Ladies and gentlemen, good day, and welcome to the Q1 FY 2027 earnings conference call of Steel Authority of India, hosted by Nuvama Wealth Management. 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Kejriwal from Nuvama Wealth Management. Thank you, and over to you, sir.
Thank you, Eric. Good morning, everyone. Sorry for the delay to start the conference call. At the outset, on behalf of Nuvama Institutional Equities, we welcome Dr. Ashok Panda, Chairman and Managing Director, along with Additional Director Finance charge of Steel Authority of India. I would request Dr. Ashok Panda to give his opening remarks, and then we can open the floor for Q&A. Over to you, sir.
Thank you very much, Mr. Ashish Kejriwal. Good morning, everyone. I welcome all our investors and analysts who are joining this result, the concall for the financial year of SAIL for the period quarter one, 2026-2027. Though I am sure most of you might have already seen the results on the website of the company and through stock exchanges, I would briefly run through the same for the benefit of the house. When we look at the economic scenario globally, the period was impacted adversely by the geopolitical situation in the Middle East.
Not only did it impact the supplies of fuel across the globe, it also affected the supply chain for inputs like limestone, et c. Even it also affected to some extent, like the gas supplies, propane, et c, for the steel industry. On the other hand, the rising fuel cost led to inflationary pressures against raising the various expenditure heads. Notwithstanding this, the projections for India also remain range bound between 6.4%-7.2% by various agencies over the next two years.
Far as Indian steel scenario is concerned, the landscape for the steel industry is highly influenced by economic trends, trade policies, and technological advancements. Indian steel industry, however, continues to enjoy robust demand for steel, with consumption during quarter one, 2026-2027, which has grown by more than 8% over CPLY. The production, however, showed a muted, slightly lower growth of around 3% during this quarter 2026-2027.
Due to higher growth in imports as compared to exports, there was increase in imports as well as increase in exports. The net import for quarter one of 2026-2027 was to the tune of around 0.4 million tonnes-0.5 million tonnes, as against maybe 0.3 million tonnes last quarter one. Let us briefly look at the company performance for quarter one, 2026-2027. Performance of Steel Authority of India Limited.
Before highlighting the performance of the company during quarter one, 2026-2027, I would like to inform the House that owing to the circumstances that prevailed and the threat that loomed at large, SAIL decided actually to advance some of its major capital repairs during quarter one, so that it will be free after that and will start producing better in the next quarters. We had major capital repairs in IISCO Steel Plant, Durgapur Steel Plant, and also [Rourkela] Steel Plant, Bokaro Steel Plant, which were done in quarter one by design. That is the story about this quarter one compared to last quarter one.
This impacted the production volumes as per design, ultimately it helped us in some of the things, which led to a good profitability going forward. Coming to the performance of the company during quarter one, 2026-2027, the highlights are as follows. Crude steel production stood at 4.8 million tonnes in quarter one, 2026-2027, as against 4.9 million tonnes CPLY. This reduction is because of the capital repairs, which have been advanced in this quarter one by design. Sales volume was 4.2 million tonnes, which fell by around 7%-8% as compared to the previous year.
There was increase in inventory by around 0.2 million tonnes in the finished goods. The company, however, remains very much committed towards increasing its sales volume, including inventory liquidation in the balance period of this year, as we've done last year as well. Also our endeavor will be to reduce the working pool borrowings. When we look at the borrowing position as in June 30th, 2026, at the end of this quarter, we are almost at the same level as that of the beginning of this year. In spite of the fact that the inventory has increased by 0.2 million tonnes.
On the back of better realizations, sales turnover increased by well over 1% as compared to previous quarter one. Despite significant increase in prices of major imports like coking coal and fuel, limestone, the company was able to improve its profitability through measures towards operational efficiencies, better financial management, and treasury management during this period of quarter one. EBITDA at INR 4,356 crore showed for quarter one, 2026-2027, has a growth of more than 50% as compared to CPLY figure of INR 2,925 crore.
EBITDA margin at 16.7% is one of the best since 2021-2022, when the steel market that time was at its peak and coal price was at its bottom in 2021-2022. EBITDA per tonne also crossed a benchmark figure of INR 10,000 per tonne and stood at INR 10,464 per tonne in quarter one, 2026-2027. While talking about PBT and PAT, PBT and PAT stood at INR 2,159 crore and INR 1,636 crore in quarter one respectively, as compared to INR 890 crore and INR 685 crore respectively for CPLY period, with a growth of around 150%.
As mentioned earlier, the cash outflows were managed smartly through better treasury management efforts, which helped to keep the borrowings under check and this stood at INR 21,729 crore as on 30th June, which is almost at the same level as on March 1st, 2026 was INR 21,663 crore. The debt equity ratio was further reduced to 0.36x on actual basis at the end of quarter one, 2026-2027. Going forward, while Q2 has traditionally been a toughest quarter for the steel industry because of the incidents of rain, et c.
Efforts are being made not to increase any inventory during quarter two, and after that, our efforts will be to reduce inventory in quarter three and quarter four, so that on the yearly basis, there will be inventory reduction. We will continuously strive for increasing our efficiency levels and cost reduction efforts. Another good thing which has happened during this quarter, 2026-2027, is that our focus on mines has been foremost.
Now, we are trying to increase production for our captive mines and as well as consume and the rest quantity to sell in the market wherever it is possible. During this quarter one, we could have sales of around INR 400 crore more as compared to last year quarter one, and which has resulted in a profit of around INR 150 crore as compared to last year quarter one. These are the highlights. With these words, I hand it back to Mr. Ashish for opening the Q&A session.
Thank you, sir. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Alok Deora with Motilal Oswal Financial Services. Please go ahead.
Good morning. Sir, just had couple of questions. First is if you could indicate what was the NSR in 1Q as against 4Q. Based on the July and how the prices are moving, what do you expect for the second quarter?
Quarter one average NSR was INR 57,100 as compared to quarter four of INR 52,000. That means an increase of around INR 5,000 per tonne between these two. As far as Q2 is concerned, as I've already told, because there is monsoon season right now, traditionally there is always a reduction in the NSR. As far as Q2 expectation is concerned or maybe when you talk about July, the prices of the flat products, there is not much of a reduction in that. There are fluctuation in the long product prices.
There were reductions, but recently, there is a positive momentum which is visible because of which there is a possibility of increase in long product price. You can say that between June and July, in the long product price, there was a reduction of around INR 3,000 per tonne. Maybe it will improve by INR 500- INR 1,000 right now in the long products. In the flat products, between June and July, there could be a reduction of around INR 1,000 per tonne. Something like that.
Got it. How about the coal cost, sir? What was the coal cost on consumption basis in 1Q, and what's the guidance for second quarter?
The imported coal price in quarter one, 2026-2027 was on the higher side, INR 21,300 as compared to INR 18,100 in quarter four, means around INR 3,100 increase. The index of imported coal, which was at a peak of around 235 a couple of days before, now it has come down to a level of 220 today. That means there is some softening effect in the imported coal index, Argus and Platts and Argus index. We hope that because in the rainy season there are monsoon situations, et c, demand may come down and because of that, maybe the prices will soften in quarter two.
Okay. Any guidance on coal cost you can provide on? Yeah.
We're expecting that in Q2, going forward, maybe from August onward, there could be a reduction of around INR 1,000-INR 2,000 progressively in the imported coal cost on a monthly basis.
Got it. Just last question, sir. Based on the performance, are we maintaining the full year volume guidance?
Yeah, we are maintaining the full year volume, and we'll be having a growth of over last year by the year end.
Got it. That's all from my side, sir. Thank you and all the best, sir.
Thank you very much.
The next question comes from the line of Amit Murarka with Axis Capital. Please go ahead.
Good morning.
Good morning.
Hello. Good morning. Just first question would be on cost inflation of West Asia. If you could spell out the amount.
Your voice is breaking.
Amit, you're not clearly audible. I would request you to use your phone on handset mode, in case if it's not on the handset mode. Hello, Amit, are you there? Amit, if you can hear me, please sort the issue with your phone, and you may get back into the queue. Thank you. We'll move to the next participant, that is Ritesh Shah with Investec India. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. Sir, first is clarification in the prior answer you indicated we expect coking coal prices to go down by INR 1,000, INR 2,000 into Q2?
On a monthly basis, actually. I'm not talking about the average. When we look at month of August, maybe there'll be reduction around INR 1,000. Maybe in September, further INR 1,000. This is my expectation.
Okay. That helps. Sir, second is, can you indicate the volumes excluding RINL or any other sales that we have done for, say, NMDC Steel for the quarter?
When you look about that particular figure, NMDC Steel, as you know, actually, we are not doing the marketing this year, it is nil, almost kind of nil, NSL. Whereas CPLY, quarter one had INR 3.73 lakhs of sales. This time it is zero. In RINL, we sold around 96,000 tonnes, which was not there last year in quarter one. On the whole, if you combine NSL and RINL, then last year CPLY, CPL means last year quarter one, had a quantity of around 2.76 lakhs tonnes in that as compared to this year.
Perfect. Sir, just two quick questions. Sir, how do you see the pricing gap between primary and secondary longs? You did indicate that we are hopeful for long product prices increasing by [INR 100,000]. Sir, how should we look at the divergence between primary and secondary? That's one. Sir, second question is, how are we reading into the anti-dumping duty investigation, which has just got initiated? Is there any probability of safeguards basically to be reinstated again?
Yeah. Let me answer one by one, actually. First question is about the gap between primary and secondary in the TMT, in the long products. Now, the gap has narrowed down. The gap is around INR 5,000 right now, which is a healthy gap. That's the reason why probably there's a uptick in the NSR in the prices of the primary TMT products. This is my guesswork. Number two, you asked about-
Anti-dumping.
...safeguard duty and anti-dumping duty. In safeguard front, actually, yes. There is a safeguard duty still in place, which is 11.5% as of now, because it was there for three years. Now we are in the second year right now. That still continues. It is giving the relief to the much-needed relief to the steel domestic market. So far as anti-dumping thing is concerned, that is going on, and based on the investigation, maybe some measures will come as a relief to the domestic steel sector.
Yes, please. Sure. Thank you so much for the answers. Thank you.
Thank you.
The next question comes from the line of Parthiv with Anand Rathi Group. Please go ahead.
Hi. Good morning, sir. Thank you for the opportunity. Sir, my first question is pertaining to the sub-grade ore of fines. I believe you said that in the first quarter, you did some extra INR 400 crore from sale of ore. The question is actually divided in two parts. Number one is on the sub-grade ore of iron ore, what you have, the inventory. The second is, if you see the recent auction data of Steel Authority, the volume has actually been going down, especially since the June month from a couple of mines. Do you expect this third-party sales of ore to continue? Just wanted to get your thought process on.
Let me try to answer one by one. The last question, I didn't get it. The first question and second question, let me take. The first question is about SGF, sub-grade fines. We are having a volume of around 32 million tons inventory in the balance sheet. We have put up in the auction around 3 million tons. The rates are yet to come. We are hopeful that this time we'll be able to click that particular thing. That will become a beginning of our efforts towards selling 32 million tons going forward. Number two about sales from the mines.
The sales from the mines is primarily from the Odisha Group of Mines, from where we've been selling iron ore fines, fresh iron ore fines, tailings from there. The quantities have become more than twice as compared to last year. That's the reason why turnover from there has increased by around INR 400 crore and profit from there has increased by INR 150 crore.
Our efforts are to increase our production further and sell more and more in the market. We are also planning to sell from Chhattisgarh Group of Mines. Two auctions have fructified recently, just few days back, which is in quarter two. That will testify our possibility of increasing further sales from Chhattisgarh mines. We're also trying to sell from Jharkhand mines. Efforts are on in that.
Okay. All right, sir. Sir, just one quick clarity. The 3 million tons is the 2027 target, right?
Pardon?
For the sub-grade. The sub-grade ore 3 million tons auction target is for entire year of 2027 or it's for 2028?
No, this is the first case actually. Once it happens and starts moving, then we'll also see.
Okay.
Of course, that is the target for 2026-2027.
Okay. Also, I believe, just wanted to quickly get your understanding on the railway price revision, whatever you can share. What is your expectation? How are we supposed to see that going forward for the current year?
Yeah. All that I can say is, that it is based on the provisional prices, rail price. You're talking about rail price, isn't it?
Yes.
For the year 2026-2027, because the imported coal price is on the higher side and our provisional price is pretty low at INR 74,000. We are expecting better prices compared to that. That is going to improve our profitability, whenever it is declared.
Are you expecting anytime soon?
For 2026-2027, it will come in 2027-2028 and 2025-2026 prices will come in 2026-2027. We will see how it comes out at that point.
Do you have any preliminary understanding for last year's pricing, sir?
I mean, 2025-2026 prices will be more than that of 2024-2025 prices. It all depends how it gets. This may get
Okay. If I may just quickly squeeze in the last question from my side. I think recently Government of India imposed a definitive ADD on met coke for I think about five years. Would it be impacting you in any sense? Because I think-
It is not going to impact SAIL because we have our own capacity, which is equivalent to our requirement or maybe surplus.
Okay. Perfect. Thank you so much, sir. That's quite helpful.
The next question comes from the line of Pinakin Parekh with HSBC Bank. Please go ahead.
Yes, sir. Three quick questions. First, can you give us your updated CapEx guidance for this year and the next couple of years, given whatever the plans are?
Far as CapEx is concerned, this year, we're planning a target of INR 15,000 crore, and this is going to increase in next two, three years because our expansions are on. That means next year it could be in excess of INR 20,000 crore, and after that, maybe INR 25,000, INR 26,000, like that. It will go on increasing for next four, five years. This year it is INR 15,000 crore, and we are likely to complete that.
Got it, sir. My second question is, sir, you said that NSRs are, basically July was better than June. If I take the average NSR for the June quarter, the first quarter, versus what has happened in long product prices, 2Q NSR should be broadly be down by INR 2,000-INR 3,000 a ton or flat? How should we look at it?
When we talk about the NSR, actually, I said that quarter one of this year, NSR is higher than quarter four. In quarter two, that is starting July, the NSR will be less than that of quarter one, primarily because of the monsoon and dull demand and all that. That means, what I said is that in July, August, and September, reduction in flat prices may not be that much, but reduction in TMT, means LP, long products, will be more, actually.
In June and July, while there was reduction of around INR 2,000 in NSR of long products, recently, there is an upward momentum for the long products NSR. It might further increase by INR 1,000. If you talk about quarter two NSR as compared to quarter one, could be down by around INR 1,000-INR 2,000, maybe. This is just a guesswork.
Got it, sir. Sir, my last question is, can you give us an updated guidance for your employee cost for this year and whether you will start providing for the wage provision in the January-March 2027 quarter?
Salary raises this year in quarter one is INR 2,937 crore as compared to last year's figure of INR 2,944, almost at the same level. While in this quarter one, it includes the VR, differential VR amount, VRS, voluntary retirement, because our VR scheme is on, many people have taken VRS. That factor is also there in the employee remuneration.
The number of employees are coming down and VRS is on. We're expecting that the employee cost would come down, number one. Coming to your point of wage revision possibility. There in quarter four, we'll look at the probability and possibility of making some provision towards wage revision. Those aspects we will evaluate and examine in quarter four because that time it will be due. Material group will look into that.
Got it, sir. Thank you very much.
Thank you. The next question comes from the line of Pallav Agarwal with Antique Stock Broking. Please go ahead.
Yeah, good morning, sir. Just a couple of questions. First one, can you just update us on what is the current product mix, breakup between flats, longs, and semis?
Yeah. Just one sec. It's almost kind of 50%, 50%. One thing is that the semis have come down. The semis have come down from, say, 14% last quarter one to 11% this quarter one. Between long and flat is 52.7%, long is 34.8%, and semis are at 12.5% in quarter one.
Sure, sir. Because in the slide, in your sales performance slide, the proportion of semis is showing as 6%. Are we getting some semis converted outside and then into finished products?
Yeah, of course. Semis are getting converted to finished goods. That's the reason why I told you that finished steel has gone up from 86%- 89% this year. We are trying to convert most of the semis into finished and pushing that in the market.
Okay. I think the slide mentions 6%. Maybe that's after conversion, the final sales is about 6%.
Correct. You are right.
Okay. Also in terms of the coking coal, what is the breakup? Most of it is imported, but how much are we getting? Are we getting anything from our captive mines and what is the proportion from Coal India?
Yeah, captive mines actually is from Chasnala and Tasra. That is a part of the indigenous coal, that is not a part of the imported coal. Imported coal are at around 85%, indigenous coal is 15%. Out of that 15%, we get somewhere around 5% from our own mines and which is likely to go up from December onwards because production from Tasra mines, which is under development right now, is going to take place expectedly in the month of December. Fourth quarter will be a better quarter expectedly for us, in which we'll be getting more indigenous coal from our captive mines. This will also give an advantage in terms of pricing.
Yes. Could you just give us some idea of what is the cost benefit of indigenous versus imported coal?
See, in quarter one, the indigenous average price is INR 13,100 as against imported price of INR 21,200. That indigenous is INR 13,100, but when we'll be getting from our own mines, it may be somewhere around INR 5,000-INR 6,000, around INR 6,000. That component is going to increase from December onwards.
Sure, sir. Also, sir, this last [TV], would you just give us a sense of in our coke ovens, what is the sort of blending? You've given the PCI, the coke rate, and the PCI injection. Broadly, what is the proportion of pure hard coking coal that goes into our coke mix?
Just one sec. The percentage of soft coking coal is around 25%-27%. The rest is hard. Within that also, in totality, if you look at our imported component is around 85%, indigenous component is around 15%. That is on the whole. When we want a backup between soft and hard, soft is around, what percentage? 23% is soft and 61.7% is around hard coking coal. Means actually indigenous coking coal is 15%, then imported hard is 62%, and imported soft is 23%. That is how it becomes 100%.
Sure, sir. Okay. Thank you so much.
The next question comes from the line of Sumangal Nevatia with Kotak Mahindra Bank. Please go ahead.
Yeah, good morning, sir. Sir, I just want to clarify a few things. One is, the fourth quarter NSR you said is INR 57,100, right? Can you share the breakup of flat and long?
Yeah. Fourth quarter NSR is-
Sorry, 1Q. Sorry. I meant 1Q.
Yeah, INR 57,100 is the average, out of which almost same long is INR 57,100, flat is INR 57,200. It is average INR 57,150 to be precise.
Got it. Sir, what is the July NSR, for long and flat?
Yeah, July NSR average is INR 55,600. The flat is INR 56,900 and long is INR 54,200.
Understood. Got it. Sir, for the captive mines, when we shared that sales was INR 400 crore, profit was INR 150 crore, can you share what is the volume here? For the full year, what is our expectation?
Volumes are 1.1 million tons, last year quarter one was 0.31 million tons. When it is 1.1 million tons this quarter, last year we sold around 3 point- odd million tons. Although we are targeting a very high target of 8 million tons, let's see how far we can go.
Okay. Last year we sold 3 million tons for the full year.
For the full year, around 3.5 million tons or something million tons.
What was the revenue and EBITDA contribution of iron ore volume last year?
I'll have to check up actually, but I can tell you about the quarter one. I can tell you about the quarter one actually. In quarter one, as I told you, the turnover from the sales of iron ore was INR 157 crore last year quarter one, and in this year quarter one, it is INR 574 crore.
EBITDA for this year is INR 150 crore, right?
Yeah.
For 1Q.
You can say it is roughly the EBITDA also.
In the past, we've not been able to achieve our guidance because there's been some logistic constraint, and I think even for sub-grade mines, the demand for that quality is not there. Are those constraints now receding? What's the status on that?
Logistics constraint is still there. We are trying to vibe with that through better availability of rates as well as by increasing enhancing our quantities through road. Those are the efforts we're making so that the logistic constraints to some extent can be eased out. Those things are going on. Regarding the quality of the iron ore sub-grade fines, there is a lot of demand for the sub-grade fines as well as tailings, because these are not very low quality sub-grades. These are 59%-60%, and it is having a good marketplace. Even in case of tailings from Bolani, that means from Odisha Group of Mines, which are 57%, 58%, 56%, that is also having a good market demand. Market is good for that. We can achieve our sales quantities.
Okay. Just one last question on the coking coal. Sir, you shared consumption was around INR 21,300. What is the likely consumption cost for 2Q? Do you expect a reduction or an increase in consumption cost? I understand purchase is getting lower.
Yeah. It will reduce, because now the price is softening, so it will reduce only. Maybe there will be a reduction of around INR 1,200 or INR 1,500 in Q2 compared to Q1.
Understood. Sir, 1Q, what was the CapEx spend? Just last question.
INR 2,575 crore.
All right. Okay. Thank you, and all the best, sir.
Thank you.
The next question comes from the line of Amit Murarka with Axis Capital. Please go ahead.
Yeah. Hi. Thanks for the opportunity again. First question is on the cost inflation, which has been there. Generally, we have seen the impact of West Asia coming through on power cost and other raw material costs. In your assessment, what would have been that inflation in Q1 for you?
The increase is primarily from two fronts. One is on the coal front, because as you know, there is an increase of around INR 3,500 in the imported coal prices compared to last quarter one, which is easing out right now. That is one thing. The other thing is fuel cost has gone up to some extent. It has, of course, not impacted sale purchase so much, but the impact of the limestone, increase in the limestone cost, is also there in our cost of production. These are the broad things which have impacted the steel sector in totality, but the impact on us is less compared to others because the impact due to fuel is not much in our case.
Got it. Also, just to understand, you said that you are processing some semis from third parties. Who would be the third party, just to understand?
We have the conversion arrangements, and that is the domain of the marketing, and we keep on doing it dynamically. As to reduce the semis availability in the market. We are trying to improve our finished steel more and more. That is the reason why I told you, there is an increase of around 3%-4% in finished steel percentage this year as compared to last quarter one.
The arrangement with NINL has stopped or how is it working right now?
No, it is not a conversion arrangement with NINL. We are supporting them in terms of selling their semis whenever they want.
Sir, in Q1, was there any volume then from NINL?
NINL sales quantity is 96,000 tons of semis through our marketing setup.
95,000 tons. Okay.
It is not actually NINL. It is RINL. Sorry. It is RINL, Rashtriya.
Sorry, my bad. Not NINL. Sorry, my bad. I meant NMDC Steel, sorry. NMDC Steel.
NMDC is zero, as I have already told.
Okay. Sorry. Thank you so much. Yeah.
The next question comes from the line of Netra Deshpande with Mirae Asset Sharekhan. Please go ahead.
Thanks for the opportunity, good morning, everyone, and good morning, management. My first question, about the last quarter that you said about flux and the limestone expenses has increased on account of Strait of Hormuz in Dubai. Any impact on that about the sellable steel? As we have seen in that reduction of around INR 100-INR200 per ton. In the coming quarter also, is there any-
See, let me explain this particular question a little bit more. That because of Strait of Hormuz, actually, that is Gulf war situation, there is an impact on the fuel as well as in the limestone and the steel sector. Far as fuel is concerned, so far as Steel Authority of India Limited is concerned, we do not have much of an impact because we have our own gases produced inside the plant itself. Coke ovens are healthy, blast furnaces are healthy.
We could produce the gases, use it, not much of an impact. Far as fluxes are concerned, in the fluxes, because of this ocean freight, et c, the prices have gone up for everybody, and so also to us. The impact of that increase in the price of fluxes have been offset by reducing the specific usage of fluxes in this quarter one compared to the previous quarter one, and because of that reduction, we've got a saving on that count by around INR 25 crore. More or less it has offset the price increase due to ocean freight in the fluxes.
Okay. Got it, sir. Sir, secondly, it is about the debt position. What is at present, like in the last quarter, the finance costs have declined and that remained as a major deleveraging supporting the overall debt and debt- equity ratio has also maintained to the multi-year low of 0.55x. What would be this deleveraging in the trend which is going to continue for the Q1 FY 2027? What is the current position?
Yeah, at Q1 level-
Yes.
The debt is standing at INR 21,029 crore, which is almost at the same level as that of the opening of INR 21,663 crore. The debt equity ratio has come down to 0.36x, maybe from 0.38x or 0.39x in the opening of this year. Deleveraging efforts are on, and so far as today's position is concerned, the debt has further come down to a level of INR 21,400 crore. Efforts are on to reduce the working capital borrowings in this particular year by reducing the inventory, as well as through other sources for improving the cash flows.
Apart from that, actually, due to concerted efforts by treasury management, better treasury management, our cost of debt has also come down to a level of 6.24%, as compared to last year quarter one of around 6.8%. Because of which there is a saving of around INR 100 crore in the finance cost this quarter compared to the previous quarter.
Okay. Got it. Sir, the last it is only about the blended gross spread. Can you give me some figures for Q1 for term, like blended realization you gave, but for the blended gross spreads?
Blended what? I cannot get your question.
Gross spread. Between the segment, the product mix, about the blended realization breakup that you have shared.
Okay.
About any adjust, yeah.
You mean to say blended realization in terms of NSR?
NSR, yes. I mean, you can say about it. Blended realization that you have already mentioned about long and flat iron, the sellable steel, do you have any, particularly?
I just said, actually, so far as blended realization is concerned in quarter one, our average NSR is INR 57,156 and within that, when you look at the breakup, the flats are at around 52% and long is around 38%, 12% is semis. That is in the production front. As somebody told, actually, the sales front, the semis are still less by around 6%, because the rest 6% has been converted to finished goods. In totality, our blend has improved in this quarter one as compared to the previous year.
Okay, sir. Got it. Sir, about the subgrade auction grade that you said about FY 2027, it would be 3 million tons. The sales from mines, Odisha and from Jharkhand mine, can you elaborate or give some data?
Let me tell you the expectation, actually. Last year 2025-2026, we had a total sales of around 3 point- odd million tons, and all of that had happened from Odisha Group of Mines. That includes the fresh fines as well as tailings from Odisha Group of Mines. This year, we're expecting double the quantity from Odisha Group of Mines.
Some quantity from Chhattisgarh Group of Mines, for which the auction is fructified just few days back with a small quantity, but that is a testimony that we can increase further depending on availability. In the Jharkhand side, actually, we are making efforts to sell our sub-grade fines, which we are expectedly 3 million tons. Let's see how much it will go out. Number two, we are also trying to sell the fresh fines from Jharkhand. Numbers I cannot give at this point of time.
Okay, sir. Got it. Thank you, sir. Thank you for the answer.
Participants, in the interest of time and fairness to others, please restrict yourselves to two questions. For any more questions, you may rejoin the queue. The next question comes from the line of Vikash Singh with ICICI Bank Securities. Please go ahead.
Good morning, sir. Thank you for the opportunity. Sir, just wanted to understand the downward revision in rail pricing. What was the benchmark previously, and what is the benchmark now at which you are selling? For FY 2026, considering the costs are down, what kind of further downward revision can come?
Yeah, let me explain you. Actually, there is no benchmark actually in that. It is guided by efficiency and the coal prices primarily. It goes up and down depending on the input prices and the efficiency level in our rail mills. These days, our rail mills have a very high level of efficiency, which is even better than the global benchmarks. That is how it is working at Bhilai Steel Plant for rail production, and it is well appreciated by Indian Railways as well.
As I said, in 2024-2025, because imported coal prices remaining low, that is why the prices were low. In 2025-2026, there is improvement in the imported coal prices compared to 2024-2025. We are expecting better prices compared to 2024-2025. In 2026-2027, the imported coal price is still higher, much higher as compared to 2025-2026. Of course, the costing will be more, and the price will be more, which will be decided in 2027-2028. That is how it moves.
You're not expecting any further downward revision in the railway prices as of now?
We are not expecting any further hit on P&L on account of that.
Sir, my second question pertains to your DSP plant, basically. That had the highest degree of semis. There we were actually putting up some casters to increase the overall-- Hello?
Which plant you said? SP plant?
No, DSP plant.
Okay, Durgapur.
Durgapur Steel Plant. That had the highest semis. There we were actually putting some projects to increase the finished goods product. I think the caster which we are putting. Could you give us some update on at what stage that is? How much tolling charges you are giving for the semis to finished conversion to the third party?
See, let me answer your question. Durgapur, we are producing semis, which is in excess of 1 million ton per annum. Because of that, actually, we are putting up a TMT bar mill over there, and that will produce around 0.8 million tons, 0.8 million tons- 0.9 million tons of TMT from there. That is expected sometime in 2027, maybe September- December 2027. That is the expectation. During that time it is going to come. Once that comes, availability of semis from Durgapur will come down drastically.
Thank you.
The conversion charges, as you said actually, these are dynamic in nature based on certain formula, et c. This remains with the best standards of the industry.
The next question comes from the line of Ritesh Shah with Investec India. Please go ahead.
Sir, just one quick question. What is the total wage commissioning provisioning that we are doing right now? Would it be possible for you to give a number for employee cost for this year and next year, considering this variable?
What commissioning you said?
Pay commission.
Wage?
Sir, pay commission. Yeah.
Yeah, pay commission, as you know, actually is going to come from first January 2027. We are not much sure about it, neither there is any calculation available over there. As I said clearly, in quarter four, we'll evaluate, examine, and see what is possible in terms of provision.
Sure. Thank you. That's all.
The next question comes from the line of Akhilesh Kumar with Emkay Global Financial Services. Please go ahead. Akhilesh, please go ahead with your question and unmute your line in case if you are on mute.
Yeah. Hi. Can you hear me?
Yeah.
Yeah. Big question is how are we looking at the cost efficiency program planning out, what are the exact initiatives we are taking to bring the cost down? How much of per ton cost saving you would see to come from these initiatives, let's say over FY 2028 and 2029?
2028 and 2029?
Yeah. How much of total, in terms of rupee per ton, how much is of cost savings we are looking at?
We are looking at a cost reduction of around INR 2,000-INR 3,000 in this year itself. In quarter one, because many of our units are down because of the advancement of the capital repairs, the cost was little on the higher side. From quarter two onwards, because all the means and facilities are in place, cost reduction efforts will be there, and the cost reduction is there, number one.
When we look at a possibility of cost by 2028, 2029, by 2028, 2029, we will have new facilities coming up in IISCO Steel Plant and which will reduce the variable cost drastically because of reduction in the fuel rate, coke rate, et c over there. That time, the cost reduction, the variable cost could be to the tune of INR 3,000-INR 4,000 per ton. However, because the new units will come, naturally, there will be a push in terms of fixed cost at that point of time.
All in all, if we have to look at net cost per savings, because there will be some cost which will be coming up because of the new plants coming up also. Can we fairly say that INR 1,500-INR 2,000 of per ton cost savings will directly flow into our EBITDA?
Correct. You are very much right. Actually, by 2028- 2029, when we start getting production from IISCO Steel Plant expansion units, the variable cost will come down by around INR 4,000 and fixed cost may go up around INR 1,500-INR 2,000. Net, there could be a cost reduction of INR 2,000 at that point of time. Notwithstanding that, before that, from our current operations, we are trying to reduce our cost of production by around INR 2,000 through various efforts.
Thank you. The next question comes from the line of Rajesh Ravi with HDFC Securities. Please go ahead.
Yeah. Hi, sir. Am I audible?
Yeah.
Yeah. Hi, sir. I have two questions. First, given that the volume decline and the low CapEx which we have done in Q1, could you give us a sense of what we are looking at to maintain our full year volume and CapEx guidance? Also a second question, the iron ore volume and revenue EBITDA you shared for Q1, could you also share that same number for Q4 FY 2026?
Yeah. Let me tell you actually, so far as CapEx is concerned, Q1 CapEx target was INR 2,306 crore against which we have met INR 2,575 crore. Our yearly target is INR 15,000 crore. We are going on stream to achieve those figures. That is number one. Number two, on the volume front, as I told you, there is a reduction of around 0.1 million tons of production. That is because we advanced the capital repairs at IISCO, at Durgapur, and at Bokaro Hot Treatment. That was by design. In Q2 and Q4, the production volumes will be more than that of last year. On the yearly basis, there is expected to be a growth as compared to FY 2025-2026.
Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to the management for the closing remarks.
From me, as a closing remark, thank you very much for your Q&A day session. The forecast for Indian economy by various agencies have been quite encouraging, and support by the government is strengthening the belief that the economy will continue to do well going forward. Steel demand also continues to prosper, and we are hopeful that the prices will maintain the momentum that has been gained post monsoons.
Apart from the improvement in the operational performance, the company also remains committed towards sustainable performance, including emphasis on decarbonization, improving capacity utilization, value addition, and achieving cost competitiveness. I thank all our investors for their reposing faith in us, and I am hopeful that the same shall continue in future as well. Thank you very much.
Thank you, sir. Ladies and gentlemen, on behalf of Nuvama Wealth Management, that concludes this conference call. Thank you for joining us and you may now disconnect your lines.