SAIL Shares Slip 2% as Q2 PAT Declines 49% YoY: Brokerages Weigh In
SAIL shares witnessed a sharp decline following the company’s disappointing Q2 FY26 financial report. The profit after tax (PAT) dropped significantly by 49% year-on-year, arriving at ₹427 crore, down from ₹834 crore in the same period last year.
Key Financial Highlights:
– Q2 FY26 PAT: ₹427 crore, a decrease of 49% YoY.
– Sequential Decline: 38% drop from ₹685 crore reported in Q1 FY26.
– Total Income: Increased by 8% YoY to ₹27,007 crore, compared to ₹24,944 crore in Q2 FY25.
– Sales Turnover: Rose 8% YoY to ₹26,524 crore, up from ₹24,498 crore.
– EBITDA: Registered at ₹2,829 crore, down from ₹3,174 crore YoY, and slightly decreased QoQ from ₹2,925 crore.
– Depreciation: Increased to ₹1,453 crore from ₹1,304 crore YoY.
– Finance Cost: Dropped to ₹484 crore from ₹758 crore YoY.
Following the disappointing results, prominent brokerage Morgan Stanley maintained an Equalweight rating on SAIL, setting a target price of ₹140. They highlighted:
– A noteworthy 20% YoY sales volume increase, totaling 4.9 million tonnes.
– Revenue surpassing estimates by 8% for the quarter.
– Strong EBITDA performance, coming in 35% above expectations.
– Average realization of ₹54,400 per tonne, reflective of a 2% increase.
– EBITDA per tonne was recorded at ₹5,100, exceeding the projected ₹4,000.
However, it is essential to note that this quarter included an exceptional loss of ₹340 crore related to gratuity liability.
In summary, while SAIL shares have faced pressure due to the decline in profits, analysts remain cautiously optimistic regarding future performance, particularly given the robust sales volume growth and better-than-expected revenue figures. Investors and market watchers will be keen to observe how the company navigates the challenges ahead.