Jindal Steel Outperforms SAIL in Q2FY26 on Better Realizations and Lower Costs Amid Sector Tailwinds

Steel Authority of India Ltd (SAIL) and Jindal Steel & Power Ltd (JSL) have seen significant stock gains in 2025, with SAIL up 21% and JSL up 14%, partly due to lower imports and safeguard duties. However, their September quarter (Q2FY26) results highlight contrasting operational performances.

SAIL's standalone revenue grew 8% year-on-year to ₹26,700 crore, fueled by a 20% volume increase. Yet, its blended realization dropped by 10% due to softer steel prices and subdued demand affected by monsoons. Consequently, SAIL's EBITDA declined 13% to ₹2,530 crore, burdened by a 15% rise in raw material costs, particularly coking coal, and higher operational expenses. Its EBITDA per tonne was ₹5,493.

In contrast, JSL's consolidated revenue rose 4% to ₹11,686 crore, with realizations increasing by about 3%. This improvement was achieved by increasing the share of value-added steel grades to 73% from 58% previously, resulting in a per-tonne realization of ₹61,400, approximately 15% higher than SAIL's ₹54,400. JSL managed its raw material costs better, with a 3% increase, benefiting from captive iron ore production. Despite a 12% fall in adjusted EBITDA to ₹1,900 crore due to one-off shutdown costs, its EBITDA per tonne stood at a robust ₹10,027, nearly double that of SAIL. JSL's raw material-to-sales ratio was 45%, compared to SAIL's 50%.

Looking ahead, JSL's volume grew 1% in Q2FY26 due to maintenance, but it guides for 8.5-9 million tonnes in FY26, aided by new facilities, implying strong H2FY26 growth. SAIL's capacity expansion projects are slated for FY28 and FY31, with current capacity constraints expected to mute volume growth for several years, according to ICICI Securities.

JSL maintains a strong balance sheet with a net debt-to-EBITDA of 1.48x, the lowest among peers. JSL trades at a higher enterprise value (EV) of 10x FY26 estimated EBITDA compared to SAIL's 7.4x, reflecting investor optimism about its expansion potential.

Impact This news is significant for investors tracking the steel sector. JSL's superior operational efficiency, focus on value-added products, and clear growth trajectory due to ongoing capex provide a competitive edge. SAIL faces headwinds from capacity limitations and higher costs. The sector benefits from reduced imports, but steel prices and demand will remain key performance drivers. The comparison highlights differences in strategic execution and market positioning. Impact Rating: 8/10

Difficult Terms Realizations: The average price at which a company sells its products. Blended Realization: An average selling price that combines revenue from different product types or market segments. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization; a measure of a company's operating performance. Coking Coal: A type of coal used in steelmaking to produce coke, which is essential for smelting iron ore. Captive Iron Ore: Iron ore produced and used internally by a company for its own operations, reducing reliance on external suppliers. Consolidated Revenue: The combined financial revenues of a parent company and its subsidiaries. Standalone Revenue: The revenue generated by a single company or entity on its own. Enterprise Value (EV): A measure of a company's total value, including market capitalization, debt, and minority interest, minus cash and cash equivalents. Net Debt-to-EBITDA: A financial ratio indicating how many years it would take a company to pay back its debt from its earnings before interest, taxes, depreciation, and amortization. mtpa: Million Tonnes Per Annum; a unit used to measure production capacity, typically in mining and heavy industry.