SAIL shares jump 6% despite 'Sell' calls from UBS and Citi — Here's why

Shares of Steel Authority of India (SAIL) surged as much as 6% on Wednesday, July 29, even as brokerages maintained bearish calls on the state-run steelmaker following its June-quarter earnings.

The stock gained despite both UBS and Citi retaining 'Sell' ratings, as investors weighed the company's better-than-expected operating performance and management's reiterated FY27 volume guidance alongside its long-term expansion plans.

SAIL Q1 Results

SAIL reported a mixed set of results for the June quarter, with operating performance beating Street expectations even as net profit came in slightly below estimates.

Revenue rose 1.2% year-on-year to ₹26,245.6 crore from ₹25,921 crore last year; it was broadly in line with the CNBC-TV18 poll estimate of ₹26,250 crore.

The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased 50% to ₹4,152.6 crore, ahead of the poll estimate of ₹4,010 crore, while EBITDA margin expanded to 15.82% from 10.68% a year earlier and exceeded the expected 15.28%.

Net profit more than doubled to ₹1,644 crore from ₹745 crore a year ago but came in marginally below the CNBC-TV18 poll estimate of ₹1,703 crore.

The company said the quarter included a one-off negative revenue adjustment of ₹309 crore relating to a downward revision in FY25 railway prices. Excluding this impact, the EBITDA beat was stronger than reported.

What brokerages said

UBS maintained its 'Sell' rating with a target price of ₹170.

The brokerage noted that management indicated flat steel prices have declined by around ₹300 per tonne in July from the first-quarter average, while long steel prices are down by around ₹2,900 per tonne.

UBS highlighted SAIL's plan to increase iron ore sales to 8 million tonne in FY27 from 3.8 million tonne in FY26, subject to resolving logistics constraints.

The brokerage also pointed to SAIL's plans to reduce coking coal costs through higher production from its Tasra captive mine, expected to begin operations in December 2026, and management's guidance for capital expenditure to rise from ₹15,000 crore in FY27 to over ₹20,000 crore in FY28 and ₹25,000-26,000 crore in FY29, mainly for the IISCO expansion project.

Citi also reiterated its 'Sell' rating and struck a cautious tone with a target price of ₹160.

It said the strong first-quarter EBITDA was driven largely by higher steel realisations, while volumes declined around 9% from last year due to planned shutdowns. The brokerage flagged potential downside to earnings from softer domestic steel prices, limited near-term capacity expansion and rising leverage as capex accelerates over the next two years.

Management commentary

During the post-results interaction, the SAIL management maintained its FY27 volume growth guidance of around 13%, despite the first-quarter volume decline, attributing the weakness to planned maintenance shutdowns.

The company also expects coking coal costs to decline in August and September after rising in the June quarter and reiterated its focus on cost savings through FY29.

Street recommendations remain divided

According to Bloomberg data, 14 of the 33 analysts covering SAIL have a 'Sell' recommendation, while 13 gave it a 'Buy' rating and six recommended to 'Hold'.



Shares of Steel Authority of India were trading 5.1% higher at ₹174.32 as of 10:36 am. The stock has risen more than 17% so far in 2026, while delivering a 38% return over the last 12 months.