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The market expects SAIL to do better than it ever has.
At today’s share price, buyers are assuming SAIL grows about 10% a year, forever. Over the last ten years it actually grew about 3% a year. So the share price only makes sense if the business improves on its own track record. If it simply carries on as before, buyers today have paid for something they will not get.
- How it is valued: Discounted cash flow.
- What the price assumes: 10% growth, against 3% the model takes from its own record.
- Ten-year record: Between FY2018 and FY2026, SAIL's revenue went from ₹58,962 crore to ₹1,10,811 crore — it compounded at about 8% a year over 8 years.
- Biggest swing factor: Steel prices. Main risk: Steel cycle.
01Bhilai, Bokaro, Rourkela, Durgapur, Burnpur
Steel Authority of India (SAIL), majority-owned by the Government of India, runs integrated steel plants at Bhilai, Bokaro, Rourkela, Durgapur and Burnpur, plus special-steel units. It makes rails, plates, structural and flat steel.
It owns captive iron-ore mines, which keeps raw-material costs low, but older plants and a large workforce weigh on efficiency. It is planning a major capacity expansion.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the growth that price implies for SAIL, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03SAIL's record, in plain numbers
Between FY2018 and FY2026, SAIL's revenue went from ₹58,962 crore to ₹1,10,811 crore — it compounded at about 8% a year over 8 years. It reported a net loss in FY2018, and closed the period with net profit of ₹3,373 crore. In FY2026 it kept 3.0% of revenue as net profit — against a low of -0.8% in FY2018 and a high of 11.8% in FY2022. The latest year added 8.1% to revenue, close to its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 58,962 | -482 | -0.8% |
| FY2019 | 66,974 | 2,349 | 3.5% |
| FY2020 | 61,664 | 2,121 | 3.4% |
| FY2021 | 69,114 | 4,148 | 6.0% |
| FY2022 | 1,03,477 | 12,243 | 11.8% |
| FY2023 | 1,04,448 | 2,177 | 2.1% |
| FY2024 | 1,05,378 | 3,067 | 2.9% |
| FY2025 | 1,02,479 | 2,372 | 2.3% |
| FY2026 | 1,10,811 | 3,373 | 3.0% |
04How SAIL gets valued — and why
Discounted cash flowThis business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
05What decides SAIL's value
Steel prices
Spreads over raw-material costs drive profit.
Captive ore
Own mines lower costs.
Efficiency
Modernisation can lift margins.
Expansion
New capacity needs to earn its cost.
06What could go wrong
- Steel cycle. Prices can fall sharply.
- Coking coal costs. Imported coal prices are volatile.
- Employee costs. Wage revisions raise costs.
07What the full SAIL valuation shows
Sign in free to see the complete SAIL valuation
- ✓Fair value per share — from a ten-year discounted cash flow, every step shown
- ✓The Workbench — change revenue growth, the discount rate or terminal growth and watch SAIL's value move
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against Tata Steel, JSW Steel and Jindal Steel
- ✓Downloadable report — the full write-up, yours to keep
08Questions people ask about SAIL
Where are SAIL's plants?
Bhilai, Bokaro, Rourkela, Durgapur and Burnpur.
Why are SAIL's margins thinner than private rivals'?
Older plants and higher employee costs, despite its captive iron ore.
Who owns SAIL?
The Government of India holds the majority.
Is SAIL overvalued?
At ₹176 the market is pricing in roughly 10% sustained growth, against the ~3% its own record supports. That is more than it has delivered, so the price is justified only if the business can hold a rate it has not previously sustained.
What is the intrinsic value of SAIL?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does SAIL carry?
Debt to equity stands at 0.30, against 0.28 at the start of the period — the balance sheet is a core input to the cost of capital used here.