Ladies and gentlemen, good day, and welcome to the Steel Authority of India Q3 FY 2026 Earnings 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 call, please signal an operator by pressing star then zero on your touch-tone phone.
I now hand the conference over to Mr. Ashish Kejriwal from Nuvama Institutional Equities. Thank you, and over to you, sir.
Thank you, Rahul. Good afternoon, everyone. Once again, we welcome you all for our Q3 FY 2026 post-result con call of Steel Authority of India. We are pleased to host Dr. Ashok Panda, Director of Finance, who is along with his team. Now, I will request Mr. Panda for his opening remark, and thereafter, we will open the floor for Q&A. Over to you, sir.
Yeah. Thank you, Mr. Ashish Kejriwal ji. Good morning, everyone. I welcome all our investors and analysts who are joining this results con call for the financial results of SAIL for the quarter Q3 and nine monthly FY 2025-2026. Before we move to Q&A session, let me brief you on the results for the period. In the economic scenario front, global economic scenario front, beginning with global economic scenario, the uncertainties and volatilities are almost stabilizing right now as it seems. Global inflation has also been largely steady as of now. The projections for GDP has improved in line with the same for economies individually, as well as, the regional, as well as, global averages.
Global growth is projected to remain resilient at 3.3% in 2026, and expected to be 3.2% in 2027, rate similar to estimated 3.3% outturn in 2025. The focus marks a small upward revision for 2026 from the present levels. The projections for India have also been revised upwards to 6.4%, from 6.4% to 7.3% by various agencies. It seems the economy is going to grow at a better rate. So far, as global steel industry is concerned, the landscape for the global steel industry is influenced by economic trends, trade policies, and technological advancements.
Of late, it has seen positive movement in the demand and cost push in the prices, primarily because of increasing coal price as of now. In the Indian steel industry front, Indian steel industry continues to enjoy robust demand for steel, with consumption during nine monthly FY 2025-2026 grown by almost 7% over CPLY. The growth in production of crude steel has still, has been still higher at around 9.5% during the same period. This has led to India again becoming a net exporter, as exports grew by around 33% to 4.8 million tons, vis-a-vis imports, which has reduced by about 37% to 4.65 million tons this time.
When we compare to last year, the scenario was totally different because this time the exports have been much more than the imports, and of course, the cess duty also is playing a role in this. We can find that there is some sort of stability in the domestic markets in, I mean, from December onwards. We will now discuss about the company performance of SAIL for Q3 and nine months FY 2025-2026. Coming to the performance of the company during nine months FY 2025-2026, the highlights are as follows: crude steel production grew by 2% from 14.08 million to 14.35 million tons, whereas saleable steel has grown by around 4%-5%. Sales volume grew by 16.3% for the company.
And we have outreached, we have started outreaching to the retail as well as other consumers. And because of this huge growth in sales volume in nine monthly, it has resulted in an inventory reduction by a good number, as well as reduction in borrowings. Revenue increased by 9% from INR 73,162 crore to INR 79,997 crore, broadly in line with the growth in the volume. And PAT increased by 60% in nine monthly of this year as compared to CPLY last year. It is highlighting operational efficiency, liquidation of inventory due to sales growth, and cost optimization as well as good treasury management. So in other words, we can say it is due to a better financial prudence.
Reduction in debt is close to INR 5,000 crore in nine months, and in January alone, we have again reduced by around INR 2,000 crore, and momentum continues for February as well as March. Going forward, as the monsoon season and festive seasons are already over, we hope that the market will see an uptick in terms of pricing in quarter four. As the coal prices continue to remain range bound, in fact, little on the higher side, and the market support is also there, so the margins will remain good in quarter four. This is what we're expecting. So quarter four, again, there will be a better growth for SAIL.
With these few words, I hand it back to Mr. Kejriwal for opening the Q&A session.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. The first question is from Amit Lahoti from Emkay. Please go ahead.
Thanks for the opportunity. In the first quarter of FY 2026, we took INR 1,000 crore of inventory write-off due to falling coking coal prices, and now that prices have gone up, was there any gain in Q3? And then how much it could be in Q4 at the current prices? That's my first question.
Should I answer this question? So, answer to this question is that actually, in the first quarter, as you said correctly, it was close to INR 1,000 crore of impact in the stock valuation rate on P&L account. In Quarter two, it was not much. In Quarter three, we had a positive, and that could be somewhere around a maximum INR 100 crore. In Quarter four, because the coal prices are on the rise, we expect that the cost of production is going to go up in Quarter four. So we've not yet estimated, but yes, it will have a good positive impact on the profitability as well as the margins, so to say.
So any broad number at the current prices, how much that could be? Like, is it like INR 500 crore--
I mean, we can't exactly say. We can't exactly say, primarily because, you know, the coal price is increasing, but now it is little bit stable at $251. But at the same time, production level is also increasing, so they will nullify each other to some extent. But even then, we believe there will be an upward, a positive impact on the profitability. The numbers anybody could guess could be around INR 200 crore , INR 300 crore , INR 400 crore , but that we cannot say as of now. But obviously it will be a positive one, based on our guess.
Okay. And then my second question on the expansion plans. As we have a sizable cost disadvantage, compared to our peers, to start with, on the margins and cost, how much it could narrow once we start getting in the incremental volumes from expansion projects, particularly ISP, which is coming, like, two years from now. How to think about that?
Yeah. So where IISCO is concerned, actually, we have a project over there, which is around INR 36,000 crore estimated, and most of the major packages have been already ordered out. So the ground activities have already started. They are going to finish in three years' time. That is the timeline. And we believe after we get that, then the production volume, as well as the margin which will come from there, will really bolster our profitability to a greater extent. And, for that matter, for those to accommodate those borrowings, we've already reduced our working capital borrowing quite a lot. As I've already told, we're keeping a margin to accommodate for the expansion CapEx.
Okay. So is it possible to quantify that number, either in terms of, say, EBITDA per ton or cost per ton? How much it could benefit once it comes in? Any kind of--
See, those will be new facilities. Those will be new facilities. So right now, our EBITDA per ton is, I think, EBITDA per ton is. So those numbers will be more than that. Right now, INR 6,000, hovering around INR 6,000-INR 7,000 right now. So quarter four will be better than that, and we believe that ISP expansion, once expansion is over in time, then the numbers will be more than INR 10,000 per ton.
Right.
From ISP expansion.
Just as a follow-up to this, is there any revised CapEx guidance for FY 2026 and 2027?
Yeah. So the CapEx guideline, guidance for FY 2026-2027 is INR 15,000 crore.
INR 15,000 crore for 2027?
For 2026, 2027. That is because actually some of the CapEx payments towards ISP expansion, IISCO expansion, will be there actually next year.
Okay. Thank you so much.
Thank you.
Thank you. The next question is from Pinakin Parekh, from HSBC. Please go ahead.
Yeah, thank you very much. My first question is, can you quantify the price increases that you have taken in December and January across flat and long products?
Let me just tell you. Along with--y ou're talking about January or December?
December and January, total.
I mean, actually, the market started improving from middle of December, actually. Till November, it was subdued, kind of. September, October, November were quite subdued situation. So towards the end of December, it started increasing, market started improving and started increasing prices in long as well as flat. So in December, when we look at the actual impact, increase of the prices got reflected in January, it did not get reflected in December.
Either for long or for flat. So the real increase of around, say, INR 2000-INR 2500 was reflected in January in long and around, say, INR 3300-INR 3500 in flat in January, so far as sales price is concerned. But the actual increases happened during the month of June in two-three tranches, so all of that will get reflected in February. So that means in February, real increase in NSR in sales price will be quite encouraging, will be more.
Got it.
Primarily because the coal price also is having upward journey. That's the reason why it will be price increasing domestic market.
Sure, sir. Now, what we understand is, sir, that the price increases at the trade level in India have been much larger, but the company-level price increases have been lagging so far. So do you expect further price hikes at the company level in February and March?
Oh, that's what I'm saying, actually. In the month of June and January, because the price increase took place in two or three tranches at during the month, so all of that could not be reflected, because, because it got averaged out in the sales price of January. So that is getting spilled over to the next month. Means in February, actually, you will, you will find a good jump in sales price. And at the same time, I'm telling you that actually the coal price also, there's a good jump. So kind of they are going in the same in tandem.
Sure. And what is the coking coal cost increase that you see in the fourth quarter? Because spot prices have surged to $250, average $184 in 3Q. So what kind of cost increase should we see?
Just one minute. Just one minute. So, when we talk about imported coal price, one point. So, like in January, the average imported coal price is INR 18,500, and which is expected to increase by INR 1,200 in February, which is INR 19,700. And this is because of the weighted average arrivals and the stock quantities and all that. But otherwise, as you said correctly, the index has gone up to $251 per ton. It was hovering around $190, $185, $190. So in February, we're expecting around INR 1,200 increase in consumption rate will be there. And in March, there could be an increase of another INR 1,000 over and above this.
Got it.
We don't know whether it will further increase beyond $251 or it will then taper down. I personally feel that actually it should not increase much. It will stabilize, and after that, after the situation improves in Australia, probably it will taper down.
Understood. Sir, my last question is that if you look at the sales volume that you reported, steel sales volume, how much was NMDC volumes in this, and what would, what would be the margins in that?
Come to that, NMDC volume. Just one sec. Just one second. So our total nine-month sales.
Okay.
Total sales volume is 14.6 million tons. NSL is? Almost 1 million tons.
Out of that, NMDC is 1 million ton.
Yeah, NSL, for that matter, is 1 million tons.
And, sir, the margins on that steel sales would broadly be the same what you are seeing at your operating company? They are higher, lower? I mean, how will the--h ow long will this arrangement continue?
See, this pricing is exactly as per SAIL, Steel Authority of India Limited, so we're targeting their products in the, mostly in the south market, so that is going exactly in line with our own products. So there is no difference in their pricing compared to SAIL pricing of SAIL, so far as the quantities that we are handling. There are some quantities which they are handling, we can't comment on that. So this is at par with SAIL, SAIL products, in whichever market it is going.
The pricing is the same, but what about the cost, sir?
I mean, it is kind of an arrangement between NSL and SAIL. So the delta, we can't exactly say right now. I will say that, check it out. But--
Got it.
Mostly we are maintaining a price parity in the market without any disadvantage to SAIL or NSL. So it is to an advantage to SAIL, as well as NSL, as well as to the marketplace.
Got it. Thank you very much, sir.
Thank you.
Thank you. Next question is from Vikash Singh , from ICICI Securities. Please go ahead.
Hi, sir. Thank you for the opportunity. Sir, my first question pertains to our employee costs, which has surprisingly gone down on sequential basis. So first thing, what is the main reason? Secondly, how should we look at the employee cost going ahead in the next year since there is a mandatory wage revision would be coming in?
Yeah, let me come to that actually. Salary wages, salary wages, which is around 11.5% right now. So as compared to last year, as compared to this month it is almost at the same level, if you look at last year. You're talking about quarter three or what?
Sequential, sir. Sequential was a decline.
No, it is almost at the same level, because I'm finding that whether it is quarter three to quarter three or even, if you look at quarter two to quarter three, then there's a reduction that is just an adjustment of the actuary and all that, so that's a different thing. But, broadly, if you look at, nine M to nine M, both are remaining almost at the same level of INR 6,100 crore. Last year also, nine M was INR 5,943 crore, and now it is INR 6,080 crore. Broadly, at the same level.
I was looking at the Q3. If you look at the last quarter was INR 2,900 crore and almost INR 39 crore. So it has come down almost INR 100 crore, basically on a sequential basis. So what was the actuarial valuation difference which had not come this quarter, or there was a reversal of provision, if you could give, give me that number?
There are two reasons for it. One is actuarial, which is depending on the discounting factor, that's a different thing, and factor is increasing. The other thing is basically the guarantee component. As you can see, in H1, we had taken a hit because of that, INR 25 lakh. After achieving 50% in IDA, then it was increased to INR 25 lakh. So that is the reason why actually Q2 was appearing to be on the higher side. And also the discounting rate is increasing, so all put together, in Q3, we are finding that it is appearing to be little less than that. And the same thing will continue in quarter four as well. Now, coming to your other question of salary revision, from 2026, that will happen from 2027, 2028 onwards.
It is not from 2026, 2027, just to clarify. Because it will be applicable from January 1, 2027, so most of that impact will come from in 2027, 2028. And at the same time, as you are finding, we are having around 50,000 number of employees on our rolls right now who are legacy people. So every year there's a hefty reduction in the manpower. So on the whole, the manpower reduction—because of manpower reduction, the cost is going to go down, and because of pay reduction, which we do not know how much it will be, it will be calculated based on the guidelines. Guidelines is not there in position right now. So we'll see, plus and minus—there will be plus and minus both the sides.
There'll be some net impact, maybe, but that will come in 2027, 2028, not now.
Noted. My second question pertains to our product mix. Since we have already reached the, at least the production volume peak out has happened, is there any scope for us to enrich our product mix, bring down the semis for the next year and bring up the EBITDA pattern? So, or, the demand of these products are such a way that this would be difficult to do. So if you could give us some thought process on the company side on this.
Yeah, let me just tell you. Now, before I give you number, let me tell you the context, is that we've been trying to reduce the semis as much as possible. One is by increasing our own production. And right now, semis percentage is 10%. If you compare with previous years, it is less because our focus is on having finished products more than the semis by taking three, four pronged action. One is, in the mills, we are trying to increase the production as much as possible by having more availability, better availability of the mills, better care regarding the equipment, et cetera. Number two, we are having conversion contracts in place as well. We are maximizing that.
So through these two things, so through these two things, actually, we are trying to have more finished products in the market compared to the semis. So the semis percentage has been coming down gradually. And, number two, at Durgapur Steel Plant, we've started one project which is 1 million ton TMT bar mill. So that will come up maybe two years from now. Already activity started, ground activity started. Once that comes up, you'll find that semis will be almost very close to 0% at that point of time. So it is only a matter of time, that we will see that semis will be zero.
By when this could be possible?
I mean, it will take around two years time from now. It will take 18 months. 18 months, yeah. So it is 18 months time. Already ground work is already started. So if we are end of 2025, 2026 right now, 18-24 months is the timeline. You can say 18 months timeline for that, for completion of project activities. And after that, stabilization and commissioning, those things should be there.
Noted. So just last--
[audio distortion] Sometime 2028.
Yeah. So just one last question about the news on the accident at the plant during 3 Q. So just wanted to understand, had this anything spilled over to 1 Q as well, or overall production-wise sector, there was no loss?
If you're talking about the accident of--
Basically, because we are having this kind of incident every year, so any plan to control this?
Correct. So if you're talking about the incident of Bhilai Steel Plant SMS, because you are not specific on that. Are you talking about asking about that question? If that is the question, then-
One incident happened in Bokaro, and then just recently in Bhilai. Within a span of four months, there were two incidents.
Correct.
So I want more about the recent Bhilai, which could have impacted the 1 Q, sorry, 4 Q performance.
Let me address this, these two questions. One is the Bokaro, which we also discussed during H1, and one is the Bhilai, which happened right now. So far as Bokaro is concerned, actually, that is already sorted out. It impacted us in quarter one, in quarter two greatly. And now, the SMS, both the converters in, in SMS, Steel Melting Shop, they are in full gear, and they are producing at almost 100% target levels. So their SMS is all right, because of which blast furnace, they did not have any problems, so blast furnace has picked up, hot metal has picked up, crude steel has picked up. They are almost operating at 98%-100% capacity right now.
That is a story regarding Bokaro, and they will go like this in quarter four and going forward also like that, because we have taken certain actions that in future, such tube leakages can be avoided in the converter, because we've got the spare parts and all that. Now, so far as Bhilai is concerned, Bhilai SMS is concerned, again, it is back on rail. In Bhilai SMS, the converter which had the vessel changed. So after that, actually, there is a bit of problem because of which spillover of metal had taken place, and it had burnt the electrical cables. So that. And it was down for around 15, 20 days. Now it has come back.
Production at Bhilai Steel Plant has again picked up to its normal level of around 18,000 to 18,500 tons per day of hot metal. It had impacted us around 15 days to some extent. Around 2,000 tons per day was the impact in physical terms for around 15-16 days. Now, it is completely all right, and in future also, in quarter four, there is not going to have any problem. All our five ISPs are full blast right now. They are producing at the highest levels, and this trend will continue for quarter four.
Thank you. Before we move to the next question, a request to participants to please limit your questions to two per participant so that the management is able to address questions from all participants in the conference. The next question is from Pallav Agarwal from Antique Stock Broking. Please go ahead.
Yeah, good afternoon, sir. So the first question. You know, was on the bridge, EBITDA bridge, you know, from, in your presentation, from 2Q to 3Q. There, you know, one of the negative things has been shown as the volume impact. But I thought, sir, we had an increase in volumes compared to on a sequential basis, sir. Any reason for that negative impact due to volume?
Yeah. Just one sec. Between quarter two to quarter three, no?
Yes, sir.
Yeah, that, that's primarily because of the reduction in production of saleable steel. Even if there is improvement in hot metal and crude steel to some extent, but saleable steel came down because of the reason that actually in the previous quarters at RSP, new [Austenite] mill, new [Austenite] mill has more capacity. So they were producing more by taking slabs from Bokaro Steel Plant, by taking slabs from the excessive stock of Bokaro Steel Plant. So right now, because in Bokaro, [Austenite] has picked up and everywhere it is picked up, so in-process stock has come down at Bokaro Steel Plant. That is the reason why actually at RSP, the saleable steel level remained low. So that was the primary reason for reduction in saleable steel volume in quarter three compared to quarter two, quarter two.
In quarter four, all the five plants, they have already increased their production because all the capital delivery, everything is over. So all the mills are in full blast. All, blast furnace as well as SMS, they are, at 100% level or more than 100% level. So availability of slabs for Rourkela Steel Plant to meet the more requirement, the higher requirement of HSM-2 will be there. We'll be sourcing slabs from Bokaro as well as Bhilai to Rourkela to have that delta production at HSM-2, at Rourkela Steel Plant. So that was the reason.
Okay. So primarily, it's because of lower saleable steel production, not the sales volume. So that's led to the--
Yeah, as you can see, sales volumes have picked up like anything. Despite having bad market, it is around 16% growth in nine months compared to previous year.
Okay. So the other thing, you know, the same thing, you know, input price cost, there's a positive number. So is this-- I thought coking coal costs would have gone up sequentially, so could you just clarify that as well?
I mean, coking coal cost actually went up after December.
Cost?
After December, it is also having a savings of the power cost in that. Coking coal, partly, and mostly because of the power cost, because we are trying to reduce our power cost by sourcing it from RE power sources. So we've taken certain actions in different plant units, and that has given rise to some savings.
This should be structural, the saving going in?
Yeah, this is the structure. It's a part of that, and we'll further improve. We're working on that. It's a requirement as well. RE power is a requirement for us. As well as by going for RE power, we're getting also price advantage in certain cases.
Sure, sir. Also, if you could just, you know, the NSL volumes you mentioned for the nine months, could you also just give us the third quarter volumes?
Third quarter volumes, let me check that. Just hold on. 0.37 million tons, quarter three.
Sure, sir. Okay, thank you.
Thank you very much.
Thank you. Next question is from Raashi Chopra from Citigroup. Please go ahead.
Thank you. On your realization, what was the exact change in realization sequentially, NSR?
Which one?
NSR. NSR, what was the change from 2Q to 3Q?
From Q2 to Q3? In Q2, if you look at average NSR. So, in average NSR, there is a drop. In Q2, it was INR 48,836, but in Q3 it was INR 47,735. But if you compare between long and flat, in long, it has increased from INR 48,885 to INR 49,021. In flat, it dropped from INR 48,790 to INR 46,580. So there was a drop in NSR in flat as compared to long. So average NSR also, there was a bit of drop.
Then on the coking coal cost, you mentioned that the Jan cost was INR 18,500. I assume this is your blended coking cost, right? Not in--
Yeah, that is, that is actually average. Yeah, you're correct.
What was that number in the third quarter?
Third quarter number was INR 18,351.
INR 18,350?
Yeah. Third quarter number is INR 18,350.
Okay. And on the CapEx, you mentioned that in FY 2027, the CapEx is going to be INR 15,000 crore. For this full year, FY 2026, what is the CapEx for?
For the full year, initial guidance was INR 7,500 crore, and then final guidance is INR 10,000 crore. It will be anything between these two.
How much has been spent in the nine months?
Nine monthly figure, yeah, so nine monthly figure was INR 5,427.28 crores. INR 5,428 crores.
Got it. Thanks. The last question for me, on the volumes, what are you targeting for this year and next year?
Yeah, just one second. So this year you see, April to December, hot metal volume is 15.14 million tons. And by year ending, we expect that is-- Just one second.
Oh, sales, just sales volume is good enough.
Yes, let me complete this one. So year-ending figure of hot metal could be in, around 20.5 million or something like that, close to 21 million tons. So next year, we're targeting 22.5 million tons of hot metal.
On the sales side?
On the sales side, let me tell you, so sales volumes are on the higher side, and so if my saleable steel in nine monthly is 14.2 million tons, 14.6 million .
14.6 million.
Total sales volume in nine months is 14.6 million , so it is going beyond the production levels, and we are reducing our inventory. Our inventory levels have come down. In nine months, if you look at, our inventory levels are down by around 0.3 million tons as compared to starting of the year, both in-process as well as sales put together. So further reductions will be there. So going by this, we'll be able to achieve a sales volume around 19.5 year ending, which will be more than the production.
Thank you. Next question is from Sumangal Nevatia from Kotak Securities. Please go ahead.
Yeah, good afternoon. Thank you for the chance. So first question is, I want to understand at the EBITDA level, is there any contribution from this arrangement, of NMDC volumes, NSL?
So let me tell you, actually, as I have already told, in case of NSL products, it's beneficial to NSL to sell as well as to the market players. So that is purely based on the arrangements we've made. But, mostly, mostly, as I told you, it is just, keeping a parity of the pricing strategy of sale in various regions. We are concentrating mostly on the south. We are concentrated mostly on the south. So while nine monthly is concerned, the quantities have already been told. So there are positive margins. However, the margins are small. It's not very high, but it is giving a market stability. It has given a market stability. So, all three fronts, people have, benefited out of this.
Okay. And so this year, when we are seeing about 16%-odd growth, I mean, ex of NSL, it's around 7%-8%.
Yeah.
So the guidance, ex of NSL would be, what, 18.5 million ton volumes for this year?
For this year?
Yeah.
-19.5 million . Yeah, you're correct.
But 1 million ton i s already done in the nine months, right? So--
1 million ton is already done, and in quarter four, much of quantity may not come. So in a way, if we end up, we try to end up at 19.5 million , no, sales figure, so it could be somewhere, our own figure could be somewhere around 18.5 million -18 million , around 18.5 million or something like that.
Where can we take-- Got it. Got it.
Yeah.
In absence of new capacity, where can this 18.5 million go in, say, next two years, 2027 and 2028?
In 2026-2027, let me address this question for 2026-2027 first. While in this year, in 2025-2026, we are trying to finish hot metal at 20.5 million -21 million tons. We are targeting 22.5 million . 22.5 million for 2026-2027. That means, that means you can say around 21 million tons of saleable steel in 2026-2027. And, and then we can have further growth in 2027-2028. Once we achieve this particular growth, then we'll have further growth in 2027-2028. So you can say in 2027-2028, it could be 23 million tons of hot metal and 21.5 million tons of saleable steel. And after that, we will see that ISP modernization will be there.
Okay, and this is, sir, ex of NSL or including NSL's 1 million ton?
This is ex of NSL.
Unde Understood. And, sir, next year, CapEx will substantially increase. I think earlier it was around INR 10,000, now we're talking about INR 15,000. So can you give a break up, and in this, ISP expansion, how much are we spending, and what is the time frame for the expenditure for next two-three years?
For next two, three. See, the ISP expansion CapEx total will be around INR 36,000 crore. So from 2026-2027, we'll have major amount coming from ISP expansion. So ISP expansion amount could be in excess of, could be somewhere around, maybe around INR 7,000 crore -INR 8,000 crore in case of ISP expansion, so far as 2026-2027 is concerned, and after that, it will again pick up. Means the peak figure will be in 2027-2028, and also 2028-2029 for ISP expansion.
Okay. So, the completion could be towards the end of 2029 or maybe FY 2030 as well, right?
FY 2030, yeah. Somewhere around FY 2030.
Understood.
End of 2029 or 2030, something like that.
Okay. And, sir, the coking coal cost, which you shared, so the increase in Feb versus 3Q average is just around 7%-8%. Is that the right comparison? Because, if you look at, the dollar price, it's gone up by more than 20%. So have we got the numbers right? It is INR INR 19,700 versus some INR 18,000.
Which one are you talking about?
The coal cost, sir.
Yeah, coal cost.
3Q versus spot, can you explain us what is the increase?
The average 3Q actually, which we told it is INR 18,351, that is basically because of the averaging of the stock out here, as well as the supplies we are getting from time to time. But the spot prices have gone up. The spot price is $251, that is index price, and based on that, actually, we have 90%, 97%, etc., from different, different sources. So these prices are getting reflected slowly and slowly, partly in February and partly in March, and also the effect is going to come in April as well. As you know, there is a time lag of around 1.5 months to 2 months for these prices to get reflected in the consumption.
Okay.
And also, the dollar-rupee parity is also impacting this.
Okay, so on consum--
Both things are impacting this.
So on consumption basis, what is the quarter-on-quarter increase? Because this is. Yeah, can you explain that, sir? On consumption basis.
Because quarter two, quarter two was INR 18,158, and quarter three is INR 18,351. There was not much of increase in quarter three. But in quarter four, you will find an increase of around INR 1,500 over quarter three, is what I'm guessing.
Understood, sir. Understood. All right, thank you, sir, and all the best.
Thank you very much.
Thank you.
Would that be the last question, please?
We have one more. The next question is from Tushar Chaudhari from Prabhudas Lilladher. Please go ahead.
Yeah, good afternoon, sir. Thanks a lot for the opportunity. Sir, last quarter we sold around INR 1,140 crores-odd of sale of scrap. How much was this quarter, scrap and byproducts?
Let me just give that figure. Just one sec. Can you ask the next question before you take up this one?
Okay. So CapEx, you are saying INR 7,000 crore to INR 7,500 crore to INR 13,000 crore for FY 2026 and 2027, it will be INR 15,000 crore- odd . Am I right on this? Okay.
Right.
There were some debottlenecking, necking projects at DSP, RSP, BSP, which we talked about earlier. Can you throw some light on how much CapEx will do for them?
Yeah. So far as RSP is concerned, they've already completed task number 4, and the production is going to start now. It's already started over there, so that part is over. So far as DSP is concerned, the debottlenecking brownfield project already started, and that will take around 18-20 months time.
Which uses the TMT, TMT mill.
TMT mill, yeah.
Okay.
Which we said the TMT mill. At the same time, after TMT mill also, we are starting one blast furnace over there. We'll knock off one old blast furnace, we'll start a new blast furnace. So along with blast furnace, we have another converter, et cetera. So beyond TMT mill, we have also approved another package for them. And which will also increase the overall capacity of Durgapur Steel Plant by 1 million ton. So TMT is a mill which is 1 million ton, and that is already, activity is already started. It will be completed in 18 months' time, another 18 months' time, and this will reduce the semis to zero.
But after that, overall capacity of hot metal and crude steel will increase by 1 million ton through another debottlenecking activities, in which we are going to put up one blast furnace, one converter, and caster, and we'll knock up the old one. Coming back to your first question, Q2 was INR 1,140 crores , now it is INR 1,279 crores .
INR 1,279 crores .
In quarter three.
Okay. And how much, how much is the finished steel inventory now?
Let me come down. So finished steel inventory sale as a whole, it is around 1.5 million tons, and in-process inventory is 0.9 million tons. Together, 2.4 million tons. As at 31st March, it was 2.7 million tons.
Okay. Thanks a lot, sir. Thanks a lot.
Thank you very much. We'll take that as the last question. I would now like to hand the conference over to Mr. Ashish Kejriwal for closing comments.
Yeah, thank you, sir. Sir, just before closing, one question from me also. We are talking about 19.5 million ton of sales volume guidance for FY 2026, so which means that, and in nine months, we have already done 14.6 million . So, do you want to say that, you know, our fourth quarter volume will be more or less lower than third quarter? Or then because now 14.6 million , we have already done, and we have done 5.15 million in third quarter. So how do you look at the volume in fourth quarter?
Yeah. 14.5 million is already done in 9M.
Yes.
And our Q4 volumes will be more than that of, more than that of Q3. Only thing is that actually, in case of NSL, we may not take much of a volume from NSL. That's the only consideration. We will --
Okay.
We want to sell as compared to the other ones, so the NSL numbers may be less in quarter four as compared to 9M. That's the reason.
But, overall, do you think that we can do 5.5 million ton? Because if that happens, then, total volume will cross 20 million ton.
Let's see. We are trying a lot because as you can see, in January, also we had a stock reduction of around 0.3 million tons, and February and March, I'm expecting optimistically 0.3 million tons. So that's the reason we will make endeavor towards that.
Sure. Sir, lastly, when you are talking about average price increase of around INR 3,000 in tranches in January, so are you saying that we are going to increase further prices in February, or it's because the average price in January will be lower than the spot price?
No, it is, there is an upward movement in the market right now because of the coal prices. So as you said correctly, the guidance is that it will be upward.
Okay, sir. Thank you so much.
Even March also.
Sir, any closing remarks from your side? We'll then end the call. Thank you.
Yeah, thank you very much for all the Q&A session and all that. The second half of the financial year is always the best for steel industry. Things have already started looking up, and we hope that the trend and momentum will continue. Meanwhile, steel demand is also significantly moving up, and with the improvement on the efficiency front and cost control measures, should be, so it'll improve the margins in the balance period of the year, that is quarter four, despite having the coal prices remaining high. There is a lot of inventory reduction in this quarter four, and borrowings will go down drastically. Because of reduction in the borrowings, because of the interest cost is going down. As you know, in nine monthly, our interest cost has come down by INR 500 crore.
We expect that another INR 500 crore reduction in inventory will additionally happen in quarter four. So overall, for the year, the interest reduction could be around, interest cost reduction could be around, INR 1,000 crore. Also, the company remains committed towards sustainable performance, including emphasis on decarbonization, improving capacity, utilization, value addition, reducing semis, and achieving cost competitiveness. We are also trying to reduce the cost as well as, improve the top line. And you will find that in this particular year, your top line, which was remaining almost at INR 100,000 crore earlier, now it is, going for a big number, in this year. I thank all our investors for their, reposing faith in Steel Authority of India Limited, and I am hopeful that the same will continue in future as well. Thank you very much.
Thank you very much. On behalf of Nuvama Institutional Equities, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.