million tons. This 18.5 is only sale production, right?
Yeah, that is on sales, production, sale production.
Okay. We want to get a rough sense of the profitability on the NMDC trading sales. We have the purchase of material. Is that a fair reflection of the purchase cost from NMDC?
Yeah, there is a fair reflection on the purchase cost on NMDC based on an agreement kind of a thing. That goes as per that.
Lastly, we will also just share how, you know, spot prices in October compared to, you know, Q2 average. How much are they lower than that?
Which one spots?
Let's say October price.
Yeah. October till long. Long prices INR 50,000. INR 49,900. Flat is INR 46,600. In October we can say that the flat prices are down by around INR 1,200- INR 1,300 per ton, while long prices are flat. That means in case of long products the prices are flat in October as compared to September. There is a downward trend in HR coil prices. Flat prices, flat excluding plates, the PM plates. In PM plates the price is almost flat. In case of HR products and CR products there is a reduction of around INR 1,200- INR 1,300 in October as compared to September.
Sure, sir. Yeah.
Thank you so much.
Thank you.
Thank you. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Rashi with Citi. Please go ahead.
Thank you. Sorry, I just missed the October flat realization. Would you say it was INR 46,800?
INR 46,600, ma'am.
On the SAIL side, what was the average cost in this quarter?
Average cost in quarter two is INR 17,400.
How much was imported coal?
I'm talking about. Yeah, imported coal is INR 18,150.
That's INR 17,400, is currently trending at INR 17,300.
Now, is that what you said, 17,400 was in quarter two, and right now it is almost at the same level so far as October is concerned.
Got it.
On the CapEx side and on the debt side, we've got the non-India debt numbers. Can you just give the India net debt number for September, please, and also the projected CapEx for the year?
Regarding CapEx , actually regarding CapEx we've achieved in H1 INR 3,370 crore of INR 3,005 crore, INR 100 crore, and for this year we are targeting in excess of INR 7,500 crore of CapEx . That is regarding CapEx . You referring to the index and non-index. Are you talking about the borrowings? Yes, you're talking about the borrowings. Now, when you're talking about the borrowings, just 1 sec. Index borrowings are INR 33,663 crore as on 30.09.2025, and non-index borrowings is INR 26,427 crore. That is the actual borrowing. Non-index borrowing. The actual borrowing in the books of SAIL, which is INR 26,427 crore, which is a reduction of around more than INR 3,000 crore as compared to the opening.
Thank you.
Thank you. Next question comes from the line of Sachchidanand Khedekar with Equitas. Please go ahead.
Can you from next quarter onward just spell out the NNBC volumes and revenue and cost item in the presentation?
It will be more helpful for.
Let us understand how much is the gain from NNBC.
I mean the quantities and relation we can certainly give for information of everybody. The gain part is inbuilt in the system. It may not be exactly possible to quantify that at this point of time.
Secondly, what is the quantum of.
Scrap sales in this quarter?
We provide that information. Let me try to see if I can. It has gone up quite a lot. INR 1,140 crores actually as compared to INR 869 crores in quarter one. Increase of around INR 200- 250 crores.
All right, thank you.
Thank you.
Thank you. Next question comes from the line of Samayavi with Evander Spark. Please go ahead.
Thanks for the opportunity. Sir, on value-added products you mentioned you did talk about QOQ increase on value-added products. Can you give a similar number?
Yeah, value-added products, actually the total value addition is around 57%. We've been trying to increase this value-added products quarter after quarter. We are expecting that this will improve further in quarter three and quarter four. If you can compare, in quarter one it was 55%. It has improved to 57% in quarter two, and going forward we are targeting more than 60%.
Got it, sir. Also, on the byproducts which you said, which also increased and helped on the realization front, is there any quantum nature of the products? What's the quantum of nature?
I can explain. Actually, the nature is in the scrap side. Defectives, rejected material, scrap iron and steel, scrap crude, tar, slag, and other things put together. These are the nature of items, the waste material. Basically, all the waste material.
This qoq increase of INR 200 crore includes everything, or it's only the scrap?
It includes everything. Actually, we've been focusing on having frequent auctions for the by-products as well as steel items. Steel means the scrap items, defective and scrap items, so that there is liquidation of stock as well as cash flow releases working.
you release any quantum that you can give in terms of inventory that we carry on these items, even volumes or?
We have, but we'll be able to provide afterwards. Right now, just in front of me, it is not there. Yes, we do maintain that Berlin as well.
As you were saying, this is something that you expect to continue in the next subsequent quarters also, of other options and then liquidation of this.
Yeah, we continue that because there are other rejected material and defective metal lying in the subfloors. We are trying to bring it to one place and bring it to the yards for conducting auctions. We want to reduce that stock.
One clarification on the long pricing. At an industry level, we have seen a sharper rebar price correction, which is close to INR 6,000- INR 7,000. Whereas, as you were mentioning, during Q1 to Q2, only INR 4,500. What could be the difference? Is it discounts or any product mix? That is one. You mentioned about current long prices versus September. If you can give a current long versus Q2 average, that would be current.
Long price in October is around INR 50,000, INR 49,940 as compared to Q2 average of INR 48,800. That means around INR 1,100 on the higher side. Current prices are on the higher side as compared to Q2.
Thank you, Mr. Somaya. Please rejoin the queue for more questions. Next question comes from the line of Karthike Kumar with BNK Securities. Please go ahead.
Hello.
Hello.
Yeah, am I audible?
Yes please.
Yeah.
Thank you for the opportunity. Sir, I just wanted to understand how much volume growth can we expect in FY 2027 as compared to suppose a.
Provisional FY 2026.
In FY 2026-2027 we expect to have growth of more than 5% as compared to FY 2025- 2026. We'll be targeting anything between 5%- 7% at least. That will happen through the bottlenecking process. The bottlenecking process.
Beyond FY 2028, say like any new CapEx that you are looking at.
Any update on that?
Yeah, primarily the CapEx will come from two counts. One is the expansion in scope and the other one is the debottlenecking packages in other places. That is why actually if in this year we are targeting in excess of INR 7,500 crore, these are going to jump substantially from next year onwards.
Okay, can you give a ballpark number or like.
Yeah, next year on what it be more than INR 10,000 crores. It will be in excess of INR 10,000 crores in 2026-2027, and after 2026-2027 it will be still further more.
Okay, just one more question. I just wanted to understand what's your long-term debt reduction strategy. Like, any specific ratio, net debt to EBITDA or something that you're looking at that you target internally?
Yeah, on that count, actually, now that we are reducing the borrowings, if you look at debt-equity ratio on non-index basis, it is around 0.46, which is where we want to reduce it down to 0.35 or maybe 0.4 by the year end. After that, from next year onwards, as I have already discussed, our CapEx is going to pick up primarily because of the debottlenecking projects as well as the expansion projects of ISCO. That is why the borrowings are going to go up. We are creating a headroom for having more borrowings to fund our expansion projects going forward. Expansion projects are outlined for next four, five years in a bigger way.
What should be the proportion of, you know, debt or internal accrual.
That you are used to funding? Yeah, we're looking at 50, 50% at this point of time. Thank you, thank you.
Thank you. Next question comes from the line of Parthiv Jhonsa with Anand Rathi. Please go ahead.
Hi sir, thanks for the opportunity. Just on the byproduct scrap sales and everything, I just had a very quick question. I believe in this quarter you said you did about INR 1,140 crore kind of realization from those category. Considering you have done some recent auction in coal tar and, you know, where you have been, especially in iron ore, you have received some better interest compared to coal. Is this number expected? Considering you're going to sell more and the quantum, each and every auction is getting higher and higher, is it expected that this number of levels 40 is expected to go up higher in Q3?
Yeah, it is going to go up higher, higher in Q3 and Q4 also because it is not just coal tar, it is also the defective as well as iron and steel scrap items and also the slag items. All put together, this is a bundle, actually a bundle of all those plant sales.
Okay.
Is it fair to assume that this entire benefit of INR 1,140 has flowed down to EBITDA and PBT?
Yeah, because it was in the stock exchanges. The differential amount between sales price and stock valuation rate that has gone to the PBT and EBITDA,
is it possible to get?
Because the borrowings have come down, in terms of reduction in interest, that has also gone into the PBT after.
Absolutely, absolutely. Sir, is it possible to quantify the positive quantum, what it had on your profitability?
Right. Say for example if there is a reduction of around INR 300 crore between quarter two and quarter one, an increase in that realization. Out of that, at least 20%- 25% has flown into the EBITDA and PBT.
Okay, perfect, perfect. This is quite helpful, sir. Thank you so much.
Thank you,
thank you. Next question comes from the line of Tushar Chaudhary with Prabhupada Shiladar Private Limited. Please go ahead.
Good morning, sir. Am I audible?
Yeah, audible. Good morning.
Yeah, thanks a lot for the opportunity. Would like to know the progress of DPR. I think we for ISCO.
Can you be little?
I mean, give me yours more details on the projects which are going to come up in second half of FY 2027.
Yeah. In case of ISCO expansion where we are planning 4.5 million tons of expansion at a cost of around INR 36,000 crore, the major packages were already tendered and majority of that are already finalized. Order placements in certain cases have already been made and in a couple of one or two months, order placement for the balance major packages will be completed. After that, the design engineering will start and then the physical activity, supplies, and physical ground activities will start over there. That means from 2026-2027 onwards, in 2026-2027 there will be major CapEx payments towards ISCO expansion packages. So far as order placements are concerned, they're almost on track.
the rest of the projects, any DPR activities?
Yeah, in rest of the projects we're looking at the debottlenecking projects at Durgapur, at ISCO, at Bhilai, at RSP. These are also on track. In certain cases, orders have been placed. For example, in case of Durgapur Steel Plant, the rebar mill order was placed last year. The ground activities already started over there. In blast furnace of Durgapur, they are also finalizing orders like that. In all the plant units, the tendering processes are going on. In certain cases, orders have been placed and work is already started.
Okay sir, one last question. On this scrap, you said for Q2 we sold INR 1,140 crore of scrap.
Yeah.
Okay, thanks.
Thanks for putting this together.
Okay, thanks.
Thank you. Next question comes from the line of Rajesh Ravi with HDFC Securities. Please go ahead. Yeah.
Hi sir, am I audible?
Yeah, you're audible. Please go ahead.
Yeah, so this byproduct and others which you mentioned in the annual report in schedule, this is mentioned as other secondary and byproduct, which was like in FY 2025 INR 3,300 crore revenue or income booked from this.
Yeah, this is a part of that byproduct.
Yeah, yeah, understood. Okay, this is part of around INR 2,000 crore you have realized in the first half. Is this understanding correct?
Yes.
Okay. Secondly, I was again coming back to your disclosures regarding the provisional price table which you put in. I just want to understand technically what do you mean by the cumulative number over there, because that number and also the half yearly number, they don't match. The first two quarters don't match.
Just one thing. If you can be specific on the numbers, we'll try to.
Okay. The standalone on slide number nine or the result table is number nine. For this quarter you have mentioned the number is INR 2,500 crore and Q1. This number which we had presented was INR 2,600 crore. Put together should be around INR 5,100 crore. Half yearly number which is put in this quarter table is INR 4,840 crore. Similar differences are there even in the last year numbers which I have calculated. Why this difference first, and second, what is this cumulative till 30th September number of INR 13,800 crore? What does that mean?
Okay, so cumulative till that is INR 13,800 million total provision cumulative, which includes not only rail items. It actually includes rails as well as defense items put together, anything which is sold to the government. The majority of that is rail items. After that also we have other items like the quantities which are going to defense from different plants, all three plants. So the INR 13,800 million includes rails as well as defense items.
Okay. These yearly and quarterly numbers, how do we match them?
These numbers vary a little bit based on the debit advices and credit advices, which are concurrent in nature.
That's also my end.
Thank you.
Thank you. Next question comes from the line of Siddharth Khadikar with Equitas. Please go ahead.
Follow-up questions.
First, on the employee wage revision.
When do we expect the next employee?
Wage revision to kick in?
Yeah, regarding wage revision, actually it was from 2017- 2027. It is first January 2027 after which it will be due.
Okay. The quantum of increase that we are expecting in employee cost beyond.
That is because there is no guideline right now. Actually, it will not be possible for us to quantify when we do not know.
Okay, thanks.
Thank you. Next question comes from the line of Vinit Thakur with Plus 91AMC. Please go ahead.
Hi sir.
Am I audible? Yeah, you're audible.
Hi.
Hi sir, good morning.
I just want to know.
Why is there a reduction in the OPM, sir, as in Q1 year on year as well?
Pardon? Can you please repeat the question once again?
I.
I found a reduction in OPM QOQ here. Could you shed some light on why? What is the reason behind it?
Yeah, reduction in OPM between Q2 and Q1 you're talking about. That's primarily because of two things. One is reduction in the sales price, and the other one is actually in Q2 we had taken certain capital repairs and there were some issues with Bokaro steel melting shop in quarter two. That is why there is a reduction in quarter two in OPM. All the capital repairs are over as well as Bokaro has come back on track. From quarter three onwards we are expecting good numbers, improved numbers.
Could we shed some light what would be the.
Would be back to original numbers around 12% or should be going down, would be around 11% as the last quarter.
Talking about quarter three,
I'm talking about the Q1 of FY 2026 and the.
Q1 of FY 2024, Q2 of FY 2024.
FY 2025 had around 12% and FY 2026 had around 11. I just want to know would.
Be around maximum same number or would be.
Yes sir.
EBITDA margin actually in H1 2024-25 was 12.9% and average 2024-25 was 11.57%. Right now it is 11.01%. We are expecting that it should improve in quarter three, then more so in quarter four. Actually, in quarter four there should be a good number because every time we find that in quarter four things improve a lot. It will go towards 14, 15%, something like that in quarter four.
4.
In quarter three it may remain flat or may improve a bit depending on how the market behaves. As I said, all the capital pads are over. The production is going to go up, so things are looking up.
Reduction in production as well is due.
To the Bokaro plant reduction of crude.
If we look at the crude steel and hot melt, they are linked to each other. It is primarily because of Bokaro plant; they had issues with steel melting shafts, which is resolved by now, just a couple of days before. Now it has started improving production.
Okay sir, thank you so much.
Thank you.
Thank you, ladies and gentlemen. That was the last question for today. We have reached the end of the question and answer session. I would now like to hand the conference over to Ashish Kejriwal for closing comments.
Hi, thank you everyone. I would like to thank the management to give us an opportunity to hold the call and Dr. Ashok Kumar Panda for patiently answering all the questions. Sir, any closing remarks from your side.
That will be helpful?
Yeah, thank you very much. Mr. Kejriwal and all our members who participated here. I'd like to give my closing remarks here. The second half of the financial year is always the best for the steel industry and we hope the trend would continue in this year as well. Meanwhile, steel demand also continues to prosper, and with the improvement on the efficiency front and cost control measures, we will try to improve our margins in the balance period of the year. Also, the company remains committed towards sustainable performance including emphasis on decarbonization, improving capacity utilization, value addition, and achieving cost competitiveness. I thank all our investors for reposing their faith in us and I'm hopeful that the same shall continue in future as well and we'll try to come up with better numbers as the time progresses. Thank you. Thanks a lot to everybody.
Thank you. On behalf of Nuvama Institutional Equities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.