Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Steel Authority of India Ltd (NSE: SAIL) Q4 2026 Earnings Call dated May. 16, 2026
Corporate Participants:
Ashok Kumar Panda — Chairman and Managing Director
Analysts:
Ashish Kejriwal — Analyst
Unidentified Participant
Sumangal Nevatia — Analyst
Pinakin Parekh — Analyst
Raashi Chopra — Analyst
Pallav Agarwal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Steel Authority of India Limited’s Q4FY26 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 conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr.
Ashish Kejriwal from Nuvama Institutional Equities. Thank you. And over to you, Mr. Ketchriwal.
Ashish Kejriwal — Analyst
Thank you, Michelle. Good morning everyone. On behalf of Noama Institutional equities, we again welcome Dr. Panda and his team for giving an opportunity to host this conference call. We are delighted to have Dr. Ashok Panda who has now become Chairman and Managing Director of SEAL with an additional charge of Director Finance. On behalf of investors community, we congratulate you sir for this and we wish that CL will achieve newer heights in terms of financially as well as operationally under your leadership.
And we would also like to mention that we are privileged to have Sri TN Natarajanji, Director Commercial who will also be there on the call today. So without further ado, I would request Dr. Panda for his opening remark and then we can open the floor for Q and A. Over to you sir.
Ashok Kumar Panda — Chairman and Managing Director
Yeah, thank you Mr. Asis and everybody connected through this. Let me give my remarks first then we can start Q and A session. Good morning once again everybody. I welcome all our investors and analysts who are joining this result. Concur for the financial results of sale for the quarter Q4 and annual FY 2526. Before we move to Q and A session, let me brief you on the results for the period and let me go one by one regarding economic scenario. Beginning with global economic scenario. The geopolitical situation in the Middle east has set the otherwise stabilizing economic scenario again bringing uncertainties and volatilities to all of us.
The economies across the globe have suffered with most seeing the projection being reduced by almost all major financial and analytical. Accordingly, the projections for global GDP have been reduced by IMF and similar agencies for calendar year 2026. Though projections for current year 2026-27 are at slightly higher level than the previous year, they are still below 2425 levels. The projections for India also remain raised bound between 6.5% to 6.9% by various agencies. So far as global steel industry is concerned, the landscape for the global steel industry is influenced by economic trends, trade policies and geopolitical situations as well as technological advancements.
The positive movement which was visible during the previous quarter may again get impacted while the production in Iran have already been impacted to push out of the top 10 countries globally. WSA has however not published its SRO since October 2024. But of course the steel industry globally is impacted and especially impacted because of this state of homose situation in terms of fuel constraints as well as in terms of raw material movement through that port. Indian steel industry, when we talk about that Indian steel industry continues to enjoy robust demand for steel with the consumption during FY25 26 which has grown by almost 8% over the same period last year.
The growth in production of crude steel has however been at 11%. The steel industry has grown by 8% but the growth of production is 11%. That’s the reason why during last year actually export numbers were pretty high. India finishes FY2526 as a net exporter with exports marginally higher than the imports. And the exports have grown by around 36% and degrowth of imports is around 32%. And in terms of absolute numbers they are almost matching 6.5 million tonnes versus 6.6 million tonnes. So it’s a balancing figure.
When we look at our company performance, company performance of sale. So there is growth in total production. And when we talk about quarter four of this 2526 crude seal production grew by 4% to stand at 4.9 million tonnes as against 4.7 million tons in the previous year quarter four. And sales volume has also grown by 4% to 5.3 million tonnes in this quarter four. And sales turnover has also grown by 5% in quarter four to 30,541 crores. That’s the thing. Profitability has also improved by 48% in PBT and 48% in PAT terms as compared to quarter four of last year.
There is a debt reduction of 3200 crores alone in quarter four of 2526. That is about quarter four performance. When we look at annual performance of 2526 for Steel Authority Ltd. Crude steel production has grown by 1% from 19.2 million tons in FY 2420 to 19.4 million tons in FY 2526. But salable steel has grown by around 7% from 17.9 million tons in FY 2425 to 19.2 million tonnes in FY 2526. Company has posted highest ever sales volume at 19.9 million tons. Almost like 20 million tons which marginally, I mean it is close to 20 million tons.
With a growth of 11% as compared to the previous year the production has grown by 7% but the sales has grown by 11%. That’s a very good sign and it has resulted in huge inventory reduction and reduction in borrowings. The sales turnover is close to 1 10,000 crores in this year which has grown by 8% compared to the previous year. And stock reduction is around 0.9 million tonnes out of which 0.4 million tonnes in sellable steel category and 0.5 million tonnes in in process steel category. In totality it is close to a million ton.
Reduction of inventory has taken place on the back of good amount of sales quantities. That is the reason why the borrowings have also come down by around 8150 crores in FY25 26 which has given sterling advantages in terms of finance cost to us. Even the cost of borrowings have also come down from a level of 7.3% in the previous year to 6.2% this year. This has also given rise to improvement in the interest cost for all of us. So with all these PBT profit before tax for 2526 there is a growth of.
There is a growth of 44% and in PAT PAT numbers the growth is 51%. This is highlighting operational efficiency, liquidation of inventory cost optimization, sales volumes etc. So these profit numbers are purely from the from the basic operations and sales of this company and good efforts made by the company. And I would like to say last year actually we had. We had real price revision area into the profit but this year there was no area into the profit. Still we have exhibited more than 50% increase in pack as compared to the previous year.
So that shows the potential sale has to take it forward going forward. The domestic market remains steady on both demand and price fronts. Of course it keeps on changing from month to month on seasonal effects and the sentiments with the coal price remaining in range bound. Coal price is remaining on the higher side range bound. Actually we hope that the margins will continue to improve. Further the company will continue to take actions on efficiency improvement and cost reduction front as well.
Because of this depreciation of rupee with respect to USD and international steel prices are also firming up right now. So we believe the steel prices will remain at this level and the margins will remain good during 26:27. And one more important thing for all of us is that after pretty long time, many years and decades, you can say that the balance sheet of 2526 is totally clean. Clean from the qualifications. There are no qualifications in the balance sheet after pretty long time. So we’ve taken care of those qualifications in terms of the developments and wherever required, provisioning, etc.
So entire balance sheet is clean from the qualifications. That’s the major thing happened during this year 2526 with the efforts of the finance fraternity. With these words I hand it back to Mr. Kejunwal ashes Kejunwal for opening the Q and A session.
Questions and Answers:
Operator
Thank you very much sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press Star and one on the touchtone phone. If you wish to withdraw yourself from the question queue you may press star and 2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press Star and one to ask questions. The first question is from the line of Chaitanya Iyer from Goldman Sachs.
Please go ahead.
Unidentified Participant
Hi, Am I audible?
Operator
Yes, please proceed.
Unidentified Participant
Hi. Thank you so much for the opportunity sir and congratulations on a great set of numbers. So the first question is on lines of the. What would be the sales volume guidance for the next two FY’s that is FY27 and 28 and you know other CapEx has picked up in FY26. Can you give an update on the expansion three plants and what would be the CAPEX guidance for the next two FY’s?
Ashok Kumar Panda
Yeah, thank you for your question. Actually sales volume last year as I said was around 20 million tons. So this year we’re expecting 22 million tons. That is the kind of target 10% in the higher side we’re keeping it and we are geared up towards that. That is number one answer to your question. Number two is capex. Capex in 20 by 26 we ended up, I mean target was 10,000, we ended up around 9100, something like that. Guidance for 2627 is 15,000 crores. And since our expansion projects are ongoing in different, different plans.
So in 2728 the capex figures will be in excess of 20,000 crores. That is our expectation so far as expansions are concerned? Actually we’ve cleared for three plants. One is Isco steel plant wherein major packages have already been tendered out and palmed up. So another one is Bokoro and third one is Bhilai which. So we’re just clearing this now.
Unidentified Participant
Thank you so much. And the second question was undertones. So as you mentioned we saw the impact of downward revision in yield prices. Can you please let us know if there is any further scope of such downward revision in the near future? And you know for on the Bokaro steel plant, can you detail out the factors which were behind the sharp recovery in EBITDA quarter on quarter for that plant?
Ashok Kumar Panda
Yeah. Let me tell you the first question first. The first question is about real price actually during 2425 we had the areas of last previous two to two years. So that was factored in the profitability of 2425 which was to the tune of around 18 crores. But in 2526 there was no such real price revision areas. I mean 24 as of now actually we are running with the provisional price of 2425 and 2526. That takes some time at government level. So 2425 rail prices will be finalized which will have its own effect in a 2627 financial year.
So that’s about rail price and rail prices keep changing actually depending on the imported floor prices as well as the efficiency levels. So sometimes if they go up, sometimes they go down. So in 2526 and going forward 2627 the provisional prices are on the lower side. So in spite of having those lowers on the lower side in 25:26 still we could post a profit which is with the growth of 50% on the excess of 50%. Coming to bokeh numbers Bokaro actually in 2526 they’ve improved because in 2425 they had a lot of breakdowns and they had a hostive mill which is a parent mill.
It was under capital repair for one month but it got extended by two months. So in 2425 that problem as well as coupled with flat steel prices down downward. On the downward side, so Bokoro had a negative figure in 2425 but these were not the cases in 2526. In 2526 things have improved that issues in SMS still melting stuff. In 2425 all these things have been taken care. So in 2526, in H2, in H2 happily two things have improved and they’re Looking up in terms of production, in terms of sales volumes as well as because they’re in flat products.
So NSR is much better. So that is why there is been a lot of improvement in broken steel fund EBITDA levels. And that will continue and do. They will still do better in 26:22. That is our expectation.
Unidentified Participant
Got it. Thank you so much sir. I’ll get back to me.
Operator
Thank you. We’ll take the next question from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.
Sumangal Nevatia
Yeah, good morning and thanks for the chance. Congratulations on very strong performance. First question is on the prices and cost. So if you guide. If you could guide what was the realization in 4Q and basis April and May what is your expectation of increase in prices or NSR in 1Q27.
Ashok Kumar Panda
Yeah. So in quarter four NSR of average NSR of long products was 53,400 rupees and flat was 51,000 rupees. When we compare this with April and May. In April NSR of long products is 57,600 rupees. And NSR of flat is 56,700 rupees. In May, mid month expected May long NSR is 57,000 same level 800 rupees flat also 56,000 rupees. So that means as we can see there is an increase of around 4,000 rupees between quarter four and April to May in the sales price.
Sumangal Nevatia
And sir, similarly for cost also mainly coking coal cost
Ashok Kumar Panda
When we look at actually in quarter four the coking coal average price is rs18200 which has gone up in April and May. April Average price is 21,000 rupees and May average price is 21,800 rupees. So there is an increase of around say 3,000 rupees, 3,400 to 500 rupees in coking coal prices.
Sumangal Nevatia
Okay. And sir, I mean this is the purchase. So in the results in the coming quarter which will be on consumption will the same increase reflect or it will reflect over a next quarter?
Ashok Kumar Panda
No, it is there actually because the appellant may prices are the procurement prices but that will get blended with the stocks that we are holding. So depending on the stock stock level is around 30 days stock actually. So stock prices are less. So the impact will be little less as compared to the procurement prices in this.
Sumangal Nevatia
Okay. Okay. And so generally given the Middle east issue and overall inflation, any other cost item influxes are something where we are seeing inflation in cost.
Ashok Kumar Panda
See the increase could be There in terms of so far as sale is concerned, so far as steel authority is concerned will have some impact with respect to the fluxes, limestone etc. Which we are buying from Dubai. So there the landed cost, CFR cost is going to go up because it was around say 23 $24. Now it will be around $35. But overall overall in sellable still its impact will be hardly 100 or 200 rupees. So it is more of a raw metal security than the price increase. We are working towards tying up with the parties to get more quantities from Middle east through diverted routes and so far as fuel is concerned.
So fuel concern was there in quarter four but we have come out of it by using PNG in certain locations and creating LPG banks in other locations. So that’s not going to be a major challenge for us in quarter one.
Sumangal Nevatia
Understood. So my second question is on CapEx and employee cost. So one is employee count is reducing at a very good pace. So if you could guide based on the superannuation what is the outlook for 2728 and given the pay commission revision also which is coming up, how should we look at fuel cost in. Sorry employee cost in FY27 and 28 both years.
Ashok Kumar Panda
See two questions to this. One is employee numbers are going down today we are at around 50,000 employees. Just one sec. Do you have the numbers? So just one sec. I’ll give you the numbers as well. So that’s the reason why. So as in 1st April 2026 the numbers are 49,752 as compared to 53,159 opening of this year. So reduction of around 3,400 numbers. So this is giving us advantage in terms of salary, wages, numbers. But the other things are the normal increments. Then the gratuity, etc. Ceilings have increased.
So that is also adding pressure to it. But if you look at the employee remuneration in the P and L account there is a decrease of around 200 to 300 crores as compared to the previous year because of various reasons for that. One is the number issue, the other one is leave encasement. Many of the things that contributed towards that and as we look at, I mean similar numbers will be reduced also in 2627 and 2728 means around 3400 to 500 numbers will be reduced in each of the years next two years but there will be some influx of material, I mean influx of people actually through induction phase induction at lower levels.
So every year there could be increase of around say 300, 200 numbers because we are also expanding. And on the top of that actually we have taken out a VR scheme right now. So which is aiming at reducing number by 500 2000. So that is our target. So in that process also separation will take place and numbers will come down. So far as pay division is concerned that will be applicable from 1st January 2027. Guideline is yet to come from government business because the committees are yet to be formed.
So we’ll see with the kind of guideline which will come from there actually then we’ll have a look at that in the quarter four of this year and we are ready to take absorb those cost depending on the guidelines which will receive from government pay commission. Okay,
Sumangal Nevatia
So so this 11,400 crores, where should we see this flattish level for 27?
Ashok Kumar Panda
No, it is going to go down actually this year. How much is it? 11,005,89 I think so in 2526. So there will be further reduction of manpower. So I think this number will further come down this year. Of course we have VRs. We’ll have VRs. So because of VRs there could be some impact. But on the overall you can see, you can think that either it will come down a little bit in 2526. It is actually 11,392. It has come down. I am expecting that it will further come down in 26:27 despite having BRS impact.
Also because the overall overall strength will come down by 3,000 odd.
Sumangal Nevatia
Got it. And so in this year’s volume, what is the NSL volume in fourth quarter and full year? If you could just share
Ashok Kumar Panda
NSL volume totality is 1.12 million tons. And fourth quarter actually it is pretty less. Maybe around 0.1 million tons or something like that. Because we have kind of discontinued their product selling because they are on their own right now. So we started selling based on the request from RINL. So we have started selling RNL products. NSL fourth quarter is 0.48.
Pinakin Parekh
RNL
Ashok Kumar Panda
Is 0.48. So that’s what it is. Actually most of this sales of NSL was in 9 monthly and only bit of quantity in January. That’s all. So right now NSL they are selling on their own.
Sumangal Nevatia
So third party RNL NSL put together fourth quarter is half a million ton.
Ashok Kumar Panda
Four quarter numbers are only 48, 50,000 tons. That’s all because RNL which is started in the month of February after doing the agreement etc. So now it is picking up.
Sumangal Nevatia
Okay. And sir, for 27 also it will be at a very low level.
Ashok Kumar Panda
2627, you’re talking about 2627.
Sumangal Nevatia
Yes.
Ashok Kumar Panda
So in 2627 RNL products will be sold to the tune of around 0.6 million tons or 0.7 million tons. It will increase for RINL.
Sumangal Nevatia
Okay. Okay. All right. So sir, if you adjust this, our volumes are close to 19 million tons. So this 19 million ton which is our own volumes that we are expecting to go to 22, is that the right way to understand?
Ashok Kumar Panda
Yeah. So last year we sold around 19.9 which is around 20 million tons. If you take out 1 million, it is 19 million tons for us. So the 19 million tons were targeting to go to 22 million tons in this year.
Sumangal Nevatia
Okay. And just one last question if I can. The CAPEX is almost doubling this year. So are we in a position to disburse so much from say 8,000 odd into 15,000 crores in FY27?
Ashok Kumar Panda
Yeah. Last year our capex was around 9,100 crores and this year we are expecting 15,000 crores. And we’ll be dispersing because this will be partly. This will partly for the debord making projects, partly for the AMR projects as well as partly for the expansion projects of east coast steel plant. We are, we are ready for that. That is what is required.
Sumangal Nevatia
All right, sir, thank you so much and all the best.
Ashok Kumar Panda
Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to only two per participant. Should you have a follow up question, please rejoin the queue. We’ll take the next question from the line of Pratik Singh from IIFL Capital. Please go ahead.
Unidentified Participant
Hi sir, thanks for the opportunity. The first question, just a clarification. In 4Q when you said RINL it’s 0.48 million ton or 48,000 tons.
Ashok Kumar Panda
48. 48,000 tons.
Unidentified Participant
Okay. And 0.6 to 0.7 million ton guidance for RINL in FY27. That is on top of 22 that we are seeing right now. Is that correct?
Ashok Kumar Panda
No, it is within that. It is within that. 22
Unidentified Participant
Includes 6.7. Correct. Okay, so. So just get a sense as to what’s our crude steel capacity right now. I mean used to think that it’s around 2021 but now we’re talking about selling more than that. So as we speak right now, what’s our code steel capacity and how do we see it going in 27 and 28.
Ashok Kumar Panda
Yeah, actually last year we produced around 19.43 million tons of crude steel. Our capacity is 21 million tons and we are targeting to produce 22 million tons in excess of, I think it is 22.5 million tons so far as our target is concerned for 2627.
Unidentified Participant
So this is without any capacity addition just from debottle leaking. We think we’ll be able to. This is through debottle
Ashok Kumar Panda
Making and making 100% capacity from the facilities that we have.
Unidentified Participant
And when will the new capacity be coming online sir, for any further growth
Ashok Kumar Panda
And new capacity start coming after three years from now means from 3031
Unidentified Participant
We can assume that the 27 volume number will lastly remain same in 2829 as well. I
Ashok Kumar Panda
Mean actually what is happening is through deep bottling, not exactly the bottling through operational efficiencies. We are trying to stretch beyond the capacities. So when we are looking at 22.5 million tons this year this can again increase to 23 million tons going forward. So we have own efficiency levels through which we can, we have more flexibilities and efficiency levels through which we can stretch beyond our capacities. So that happens with all the facilities we just stabilized.
Operator
I would request you to kindly rejoin the queue. Follow up.
Ashok Kumar Panda
Yes,
Unidentified Participant
Okay,
Operator
Thank you. Request to all the participants to kindly limit their questions to only 2. Should you have a follow up question please rejoin the queue. The next question is from Pinakin Parekh from hsbc. Please go ahead.
Pinakin Parekh
Yeah, thank you very much. So my first question is if you can give us the slightly medium term capex outlook. So you said this year is 15,000 crores. It will step up further. So over the next three to four years what is the capex that SEHL plans to spend and how will those ramp up?
Ashok Kumar Panda
Yeah, this capex for 2627 is 15,000 crores which is going to go up as we progress in our expansion. As I told clearly our expansion in ISCO is in the advanced stages. They have been formed up and so the groundwork is going to start over there. As the groundwork starts over there that the expenditures will be done and the expenditures will start increasing from 2728 onwards. Bit of that will come in quarter four of 2627 and followed by that the Bogaro and then the Vilai is going to join. But there the expenditures, majority of the expenditures will come maybe from 28:29, this is what I’m guessing.
So that means actually in 2627 we’ll spend around 15,000 crores. In 2728 it can be around 18,000, 19,000 crores. And after that this will go towards every year almost 20 to 25,000 crores. When expansion in these three plants will will have its own effect. And we will manage through our fund management activities.
Pinakin Parekh
Got it, sir. And so my second question is that the employee cost guidance that you have given. This would not include any provisions you will be making in Q4 for the wage revision. Right? Historically, wage revision has been around 15 odd percent or so. So that will be over and above whatever guidance you’re giving.
Ashok Kumar Panda
So as I told clearly, actually government notification etc. Will come regarding pay division. And after that we’ll make a provision in quarter four of next year 26, 27. So those figures will be known only when we get the guidelines. And that will be over and above the figure that we are talking about now.
Pinakin Parekh
Thank you very much.
Ashok Kumar Panda
Thank you.
Operator
Thank you. The next question is from the line of Darshan Mehta from Dollar Capital. Please go ahead.
Unidentified Participant
Hello. Yes. Thanks for giving the opportunity. Sir. My first question was if I see the PPD, I can see that our co cred has basically improved by almost 20kg in last two years. So I understand that part of it could be due to high pci. But is there any other thing which I am missing. Like have we improved on grades or something? Or can you explain the reason?
Ashok Kumar Panda
Yeah, the reason is actually reduction in CO grade is because of increase in PCI as well as by increasing oxygen enlistment in the blast furnaces. So these are the two vices we are using whereby we are trying to reduce the cocreate. Even if the coke rate has come down by 20 kg etc. Over the years. But we are still not satisfied with that. We need to. We need to reduce further by 20 kg. In 2627.
Unidentified Participant
In 2627 you are saying your goal is to reduce this by more 20 kg. You are saying. Yes,
Ashok Kumar Panda
Yes, yes.
Unidentified Participant
Okay. Okay. And in terms of just continuing on that even in terms of BF productivity, I think it has improved considerably over last two years. So what has been the reason for the same.
Ashok Kumar Panda
The reason is because of the operation operational efficiency in the furnaces as well as by closing down the inefficient furnaces and ramping up production from the bigger furnaces. These are the two reasons.
Unidentified Participant
Okay. So you say basically the smaller furnaces you are. You are producing more from the bigger furnaces. Is that what
Ashok Kumar Panda
We have closed down the smaller furnaces and started ramping up from the bigger furnaces. These are the reasons.
Unidentified Participant
Okay. Okay, sir. And sir also, I’m
Operator
Sorry to interrupt you. Sir, please join the Q. Sure,
Unidentified Participant
Sure. Thank
Operator
You. We’ll take the next question from the line of Rashi from City group. Please go ahead.
Ashok Kumar Panda
Thank
Raashi Chopra
You. Just to understand a
Ashok Kumar Panda
Little
Raashi Chopra
Bit on the volume side. What is your current capacity utilization?
Ashok Kumar Panda
Volume side, as I told you, actually our capacity is 21 million tons of crude steel. But our target is 22.26. 27.
Raashi Chopra
To understand this correctly, you in the 22 million times you have 0.6 from.
Operator
I’m sorry to interrupt you. Your voice is not clear. I would request you to kindly use your handset.
Ashok Kumar Panda
22.5 million tons. 22.5 million tons. That includes 0.6 million tons of INL as well.
Raashi Chopra
So on a like to like basis, purely volumes from sale. If I just remove RINL and NMC volume this year you are at about 18.8 million tons of sale and your sales. And you’re essentially saying that pure sale volumes will go from 18.8 million tons to upwards of 21 million tons in this year. Yeah. Rather I’m saying that
Ashok Kumar Panda
It will go from 18.8 or close to 19 million ton. From 19 million ton to 22 million tons. That is our target. Excluding NMDC, NSL and RINL.
Raashi Chopra
So 22 does not include RINL.
Ashok Kumar Panda
No, 22 doesn’t include RINL.
Raashi Chopra
Okay, so that’s 22.5
Ashok Kumar Panda
Includes RNL.
Raashi Chopra
Understood. Got it. Okay. And just what was the blend you gave the NSR for long than flat Separately, what was the blended NSR for the quarter?
Ashok Kumar Panda
Blended NSR for the quarter four is 52000 rupees per ton. And in April it is around 57000 rupees. April and May.
Raashi Chopra
Okay. And just one last question for me. On the Capex you mentioned Isco, Bukara and Vilai, what is the. What is the capex for each of these projects? Like if you have to break it down, Escobar and delay.
Ashok Kumar Panda
Capex of ISCO is around 36,000 crores. Maybe 35,000 crores. And Bhilai which is yet to be announced is around 30,000 crores. And Bokaro is somewhere around 18,000 crores. Something like that.
Raashi Chopra
And what will be the corresponding capacities?
Ashok Kumar Panda
Corresponding capacity in ISCO is around 4.5 million tons. At Pillai it will be around 3.5 million tons. Also will be around 3 million tons.
Raashi Chopra
Understood. Thank you.
Operator
Thank you. The next question is from the line of Pallavagarwal from Antique stockbroking. Please go ahead.
Pallav Agarwal
Yeah, good morning. Congratulations on a good set of numbers. So this one I think in the EBITDA bridge in the presentation I think there is some raw material saving also you know between the third and fourth quarter. So could you just quantify, I guess it’s primary from coking coal cost. So could you just you know quantify what was the coking coal consumption cost in Q3 and Q4?
Ashok Kumar Panda
Yeah, between Q3, between Q3 and Q4. Raw metal you mean to say what in price it is negative actually in Q4 the prices of coal was more as compared to quarter three and it had an impact of 272 crores. But so far as raw metal usage is concerned because of better usage in quarter four we’ve gained around 429 crores. So it has offset the impact of input price increase.
Pallav Agarwal
Okay. This is because of lower, higher PCI and more oxygen. Because
Ashok Kumar Panda
More oxygen, higher PCI and better usage of iron ore, etc. And quarter four being a dry month and production remaining pretty high, all equipments are good in quarter four after capital repair. So performance has been better operational efficiency you can say because of that reason.
Pallav Agarwal
Sure sir. Also, you know, in terms of our iron ore mines, so is there any risk to our mines expiring 2030 or you know we, we will not face that problem of the different lease periods for our.
Ashok Kumar Panda
We don’t have measurements problems. This to our minds and the productions are going to go up because last year we produced 38 million tonnes while this year we have kept a target of 56 million tons out of which some quantity will be sold. And going forward we are trying to ramp up to 80 million tons. So major issues are not there. There are stray cases, stray issues those we are taking up so far as renewals are concerned. Major renewals, no issues except the Chidia thing which everybody knows about it in Syria mines.
We are looking at getting that mining lease. It’s not a renewal actually, it’s a new mining lease. So that would enhance our capacity. But notwithstanding that today whatever mining capacity we have, we are going to ramp up and our mines are quite good enough. And there are no renewal issues in that? No major renewal issues in those.
Pallav Agarwal
Sure. Yeah. Thank you.
Operator
Thank you. We’ll take the next question from the line of Ritesh Shah from Investec. Please go ahead.
Unidentified Participant
Yeah. Hi sir. Thanks for the opportunity. So there are three questions, sir. First question is is there a way in which a government can allocate iron or lease to any company this is given post MMDR auctions is a way. But is it. Is it possible? Say if there is some backward district. Government can allocate iron ore mine to a company.
Ashok Kumar Panda
Government can allocate a mine through auction process to. To any private company through NPP process. So there is a set procedure for that. They can do that. So far as allocation to publicity is concerned, it forms a different way. The methodology is different. Everything is different.
Unidentified Participant
Right? Sir, I didn’t understand. You said for private sector allocation is possible. Allocation
Ashok Kumar Panda
Is possible through auction route.
Unidentified Participant
Through auction route only. Okay. Okay. Yeah. Sir, my second question is. Sir, you indicated on rail price revision with the benefit likely to come in FY27. If. If you had to look at say spot prices or look at the average pricing. Is there a number that you would like to give out? How much could be the benefit because of real price revision in FY27?
Ashok Kumar Panda
Say that. Actually what I said is that in 2425 we had rail price revision area of 1800 crores which had gone into the P and l account of 2425. In 2526 there is no real price revision area. So in spite of not not having 1800 crores advantage in 2526 still we posted 50% additional profit as compared to 2425. So far as 2627 is concerned, we can’t say anything about whether we’ll get an advantage from rail price revision or we’ll get a negative on rail price revision. So things are not very clear at this point of time.
Unidentified Participant
Perfect. And sir, just last question. You indicated flats and long sizes at 51 and 53,400 for Q4. Just wanted to understand how much was the price increases that were taken in the month of March.
Ashok Kumar Panda
The month of March. In the month of March, long price. Long spices were 55,500 and flat was 52,778. With.
Unidentified Participant
Sir, I’m asking the price increase which happened from 1st of March to say 31st of March. Because there might be the benefit which will come into Q1.
Ashok Kumar Panda
So it is around 1400 rupees per ton.
Unidentified Participant
So that is for longs and for flat. Sir,
Ashok Kumar Panda
For flat it is 1400 rupees
Unidentified Participant
And for longs
Ashok Kumar Panda
1500 rupees.
Unidentified Participant
Okay, fine. Thank you so much for the answer, sir. Thank you.
Operator
Thank you. The next question is from the line of Partev Chonsa from Anandradi. Please go ahead.
Unidentified Participant
Hi. Good morning, sir. Thank you for the opportunity. So my first question is pertaining to your debt levels. Now considering that you Know you are in one of the best state of balance sheet and after many, many years and you know, you just indicated that, you know, next year 27, your CapEx is 15,000 and eventually going to 20, 22,000 over next couple of years. Considering you know your cash flows are at similar levels, would it mean that you’ll be funding a lot of these capex? You know, apart from intel accrual, majority of the capex would come in through debt basically over next couple of years.
Ashok Kumar Panda
Yeah, let me tell you that actually we’re trying to ramp up our steel production as well as the sales and on the face of a good market we will try to improve our profitability. We’ll have focus on cost reduction as well. So going forward in 2627 the CAPEX guidance is 15,000 crores. Suppose it happens 14,000 or 15,000 crores. We will see how to meet it from the internal accruals because that is my, that is our personal target. So that means in other words actually we will try to improve our profitability to a level in which the cash flows will be better.
Means the profitability plus depreciation will give us a cash flow which probably will be able to take care of this year’s capex to a, to a large extent. But going forward, going forward the same level of profitability we are trying to maintain and beyond that the incremental will come from the long term loans.
Unidentified Participant
Okay, but you’re considering the cash flows, considering the cash flow sustained at the current level with the same kind of steel prices. Right. If by any chance the steel prices go down maybe in next, you know, couple of quarters or couple of years down the line then though I think your balance sheet would have to, you might have to borrow higher quantum right at the end of the day.
Ashok Kumar Panda
So that’s what I’m telling. Actually we are trying to increase our profitability on an average over the years because during the year in different quarters steel prices travel differently and it is not only a journey of steel price, it is journey of steel price as well as coal price. And on the top of that our own operational efficiencies. We will be focusing more on the operational efficiency as well as on the special steel component so that we will ramp up our kind of profitability as well. So this profitability on an average over the year, over various quarters in the year should remain at a high level by which we can fund our capex through internal equivalent.
This is our expectation in this year and we are working towards that.
Unidentified Participant
Okay, so my second question is pertaining to your guidance. What you have basically given at 22, 22 and a half million ton, theoretically speaking, you know, you are at a 21 and a half million ton kind of a, you know, installed capacity. Even if, you know, you take a couple of minutes of debottle nicking, you know, the capacity utilization will be over 90, 95% which is practically unheard of in the industry. You know, how do you basically justify that? You know, at 21 and a half or maybe 22 and a half million ton, you’re going to do over 100% kind of a utilization when theoretically it’s not possible.
Ashok Kumar Panda
See actually in steel making and iron making actually theoretical calculations do not hold good. This is what we have experienced over time. By giving better enablers and raw metals the BA productivity, blast furnace productivity levels, they go much beyond their DPR capacities. If DPR said it is 2.3, they can easily go to 3.3 productivity. This is what is happening with us, with JSW, with Tatasil and everybody. So there is per se no theoretical capacity for a blast furnace or steel melt shop. It is only enablers and the raw metal and the practices which we improve by which we can easily go beyond 100%.
And we have already seen in the past and more of such things will be exhibited going forward in the future.
Unidentified Participant
And any threshold limit for the net debt to equity or leverage, if you can give
Ashok Kumar Panda
Our net debt debt issue, equity right now is around point three three. Right now it is zero point three seven. And as you said in this year we’re trying to improve our profitability by various actions and debt level should not increase in this year. This is what we are looking at. So if that Is so, then 0.37 will further come down in 26, 27 if that happens so that it will give a good room for huge caps going forward.
Unidentified Participant
That’s quite helpful sir. Thank you so much and best of luck.
Ashok Kumar Panda
Thank you.
Operator
Thank you. The next question is from the line of Rajesh Majumdar from 361 Capital. Please go ahead.
Unidentified Participant
Yeah, good morning sir and thanks for the opportunity. Sir, my first question was on the sharp reduction in debt in this quarter. It has been achieved on account of some liquidation of inventories. So looking at this sharp rise in steel prices and the forthcoming monsoon season, do we anticipate that there will be some inventory buildup now which will lead to again working capital rising a little bit in the coming months?
Ashok Kumar Panda
Yeah, what we’re looking at actually we are personally looking at no increase in inventory during Quarter one. But that is a wish list. It again depends on the market conditions and geopolitical situations. We are looking at 00 in quarter one. I mean let’s look at that. Let’s see how it works out. So quarter one after quarter one quarter two becomes little sluggish and again it will start picking up from quarter three onwards. So quarter three and quarter four will have good amount of inventory reduction.
So quarter two will be quite challenging as compared to quarter one. We are making our strategies towards that to see how less increase of inventory can take place during quarter one and mostly in quarter two so that all of that can be taken care of in quarter three and quarter four. We attempt will attempt it for the reduction in inventory.
Unidentified Participant
And sir, my second question is on the stainless steel setup we have. They are still bleeding and we don’t have any plans of expansion. So do we have any plans on Salem? What do you want to do with this asset?
Ashok Kumar Panda
Yeah, so far as Salem is concerned they’re bleeding as you’re correct. But we’re trying to. We have got a plan to reduce the bleeding and improve the EBITDA levels over there. So there the main concern is the operational efficiency in the CR mill. So in CR mill where the yield right now is only 84 83% we are trying to increase it to 90%. We have taken couple of other actions like replacing LPG with PNG which has given quite good benefit. And we are trying to take replace costlier power with CH deeper sources also.
That is number, number three thereby the cost of production will go down. Number four is we are trying to ramp up the production of the mills because the mills have these spare capacities. CR mill and SR mill they have got the spare capacity as compared to sms. So we’ll be feeding stainless steel slabs from imported sources to increase their capacity their production. So the management guidance is to increase the production from Salem steel plant whereby the losses will come down and more availability of stainless steel will be there in the market.
Once that happens then we’ll have a look at further expansion over there if it is feasible.
Unidentified Participant
And visl.
Ashok Kumar Panda
Visl. Right now it is in that list of disinvestment. So we are looking at getting a comfort from the government. After that we’ll have some plan for specialty still.
Ashish Kejriwal
Okay, thank you.
Operator
Thank you ladies and gentlemen. We’ll take that as the last question for today. I would now like to hand the conference over back to Mr. Rashesh K. Trival for his closing comments. Thank you. And over to you.
Ashish Kejriwal
Yeah, thank you Michelle. Thank you. Everyone. Sir, quickly last question from me. Two things because the kind of price increase which we have seen in till April and to mention that you know may was more or less, I can say rollover from April. So by looking at the current prices do you think that there is a possibility of some kind of demand slowdown or buyers are resisting the price hikes as well as the way government capex is. Government capex has been there in fourth quarter. Do you think that there could be a possibility of some slowdown in that especially in the environment on the back of this Middle east crisis.
That’s one. And secondly on in terms of cost you have mentioned about the cost increase of coking coal in first quarter. But overall cost guidance, if you can help us, you know what kind of cost increase you are witnessing in first quarter versus fourth quarter that will be helpful. Thank you.
Ashok Kumar Panda
Yeah. So let me give my explanations for the first one is demand. Generally demand remains muted in quarter one quarter two as all of us have seen because on the back of more sales in quarter four. So there are events of destocking in quarter one which is taking place and this time also it is there. So price levels are almost the same level because international the price are going up and dollar versus rupee also it is depreciating. So landed cost is remaining pretty on the higher side. So far it’s flat price are concerned we have a safeguard duty in place also that is why lended cost of imported goods is less.
That’s the reason why imports are not taking place in that great number. But demand is a little muted. It remains in those ranges in quarter one and quarter two but after that again it starts picking up. So that is about on the demand front, on the cost front as we have told that the imported coal rates have increased. So in April around around say how much in in say average of quarter four is somewhere around 19,500 and right now it is 21,500. So you can say around 2,000 rupees increase in quarter one as compared to quarter four.
So when it is 2,000 rupees increase that means its impact on the cost of production will be somewhere around 1400 to 500 rupees. If you look at cold development, they blend with indigenous score etc. Put together. So you can see they say that the cost impact will be around 1400 to 500 rupees per ton. So that will be the impact in quarter one from there. But the NSR the sales price levels are supporting this and on the top of that we’ll have to increase our sales volumes so that inventory doesn’t be there and and it will give us working capital company comfort.
Ashish Kejriwal
Great. Thank you so much and I would request you for our closing remarks then.
Ashok Kumar Panda
Yeah. Thank you very much. Thank you for your patient hearing as well as Q and A sessions. The domestic market have remained fairly stable despite challenging scenario outside as the company continues to take actions on efficiency improvement and cost reduction front we are hopeful of delivering even better results and value addition for all our stakeholders going forward. Also, the company remains committed towards sustainable performance including emphasis on decarbonization, improving capacity utilization, value addition and achieving cost competitiveness in this year and in future.
I thank all our investors for their reposing faith in us and I’m hopeful that the same shall continue in future. Thank you very much.
Operator
Thank you sir. Thank you members of the management on behalf of Nuama Institutional equities that concludes this conference. We thank you for joining us and you may disconnect your lines now. Thank you.