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Steel Margins Squeezed: Q3 FY26 Outlook Grim
13 Jan
Summary
- Indian steel firms may see Rs 1,530 per tonne margin hit.
- Falling steel prices and rising coal costs impact Q3 FY26.
- JSW, Tata Steel, SAIL, and Jindal face significant EBITDA declines.
Indian steel majors, including Tata Steel, JSW, SAIL, and Jindal Steel, are projected to experience a substantial margin squeeze in the third quarter of fiscal year 2026. A Kotak Institutional Equities report forecasts a decrease of approximately Rs 1,530 per tonne, driven by a dual pressure of declining steel prices and escalating coal costs.
The report highlights that the selling price for most steel products saw a decrease of around Rs 2060 per tonne in Q3 FY26 compared to the previous quarter. While improved output and lower iron ore expenses offered some relief, these benefits were largely counteracted by the surge in coking coal prices, particularly affecting flat steel products.
Consequently, leading players like JSW Steel and Jindal Steel are expected to report significant year-on-year and quarter-on-quarter declines in EBITDA per tonne. Tata Steel and SAIL also anticipate reduced profitability per tonne, despite potential volume growth. Investors are now closely watching upcoming results to gauge the full impact on net profits.
