New Delhi: Steel Authority of India Limited (SAIL) has informed the stock exchanges that CareEdge Ratings has revised the outlook on its long-term bank facilities from Stable to Positive, while reaffirming the company’s CARE AA rating.
The rating agency has also reaffirmed SAIL’s short-term and commercial paper ratings at CARE A1+.
The revision in the long-term outlook reflects the improvement in SAIL’s profitability, healthy operating performance and expectations of sustained improvement in its financial performance over the short to medium term.
SAIL Rating Action Summary
The rating action by CareEdge Ratings covers SAIL’s bank facilities and commercial paper as follows:
- Long-term Bank Facilities: ₹14,850 crore — CARE AA; Positive — Rating reaffirmed; outlook revised from Stable to Positive.
- Short-term Bank Facilities: ₹48,250 crore — CARE A1+ — Rating reaffirmed.
- Commercial Paper: ₹8,000 crore — CARE A1+ — Rating reaffirmed.
- Bonds: Rating withdrawn.
The CARE AA rating indicates a high degree of safety regarding timely servicing of financial obligations, while the Positive outlook reflects the possibility of further improvement in SAIL’s credit profile.
Read also: SAIL Records 1% Growth in Crude Steel Production in H1 FY27, Finished Steel Output Reaches 8.39 MT
SAIL’s Profitability Shows Significant Improvement
One of the key factors behind the outlook revision is the significant improvement in SAIL’s PBILDT per tonne.
According to the rating assessment, PBILDT per tonne improved from ₹6,998 in Q1FY26 to ₹9,974 in Q1FY27.
CareEdge Ratings expects this improvement in profitability to continue over the short to medium term, supported by SAIL’s operating performance and sales volumes.
Strong Government Support and Operating Performance
CareEdge Ratings also highlighted SAIL’s strong government backing as a key rating strength.
The Government of India holds a 65% stake in SAIL, while the company’s Maharatna status further supports its financial and strategic position.
SAIL has also maintained healthy operating performance, with its steel-making facilities operating at near-full capacity utilisation. Rising sales volumes have further supported the company’s operating profile.
Captive Iron Ore Mines Strengthen SAIL’s Position
SAIL continues to benefit from its position as one of India’s largest integrated steel producers and its strong presence across the domestic steel market.
Another key strength highlighted by CareEdge Ratings is SAIL’s complete iron-ore security through captive mines. This provides the company with greater control over a critical raw material for steel production.
The company’s financial risk profile has also improved, with overall gearing declining to 0.63x as of March 31, 2026.
SAIL Plans Major Capacity Expansion
SAIL is undertaking a major capacity expansion programme as part of its long-term growth strategy.
The company plans to increase its crude steel capacity from around 20 million tonnes per annum (MTPA) to approximately 35 MTPA by FY32.
The overall expansion programme is estimated at around ₹1 lakh crore to ₹1.20 lakh crore. The investment is expected to be calibrated in line with SAIL’s internal accruals.
The planned capacity expansion is aimed at strengthening SAIL’s production capabilities and supporting its long-term growth in the Indian steel market.
Steel Industry Cyclicality Remains a Key Challenge
Despite the positive outlook, CareEdge Ratings highlighted several factors that continue to constrain SAIL’s credit profile.
These include:
- Cyclical nature of the steel industry
- High working capital requirements
- Dependence on imported coking coal
- Large contingent liabilities
The rating agency will continue to assess SAIL’s profitability, operating performance and financial profile while considering future rating actions.
About SAIL
Steel Authority of India Limited (SAIL) is one of India’s largest steel producers and a Maharatna public sector enterprise under the Ministry of Steel, Government of India. The company operates integrated steel plants and captive mines across India and produces a wide range of flat and long steel products for sectors including infrastructure, construction, engineering and manufacturing.
Read also: SAIL Rourkela New Plate Mill Sets New Production Record With 94,517 Tonnes Output in September 2026
