Steel Authority of India Ltd (NSE: SAIL) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Ashok Kumar Panda — DIRECTOR (FINANCE) HOLDING ADDITIONAL CHARGE OF THE POST OF DIRECTOR (COMMERCIAL)
Analysts:
Ashish Kejriwal — Analyst
Amit Lahoti — Analyst
Pinakin Parekh — Analyst
Vikash Singh — Analyst
Pallav Agarwal — Analyst
Raashi Chopra — Analyst
Sumangal Nevatia — Analyst
Tushar Chaudhari — Analyst
Presentation:
operator
. Thank you. Sa. Ladies and gentlemen, good day and welcome to the Steel Authority of India Q3FY26 earnings conference call hosted by Nuvama Institutional Equities. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the conference over to Mr. Ashish Kejriwal from Nuama Institutional Equities. Thank you. And over to you sir.
Ashish Kejriwal — Analyst
Thank you, Rao. Good afternoon everyone. Once again we welcome you all for Q3FY26 post result con call of Steel Authority of India. We are pleased to host Dr. Ashok Panda, Director Finance who is along with his team. Now I would request Mr. Panda for his opening remark and thereafter we will open the floor for Q and A. Over to you sir.
Ashok Kumar Panda — DIRECTOR (FINANCE) HOLDING ADDITIONAL CHARGE OF THE POST OF DIRECTOR (COMMERCIAL)
Yeah. Thank you. Mr. Asish Khajirwal Ji. Good morning everyone. I welcome all our investors and analysts who are joining this regional concur for the financial results of sale for the quarter Q3 and 9 monthly FY 2526.
Before we move to Q and A session, let me brief you on the results for the period in the economic scenario front. Global economic scenario front Beginning with global economic scenario, the uncertainties and volatilities are almost stabilizing right now as it seems global inflation has also been largely steady as of now. The projections for GDP has improved in line with the same for economies individually as well as the regional as well as global averages. Global growth is projected to remain resilient at 3.3% in 2026 and expected to be 3.2% in 2027. Rates similar to estimated 3.3% outturn in 2025.
The forecast marks a small upward revision for 2026 from the present levels. The projections for India has also been Revised upwards to 6.4% from 6.4% to 7.3% by various agencies. So it seems the economy is going to grow at a better rate so far as global steel industry is concerned. The landscape for the global steel industry is influenced by economic trends, trade policies and technological advancements. Of late it has seen positive movement in the demand and cost push in the prices primarily because of increasing coal price as of now, in the Indian steel industry front, Indian steel industry continues to enjoy robust demand for steel with consumption during 9 monthly FY2526 grown by almost 7% over cply.
The growth in production of crude steel has been still higher at around 9.5% during the same period. This has led to India again becoming a net exporter as exports grew by around 33% to standard 4.8 million tonnes. VISIB imports which has reduced by about 37% to standard 4.65 million tonnes this time. When we compare the last year the scenario is totally different because this time the exports have been much more than the imports. And of course the Sepdar duty also is playing a role in this. We can find that there is some sort of stability in the domestic markets in I mean from December onwards.
We will now discuss about the company performance of sale for Q3 and 9 monthly FY25 26. Coming to the performance of the company during 9 monthly FY25 26 the highlights are as follows. Crude steel Production grew by 2% from 14.08 to 14.35 million tonnes whereas sellable steel has grown by around 4 to 5%. Sales volume grew by 16.3% for the company and we have outreached. We have started outreaching to the retail as well as other consumers. And because of this huge growth in sales volumes in nine monthly it has resulted in inventory reduction by a good number as well as reduction in borrowings.
Revenue increased by 9% from 73,162 crores to 79,997 crores broadly in line with the growth in the volume and pat increased by 60% in nine monthly of this year as compared to CPLY last year. It is highlighting operational efficiency, liquidation of inventory due to sales growth and cost optimization as well as good treasury management. So in other words we can say it is due to better financial prudence. Reduction in debt is close to 5000 crores in nine monthly and in January alone we have again reduced by around 2000 crores. And momentum continues for February as well as March.
Going forward as the monsoon season and festive seasons are already over, we hope that the market will see an uptick in terms of pricing in quarter four as the coal prices continue to remain range bound in fact little on the higher side and the market support is also there. So the margins will remain good in quarter four. This is what we’re expecting. So quarter four again there will be a better growth for Cell with these few words I hand it back to Mr. Kajerwal for opening the Q and A session.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions please press star and one. The first question is from Amit Lahoti from MK. Please go ahead.
Amit Lahoti
Thanks for the opportunity. In the first quarter of FY26 we took 1000 crore of inventory write off due to falling coking coal prices. And now that prices have gone up, was there any gain in Q3 and then how much it could be in Q4 at the current prices? That’s my first question.
Ashok Kumar Panda
Should I answer this question? So answer to this question is that actually in the first quarter as you said correctly it was close to thousand crores of impact in the stock relation rate on P and L account. In quarter two it was not much. In quarter three we had a positive and that could be somewhere around a maximum 100 crores in quarter four because the coal prices on the rise we expect that the cost of production is going to go up in quarter four. So we’ve not yet estimated but yes, it will have a good positive impact on the profitability as well as the margins so to say.
Amit Lahoti
So any broad number at the current prices how much that could be like is it like five?
Ashok Kumar Panda
I mean we can’t exactly say. We can’t exactly say primarily because you know the coal price is increasing but now it is a little bit stable at $251 but at the same time production level is also increasing. So they will nullify each other to some extent but even then we feel believe there will be and upward positive impact on the profitability. The numbers anybody could guess could be around 200, 300, 400 but that we cannot say as of now. But obviously it will be positive one based on our guess.
Amit Lahoti
Okay and then my second question on the expansion plans as we have a sizable cost disadvantage compared to our peers to start with on the margins and cost, how much it could narrow once we start getting in the incremental volumes from expansion projects particularly ISCO which is coming like two years from now. How to think about that?
Ashok Kumar Panda
Yeah, so far as ISCO is concerned actually we have a project over there which is around 36,000 crores estimated and most of the major packages have been already ordered. Out so the ground activities have already started. They are going to finish in three years time. That is the timeline and we believe after we get that then the production volume as well as the margin which will come from there will really bolster our profitability to a greater extent. And for that matter for those, to accommodate those borrowings we have already reduced our working capital borrowing quite a lot.
As I’ve already told we’re keeping a margin to accommodate for the expansion capex.
Amit Lahoti
Okay so is it possible to quantify that number either in terms of say EBITDA per ton or cost per ton, how much it could benefit once it comes in any kind of.
Ashok Kumar Panda
See those will be new facilities. Those will be new facilities. So right now our EBITDA per ton is I think just one sec, a bit of personal needs. So those numbers right now six thousand rupees hovering around six thousand to seven thousand rupees right now. So quarterfold will be better than that. And we believe that ISP expansion, once expansion is over in time then the numbers would be more than 10,000 rupees per ton from ISP.
Amit Lahoti
And just as a follow up to this, is there any revised capex guidance for FY26 and 27?
Ashok Kumar Panda
Yeah. So the capex guideline guidance for FY26 27 is 15,000 crores.
Amit Lahoti
15,000 crore for 27.
Ashok Kumar Panda
For 2627. That is because actually some of the CAPEX payments towards ISP expansion expansion will become, will be there actually next year.
Amit Lahoti
Okay, thank you so much.
operator
Thank you. The next question is from Pinakin Parikh from hsbc. Please go ahead.
Pinakin Parekh
Yeah, thank you very much. So my first question is can you. Quantify the price increases that you have taken in December and Jan across flat and long products?
Ashok Kumar Panda
Let me just tell you, You’re talking about Jan or December.
Pinakin Parekh
December and Jan total.
Ashok Kumar Panda
I mean actually the market started improving from middle of December actually till November. It was subdued kind of September. October number was quite subdued situation. So towards the end of December started increasing market started improving and started increasing prices in long as well as flat. So in December when we look at the actual impact increase of the prices got reflected in January did not get reflected in December either for long or for flat. So the real increase of around say 2000 to 2500 rupees was reflected in January in long and around say 3,300 to 3,500 rupees in flat in January so far as sales price is concerned.
But the actual increases happened during the month of June in two, three tranches. So all of that will get reflected in February. So that means in February real increase in NSI in sales price will be quite encouraging. Will be more. And primarily because the coal price also is having upward journey. So that’s the reason why it will be price domestic market.
Pinakin Parekh
Sure sir. Now what we understand is that the price increases at the trade level in India have been much larger but the company level price increases have been have been lagging so far. So do you expect further price hikes at the company level in February and March?
Ashok Kumar Panda
That’s what I’m saying actually in the month of January because the price increase took place in two or three franchises during the month. So all of that could not be reflected because it got averaged out in the sales price of January. So that is getting spilled over to the next month. Means in February actually you will find a good jump in sales price. And at the same time I am telling you that actually the coal price also there is a good jump. So kind of they are going in the same in tandem.
Pinakin Parekh
Sure. And what is the coking coal cost increase that you see in the fourth quarter because spot prices have surged to $250 average $184 in 3Q. What kind of cost increase should we see?
Ashok Kumar Panda
Just one. Just one minute. So when we talk about imported coal price. So like in January the average imported coal price is 18,500 rupees and which is expected to increase by 1200 rupees in February which is 19,700. And this is because of the weighted average arrivals and the stock quantities and all that. But otherwise as you said correctly the index has gone up to $251 per ton. It was hovering around $190. 185 $190. So in February we’re expecting around 1200 rupees increase in consumption rate will be there. And in March there could be an increase of another thousand rupees over and above this.
Pinakin Parekh
Got it.
Ashok Kumar Panda
So. And we don’t know whether it will further increase beyond 251 or it will then taper down. I personally feel that actually you should not increase much. It will stabilize. And after that after the situation improves in Australia probably it will taper down.
Pinakin Parekh
Understood. And so my last question is that if you look at the sales volume that you reported, steel sales volume, how much was NMDC volumes in this and what would be the margins in that.
Ashok Kumar Panda
Come to that volume. Just one sec. Just one second. So our total 9 monthly sales. So total sales volume is 14.6 million tons and NSL is 1, almost 1.
Pinakin Parekh
Million out of that NMDC is 1 million ton.
Ashok Kumar Panda
Yeah. NSL for that matter.
Pinakin Parekh
And so the margins on that steel sales would broadly be the same. You, what you are seeing at your operating company, they are higher, lower. I mean how, how will be, how long will this arrangement continue?
Ashok Kumar Panda
See this pricing is exactly as for sale still Authority of India Ltd. So we’re targeting the produce in the mostly in the south market. So that is going exactly in line with our own products. So there is no difference in their pricing compared to sale pricing of sale so far as the quantities that we are handling. There are some quantities which they are handling. We can’t comment on that. So this is at par with Sale Sale products in whichever market it is.
Pinakin Parekh
Going and the pricing is the same. But what about the cost, sir?
Ashok Kumar Panda
I mean it is kind of an, it is kind of an arrangement between NSL and Sale. So, so, so the, so the delta we can’t exactly say right now. Let’s say that check it out. But mostly we are maintaining a price parity in the market without any disadvantage to Sell or nsl. So it is to an advantage to Sell as well as NSL as well as to the marketplace.
Pinakin Parekh
Thank you very much sir.
Ashok Kumar Panda
Thank you.
operator
Thank you. Next question is from Vikas Singh from ICICI Securities. Please go ahead.
Vikash Singh
Hi sir. Thank you for the opportunity. So my first question pertains to our employee cost which has surprisingly gone down on sequential basis. So first thing that what is the main reason? Secondly, how should we look at the employee call going ahead in the next year since there is a mandatory wage revision would be coming in.
Ashok Kumar Panda
Yeah, let me come to that. Actually salary wages. Salary wages which is around 11.5% right now. So as compared to last year, as compared to this one it is almost at the same level. If you look at last year. You’re talking about quarter three or what?
Vikash Singh
Sequential. Sequential was a decline?
Ashok Kumar Panda
No, it is almost at the same level. What I’m finding that whether it is quarter six to quarter three or even if you look at quarter two to quarter three then there’s reduction that is just an adjustment of the actuary and all that. So that’s a different thing. But broadly if you look at 9m to 9m both are remaining almost at the same level of 6100. Course last year also 9m was 5943 and now it is 680. Broadly at the same level I was.
Vikash Singh
Looking at the 3Q if you look at the last quarter was 2900 and almost 39 crore. So it has come down almost 100 crore basically on a sequential basis. So that is so what was the actual valuation difference which had not come this quarter or there was a reversal or provision. If you could give me that number.
Ashok Kumar Panda
There are two reasons for it. One is actually which is depending on the discounting factor that’s a different thing and factor is increasing. The other thing is basically the gratuity component as you can see that in H1 we are taking a hit because of that 25 lakhs after achieving 50% in IDA then it was increased to 25 lakhs. So that was the reason why actually Q2 was apparent to be on the higher side and also the discounting rate is increasing so all put together in Q3 we are finding that it is appearing to be little less than that and the same thing will continue in quarter four as well.
Now coming to your other question of salary revision from 26 from. From that. That will happen from 2728 onwards. It is not from 2627 just to clarify because it will be applicable from 1st January 2027. So most of that impact will come from in 2728. So. And at the same time as you are finding we are having around 50000 number of employees on our roles right now who are legacy people. So every year there’s a hefty reduction in the manpower. So on the whole the manpower reduction because of manpower reduction the cost is going to go down and because it’s fair exam which we do not know how much it will be it will be calculated based on the guidelines.
Guidelines not there in position right now. So we’ll see a plus and mine there will be plus and minus both the sides so there’ll be some net impact maybe but that will come in 2728.
Vikash Singh
Not now noted. And so my second question pertains to our product mix. Since we have already reached the at least the production volume peak out has happened is there any scope for us to enrich our product mix? Bring down the semis for the next year and bring up the EBITDA pattern or the demand of these products are such a way that this would be difficult to do. So if you could give us some thought process on the company side on this.
Ashok Kumar Panda
Yeah, let me just tell you now before I give the number let me tell you his contact is that we’ve been trying to reduce the semi as much as possible. One is by increasing our own production and right now Semi’s percentage is 10%. If you compare the Previous years it is less because our focus is on having finished products more than the semis. By taking three, four pronged action. One is in the meals. We are trying to increase the production as much as possible by having more availability, better availability of the mills, better care regarding the equipment etc.
Number two, we are having conversion contracts in place as well. We are maximizing that. So through these two things. So through these two things actually we are trying to have more finished products in the market compared to the semis. So the semis percentage has been coming down gradually. And number two, at Durgapur Steel Plant we’ve started one project which is 1 million ton TMT Bar Mill. So that will come up maybe two years from now. Already activity started down, activity started. Once that comes up you’ll find that semis will be almost very close to zero percentage at that point of time.
So it is only a matter of time that we will see that semi’s will be zero.
Vikash Singh
And by when this could be possible.
Ashok Kumar Panda
I mean it will take around. Around two years time from now. 18 months. Yeah so it is 18 months time already. Groundwork has already started. So if we are end of 2526 right now 18 to 24 months is the timeline. You can say 18 months timeline for that for completion of project activities and after that stabilization and commissioning. Those things will be there.
Vikash Singh
Noted.
Ashok Kumar Panda
So just last.
Vikash Singh
Yeah so just one last question about the news on the accident at the plant during tq. So just wanted to understand had this anything spilled over to 1Q as well or overall production wise et cetera. There was no loss.
Ashok Kumar Panda
If you’re talking about the accident basically.
Vikash Singh
Because we are having this kind of incident every year. So any how to control this?
Ashok Kumar Panda
Correct, Correct. So if you are talking about the incident of village film SMS because you are not specific on that. Are you talking of asking about that question? If that is the question.
Vikash Singh
One incident happened in Bokaro and then just recently in Bhilai. Within a span of four months there were two incidents. So I want more. So let me recent delay which would could have impacted the 1Q sorry 4Q performance.
Ashok Kumar Panda
Let me. Let me address this these two questions. One is a Bokaro which we also discussed during H1 and one is a belief which happened right now so far as Bokaro is concerned. Actually that is already started out. It impacted us in quarter one in quarter two greatly and now the sms. Both the converters in SMS still melting sub. They are in full gear and they are producing at almost 100% target levels. So their SMS is all Right. Because of which blast furness they did not have any problem. So blast is picked up, hot metal is picked up, cool seal is picked up.
They are almost operating at 98% to 100% capacity right now. That is a story regarding Bokaro. And they will go like this in quarter four and going forward like that. Because we have taken certain actions that in future such tube leakages can be avoided in the converter because we got this spare parts and all that. Now so far as Bhilai is concerned, Bilay SMS is concerned again. It is back on rail in Bhilai sms. The converter which had the vessel changed. So after that actually there is a bit of problem because of which spillover of metal had taken place and it had burnt the electrical cables.
So that. And it was down for around 15, 20 days. Now it has come back. So the production at village steel plant has again picked up to its normal level of around 18,000 to 18,500 tons per day of hot metal. So it had impacted us around 15 days to some extent. Around 2000 tons per day was the impact in physical terms for around 15 to 16 days. Now it is completely alright. And in future also in quarter four, it’s not going to have any problem. So all our 5 ISPs are full blast right now. They are producing at the highest levels and this trend will continue for quarter four.
operator
Thank you. Before we move to the next question, a request to participants to please limit your questions to two per participant so that the management is able to address questions from all participants in the conference. The next question is from Pallav Agarwal from Antique Stockbroking. Please go ahead.
Ashok Kumar Panda
Yeah.
Pallav Agarwal
Good afternoon, Sir. So the first question was on the bridge EBITDA bridge from. In your presentation from 2Q to 3Q there you know, one of the negative things has been shown as the volume impact. But I thought sir, we had an increase in volumes compared to on a sequential basis. So any reason for that negative impact.
Ashok Kumar Panda
Due to volume production? Production volume? Yeah, just one sec. Between quarter two to quarter three.
Pallav Agarwal
Yes.
Ashok Kumar Panda
Yeah. That’s primarily because of the reduction in production of sellable school. Even if there is improvement in hospital and code sales to some extent. But Saleable still came down because of the reason that actually in the previous quarters at RSP New RST Mill, New Osteom has more capacity. So they were producing more by taking slabs from Bokaro steel plant. By taking slabs from the excessive stock of Bokaro steel plant. So right now, because in Bokaro Austin Mill has Picked up and everywhere it is picked up. So infrastructure stock has come down at Bokoro steel plant.
That is the reason why at RSP the salable steel level remained low. So that was the primary reason for reduction in salable steel volume in quarter three compared to quarter two. In quarter four all the five plants they have already increased their production because all the capital effort, everything is over. So all the mills are in full blast. All blast furnace as well as SMS they are at 100% level or more than 100% level. So availability of slabs for Rokula steel plant to meet the more requirement. The higher requirement of extension 2 will be there will be sourcing slabs from Bukar as well as Bhilai to Rokila to have that Delta production at HSM2 at RA Steel Plant.
So that was the reason.
Pallav Agarwal
Okay, so primly is because of lower saleable steel production, not the sales volume. So that’s led to.
Ashok Kumar Panda
Yeah, not. As you can see, sales volumes have picked up like anything. Despite having bed market it was around 16% growth in 9 monthly compared to 11 previous year.
Pallav Agarwal
Okay, so the other thing is, you know, the same thing. You know, input, price, cost. There’s a positive number. So is this. I thought coking coal costs would have gone up sequence. So we just clarify that as well.
Ashok Kumar Panda
I mean coking coal cost actually went up after December. After December. And. And it is also having a savings of the power cost in that coking coal partly and mostly because of the power cost. Because we are trying to reduce our power cost by sourcing it from RE power sources. So we’ve taken certain actions in different plant units and that has given rise to some savings.
Pallav Agarwal
So this should be structural, the saving going in.
Ashok Kumar Panda
Yeah, this is the structure. It’s a part of that and will further improve. We are working on that. It’s a requirement as well. RE power is a requirement for us as well as by going for RE power we are getting also price advantage in certain cases.
Pallav Agarwal
Sure, sir. Also if you could just. You know the NSL volumes you gave you mentioned for the nine months. Could you also just give us the quarter third quarter volumes?
Ashok Kumar Panda
Just hold on. 0.37, 0.37 million tonsa.
Pallav Agarwal
Okay, thank you.
Ashok Kumar Panda
Thank you very much.
operator
Thank you. Next question is from Rashi Chopra from Citigroup. Please go ahead.
Raashi Chopra
Thank you. On your realization, what was the exact change in realization sequentially? NSR.
Ashok Kumar Panda
Which one?
Raashi Chopra
NSR. NSR. What was the change from 3Q from.
Ashok Kumar Panda
Tokyo to 3Q from Q2 to Q3 in Q2 if you look at average NSR. So in average NSR there is a drop. In Q2 it was 48,836 but in Q3 it was 47,735. But if you compare between long and flat, in long it has increased from 48885 to 49021. In flat it dropped from 48790 to 46580. So there was a drop in NSR in flat as compared to long. So average NSR. Also there was a bit of drop.
Raashi Chopra
Then on the coking coal cost you mentioned that the jan Cost was 18,500. I assume this is your blended coking cost, right?
Ashok Kumar Panda
Not that is actually average. Yeah you’re correct.
Raashi Chopra
And what was that number in the third quarter?
Ashok Kumar Panda
Third quarter number was 18,351. Yeah. Third quarter number is 183 50.
Raashi Chopra
And on the capex you mentioned that in FY27 the capex is going to be 15,000 crores for this full year. FY26 what is the capex for the full year?
Ashok Kumar Panda
Initial guidance of 7,500 and then final guidance is 10,000 crores. It will be anything between these two.
Raashi Chopra
And how much has been spent in the nine months.
Ashok Kumar Panda
Nine monthly figure. Yeah, so nine monthly figure was 5,427. 28 crores. 5,428 crores. 5428.
Raashi Chopra
Got it. Thanks. This last question for me on the volumes, what are you targeting for this year and next year?
Ashok Kumar Panda
Yeah, just one sec. So this year if you see April to December hot metal volume is now 15.14 million tons. And by, by year ending we expect that is just one thing or sales.
Raashi Chopra
Just sales volume is good enough.
Ashok Kumar Panda
Let me complete this one. So year ending figure of hot metal could be in around 20.5 or something like that. Close to 21 million tons. So next year we’re targeting 22.5 million tons of hot metal.
Raashi Chopra
And on the sales side, on the.
Ashok Kumar Panda
Sales side let me tell you. Thank you. So sales volumes are on the higher side. And. So if my salable sale in nine monthly is 14.2 million tons and total sales volume in nine months is 14.6. So it is going beyond the production levels and we are reducing our inventory. Our inventory. Our inventory levels have come down in nine monthly. If you look at our inventory levels are down by around 0.3 million tons as compared to starting of the year both in in process as well as celebration put together. So further reduction will be there.
So going, going by this we’ll be able to achieve a sales volume around 19.5 year ending which will be more than the production.
operator
Next question is from Sumangal. Nivecha from Kotak Securities. Please go ahead.
Sumangal Nevatia
Yeah, good afternoon. Thank you for the chance. So first question is I want to understand at the EBITDA level is there any contribution from this arrangement of NMDC volumes nsl?
Ashok Kumar Panda
So let me tell you actually as I have already told in case of NSL products it is beneficial to NSL to sell as well as to the market players. So that is purely based on the arrangements we made. But mostly, mostly as I told you, it is just keeping a parity of the pricing strategies of sale in various regions. We are concentrating mostly on the south. We are concentrated mostly on the south. Over nine monthly concern. The quantities have already been told. So there are positive margins. However the margins are small, it’s not very high.
But it is giving a market stability. It has given a market stability. So all three fronts people have benefited out of this.
Sumangal Nevatia
Okay. And so this year when we are seeing about 60 not percent growth, I mean X of NSL it’s around 7, 8%. So the guidance X of NSL would be what 18 and a half million ton volumes for this year.
Ashok Kumar Panda
For this year 19.5 minus. Yeah, you’re correct.
Sumangal Nevatia
But 1 million times already done in the nine months. Right.
Ashok Kumar Panda
So 1 million is already done and in quarter four much of quantity may not come. So in a way if we end up, we try to end up at 19.5 sales figure. So it could be somewhere, our own figure could be somewhere around 18.5 to it. Around 18.5 or something like that.
Sumangal Nevatia
And where can we take. Got it, got it. And in absence of new capacity, where can this 18.5 go in say next two years? 27 and 28 in 2627.
Ashok Kumar Panda
Let me address this question for 2627. Pass. While in this year, in 2526 we are trying to finish hot metal at 20 point to 21 million tons. We are targeting 22.5, 22.5 for 2627. That means. That means you can say around, around around 21 million tons of cerebral steel in 2627. And. And then we can have further growth in 2017. Once we achieve this particular growth then we’ll have further growth in 2728. So you can say in 2720 it could be 23 million tons of hot metal and 21.5 million tons of sellable steel. And after that we will see that isp modernization will be there okay, okay.
Sumangal Nevatia
And this is X of NSL or including NSL 1 million ton this is.
Ashok Kumar Panda
X of NSL.
Sumangal Nevatia
Understood? Understood and so next year Capex we’ve substantially increased I think earlier it was around 10,000 now you’re talking about 15,000 so can you give a breakup and in this ISCO expansion how much are we spending and what is the time frame for the expenditure over next two, three years.
Ashok Kumar Panda
For next to this see the ISCO expand Capex total will be around 36,000 crores so from 2627 we’ll have major quantity amount coming from ISCO so ISCO amount could be in excess of it could be somewhere around maybe around 7000 to 8000 crores in case of ISCO so far as 2627 is concerned and after that they can pick up means the peak figure will be in 2728 and also in 2829 for.
Sumangal Nevatia
This score okay so so the completion could be towards the end of 29 or maybe FY30 as well, right?
Ashok Kumar Panda
If I not. Yeah somewhere around FY30 understood end of 29 or 30 something like that.
Sumangal Nevatia
Okay and sir, the coking coal cost which you shared so the increase in Feb vs 3Q average is just around 7, 8% is that the right comparison? Because if you look at the dollar price it’s gone up by more than 20% so have we got the numbers right? It is 19,700 versus some 18,000 which.
Ashok Kumar Panda
One you’re talking about?
Sumangal Nevatia
The coal cost Sir?
Ashok Kumar Panda
Yeah, coal cost.
Sumangal Nevatia
3Q versus spot can you explain us what is the increase?
Ashok Kumar Panda
The average CQ actually which we told it is 18,003 PT1 that is basically because of the averaging of the stock out here the supplies we are getting from time to time but the spot price have gone up this spot price is $251 that is index price and based on that actually we have 98%, 97% etc. From different different sources so these prices are getting reflected slowly and slowly partly in February and partly in March and also the effect is going to come in April as well as you know there is a time lag of around 1.5 months to 2 months for these prices to get reflected in the consumption okay and also also the dollar rupee parity is also impacting this.
Sumangal Nevatia
So on consumption basis what is the quarter on quarter increase? Because is this. Yeah can you explain that?
Ashok Kumar Panda
Yeah because quarter two, quarter two was 18158 and quarter three is 1851 there was not much of increase in quarter three but in quarter four you will find an increase of around 1500 rupees over quarter three is what I am guessing.
Sumangal Nevatia
Understood? Understood. All right. Thank you sir and all the best.
Ashok Kumar Panda
Thank you very much.
operator
Thank you.
Ashok Kumar Panda
Let that be the last question please.
operator
We have one more. The next question is from Tushar Chowdhury from Prabhudas Leeladar. Please go ahead.
Tushar Chaudhari
Yeah. Good afternoon sir. Thanks a lot for the opportunity sir, last quarter we sold around 1140 odd crores of sale of scrap. How much was this quarter Scrap and by products.
Ashok Kumar Panda
Let me just give that figure. Just one sec. Can you ask the next question before you take up the.
Tushar Chaudhari
Okay so Capex, you are saying 7000 to 7500 to 10,000 crores. For FY26 and 27 it will be 15,000 odd crores. Am I right on this? Okay, so there were some debottle making projects at dsp, rsp, BSP which we talked about earlier. Can you throw some light and how much Capex will do for them?
Ashok Kumar Panda
Yeah, so far as RXV is concerned they’ve already completed task number four and the production is going to start now. It’s already started over there so that part is over. So far as DSP is concerned the deportulating downfield project already started and that will take around 18 months 20 which.
Tushar Chaudhari
Uses TMT, TMT mill, TMT Miya which.
Ashok Kumar Panda
Is said the TMT mill. At the same time after TMT mill also we are starting one blast furnace over there we’ll knock up one old blast furnace, we’ll start a new blast furnace. So along with blast furnace we have another converter etc. So beyond TMB mill we have also approved another package for them and which will also increase the overall capacity of the fund by 1,1 million ton. So TMT is a mill which is 1 million tonnes and that is already activity already started. It will be completed in 18 months time, another 18 months time and this will reduce the semis to zero.
But after that overall capacity of hot metal and cool steel will increase by 1 million ton through another demodel taking activities in which we are going to put up one blast furnace, one converter and caster and we’ll knock up the old one. Coming to your. Coming back to your first question Q2 was 1140, now it is 1279, 1217.
Tushar Chaudhari
Okay and how much, how much is the finished steel inventory now?
Ashok Kumar Panda
So finish steel inventory sale as a whole, sell as a whole it is around 1.5 million tons and in process inventory is 0.9 million tons together 2.4 million tons as on 31st March it was 2.7 million tons.
Tushar Chaudhari
Okay, thanks. Thanks a lot sir. Thanks a lot.
operator
Thank you very much. We’ll take that as the last question. I would now like to hand the conference over to Mr. Ashish Kjriwal for closing comments.
Ashok Kumar Panda
Yeah, thank you sir. Just before closing, one question from me also. We are talking about 19 and a half million ton of sales volume guidance for FY26. So which means that. And in nine months we have already done around 16.14.6. So do you want to say that our fourth quarter volume will be more or less lower than third quarter or that because of 14.6 we have already done and we have done 5.15 in third quarter. So. Yeah, 14.5 is already done in 9M. And our Q4 volumes will be more than that of. More than that of Q3.
Only thing is that actually in case of NSL we may not take much of a volume from nsl. That’s the only consideration we want to sell as compared to the other one. So the NSL numbers may be less in quarter four as compared to. That’s the reason. But overall do you think that we can do five and a half million ton? Because if that happens then total volume will cross 20 million ton. Let’s see. We are trying a lot because as you can see in January also we had a stock reduction of around 0.3 million tons.
And February and March I’m expecting optimistically 0.3 0.3 million tons. So that’s the reason we will make endeavor towards that. Sure. And lastly when you are talking about average price increase of around 3,000 in tranches in Jan. So are you saying that we are going to increase further prices in February or it’s because the average price in January will be lower than the spot price? No, it is. There is an upward movement the market right now because of the coal prices. So as you said correctly, the guidance is that it will be upward. Okay, thank you so much also.
So sir, any closing remarks from your side? We’ll then end the call. Thank you. Yeah, thank you very much for all the Q and A session and all that. The second half of the financial year is always the best for seal industry. Things have already started looking up and we hope that the trend and momentum will continue. Meanwhile, steel demand is also significantly moving up and with the improvement on the efficiency front and cost control measures, it will improve the margins in the balance period of the year. That is quarter four, despite having the coal prices remaining high and there is a lot of inventory reduction in this quarter four and borrowings will go down drastically.
And because of reduction in the borrowings into the interest cost is going down. As you know, in nine monthly our interest cost has come down by 500 crores. We expect that another 500 crores reduction in inventory will additionally happen in quarter four. So overall for the year the interest reduction could be around. Interest cost reduction could be around 1000 crores. Also the company remains committed towards sustainable performance including emphasis on decarbonization, improving capacity utilization, value addition, reducing semis and achieving cost competitiveness. We are also trying to reduce the cost as well as improve the top line.
And you will find that in this particular year, your top line which was remaining almost at 1 lakh crores earlier, now it is going for a big number in this year. I thank all our investors for reposing faith in Steel Authority Funding limited And I am hopeful that the same shall continue in future as well. Thank you very much.
operator
Thank you very much on behalf of Noama Institutional Equities. That concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.