SAIL looks to spend Rs 7,500 crore as capex in FY26 to expand plant capacities

New Delhi: State-owned steel maker Steel Authority of India (SAIL) is looking to spend Rs 7,500 crore as capex in the ongoing fiscal, 25 per cent higher from FY25, to expand capacities across plants, a senior company official said.

SAIL, which is India's largest steel player in public sector, is in expansion mode and working to scale up its overall capacity to 35 million tonnes (MnT) by 2030 from a combined 20 MnT capacity of its five integrated plants (ISPs) spread across Odisha, Jharkhand, Chhattisgarh and West Bengal, at an outlay of nearly Rs 1 lakh crore.

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"...capex last year was close to Rs 6,000 crore. And this year, we have kept a target of Rs 7,500 crore throughout the year, which is a higher target," SAIL Director, Finance, Ashok Kumar Panda told PTI responding to a question on company's investment plans.

The capex has already been approved by the board and SAIL is confident to achieve it by end of the fiscal. In the April-June, SAIL has already spent Rs 1,642 crore, which is more than the target set for the first quarter, he said.

Sharing details of the expansion plan, Panda said tendering activities are ongoing at IISCO Steel Plant (West Bengal), where a 4.5 MTPA expansion is planned. The plant has a current capacity of 2.5 MT.

At Durgapur Steel Plant (DSP), a brownfield expansion plan is in progress to increase output to 3.09 MTPA from current 2.2 MTPA, along with a greenfield expansion. For other plants, expansion plans are under consideration.

The expansion plans for Bhilai Steel Plant (BSP) in Chhattisgarh, Bokaro Steel Plant in Jharkhand, and Rourkela Steel Plant (RSP) in Odisha are being worked out accordingly.

When asked about the expectations from the coming quarters for the company, Panda said, "you already know we reported a multi-fold rise in consolidated net profit (Rs 885.93 crore) in Q1 driven by improved operational efficiency, better cash flow and strong growth in sales volume." Better cashflow has resulted in substantial reduction in borrowings.

SAIL will work towards that to maintain the momentum in the remaining three quarters as well, the Director said.

SAIL's saleable steel production (finished steel) during the quarter stood at 4.7 million tonnes as against 4.2 million tonnes in the year-ago period, registering a growth of 12 per cent.

Sales volume stood at 4.55 million tonnes, 15 per cent higher against 4 million tonnes in the first quarter of last year. In fact, this is the best ever first quarter performance in sales in any financial year for SAIL.

Sharing his outlook for the sector, he said the domestic steel industry faces a mixed near-term outlook. Global overcapacity and substantial imports, especially from China, are currently pressuring steel prices.

Demand in India is expected to remain strong, driven by robust growth in infrastructure and residential construction, projected at 8-9 per cent in 2025.

"Iron ore demand will surge, with domestic production aiming for self-sufficiency, though some imports may continue. Conversely, India's heavy reliance on imported coking coal will persist. However, efforts continue to boost local output and explore new technologies to reduce this dependence," he said, sharing outlook for raw materials.

SAIL is also planning to reduce imported coal usage in the future after the commencement of mining from Tasra Coal Mines, which are its captive mines, Panda said.

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