Summary of quarterly results filing for Steel Authority of India Ltd published on 29 Oct, 2025

Below is a comprehensive extraction and structured summary of the relevant and actionable financial information from the Steel Authority of India Limited (SAIL) results filing for the quarter and half year ended 30th September 2025, based on the provided document:

1. Auditor’s Note

• The auditors have issued a qualified review report on both standalone and consolidated unaudited financial results for Q2 FY26 (quarter ended 30 Sept 2025) and half year ended 30 Sept 2025.

• Key qualifications and concerns:

  a) Entry Tax Liability (~₹108.28 crore):

  • Constitutional validity upheld by Supreme Court, but matters pending before High Court.
  • Management does not recognize provision; auditors opine provision should be recognized.
  • Impact: understatement of liabilities and overstatement of profit and equity.

  b) Refund from Damodar Valley Corporation (DVC) (~₹344.75 crore):

  • Refund includes principal and interest, adjusted fully against advances in books.
  • Not compliant with Ind AS 109 (Effective Interest Method not applied).
  • Auditors opine that interest income should be recognized separately and advances of ₹448.03 crore should have been provided for due to uncertainty on recoverability.
  • Impact: overstatement of profit and equity.

  c) Water Resources Department Demand (~₹1,146.44 crore):

  • Demand for revised water charges, under legal dispute, company paying under protest in installments.
  • Auditors opine provision should have been recognized as per Ind AS 37.
  • Impact: understatement of liabilities and overstatement of profit and equity.

• These qualifications have been consistent with prior periods (FY25 and earlier quarters).

• Other matters noted but not modifying opinion:

  • Revenue includes provisional pricing to government agencies.
  • Recognition of sub-grade iron ore fines inventory at net realizable value despite dispatch permission pending for some leases.
  • Exceptional item related to gratuity liability increase.
  • Suspension and reinstatement of certain officers/employees due to investigation; management expects no material impact.
  • Non-compliance with board composition requirements (lack of requisite independent directors).

2. Financial Performance

Standalone Financials (₹ crores)

Consolidated Financials (₹ crores)

3. Management Commentary and Notes

• Revenue includes sales to government agencies at provisional prices:

  • ₹2,505.40 crore in Q2 FY26, ₹4,840.05 crore in H1 FY26, cumulative ₹13,882.85 crore till Q2 FY26.
  • Provisional pricing subject to final price agreement.

• Inventory of sub-grade iron ore fines (SGFs):

  • Valued at ₹3,836.86 crore (39.89 million tonnes) as at 30 Sept 2025.
  • Includes ₹1,195.05 crore (12.34 million tonnes) at Topailore lease pending dispatch permission.
  • Valuation based on average selling price declared by Indian Bureau of Mines, adjusted for selling expenses.
  • Management expects no adjustment needed currently due to market demand and plans for beneficiation plant.

• Exceptional item of ₹338.44 crore in H1 FY26 relates to increase in gratuity liability due to increase in DA above 50% of basic pay.

• Legal and regulatory matters:

  • Entry tax demand of ₹108.28 crore treated as contingent liability pending court decisions.
  • Refund of ₹344.75 crore from DVC being adjusted in power bills over 24 months starting Jan 2025; uncertainty remains on recoverability of advances.
  • Water Resources Department demand of ₹1,146.44 crore for revised water charges under dispute; company paying under protest and treating as contingent liability.
  • Suspension and reinstatement of certain officers/employees due to investigation; management expects no material impact.

• Board composition non-compliance:

  • Company currently does not have requisite number of independent directors as per Companies Act and SEBI Listing Regulations.

• Debt and security cover:

  • Debt equity ratio improved to 0.60 (Standalone and Consolidated).
  • Security cover for secured listed non-convertible debt securities is very strong at 817.24 times (Standalone).
  • Outstanding bonds include a tranche of ₹14 crore maturing on 26 Oct 2025.

• Cash flows (Standalone):

  • Net cash from operating activities: ₹7,981.50 crore (H1 FY26) vs negative ₹1,136.70 crore (H1 FY25).
  • Net cash used in investing activities: ₹3,441.32 crore (H1 FY26) vs ₹2,278.41 crore (H1 FY25).
  • Net cash used in financing activities: ₹4,590.05 crore (H1 FY26) vs net inflow ₹3,442.75 crore (H1 FY25).
  • Net decrease in cash and cash equivalents: ₹49.87 crore (H1 FY26).

• Cash flows (Consolidated):

  • Net cash from operating activities: ₹7,975.60 crore (H1 FY26) vs negative ₹1,144.16 crore (H1 FY25).
  • Net cash used in investing activities: ₹3,430.71 crore (H1 FY26) vs ₹2,306.91 crore (H1 FY25).
  • Net cash used in financing activities: ₹4,590.06 crore (H1 FY26) vs net inflow ₹3,450.08 crore (H1 FY25).
  • Net decrease in cash and cash equivalents: ₹45.17 crore (H1 FY26).

4. Segment Information (Standalone and Consolidated)

Segment Results (Profit before interest, exceptional items and tax) - Standalone