SAIL share price jumps after Q3 results 2025. Should you buy as PSU stock trades 41% below 52-week high?

Shares of public sector steelmaker Steel Authority of India Ltd (SAIL) rose 3.5 percent in morning trade on Wednesday, February 12, following the release of its earnings for the quarter ended December 2024 (Q3FY25). Despite reporting a sharp decline in net profit due to increased expenses, the stock found some buying interest as revenue continued to show growth.

Q3FY25 Earnings Overview

SAIL reported a consolidated net profit of ₹141.89 crore for Q3FY25, marking a significant 66 percent decline from ₹422.92 crore in the same quarter of the previous year. The decline was primarily attributed to higher costs and pricing pressures. On a sequential basis, profit after tax (PAT) plunged 84 percent from ₹897 crore recorded in Q2FY25.

Revenue from operations, however, grew 5 percent year-on-year to ₹24,490 crore from ₹23,349 crore. On a quarter-on-quarter basis, revenue dipped slightly by 0.75 percent from ₹24,675 crore in Q2FY25.

At the operational level, SAIL’s earnings before interest, tax, depreciation, and amortisation (EBITDA) declined 5.3 percent year-on-year to ₹2,029.6 crore from ₹2,142.5 crore in Q3FY24. The EBITDA margin contracted to 8.3 percent in Q3FY25 compared to 9.2 percent in the same quarter last year, reflecting higher input costs and pricing challenges.

Management Commentary

SAIL Chairman Amarendu Prakash acknowledged the challenges posed by falling steel prices and an influx of cheaper imports. However, he remained optimistic about the company’s ability to navigate these headwinds.

“In the face of a challenging steel market characterized by declining prices and an influx of cheap imports, SAIL has managed to achieve better EBITDA during Q3FY25 compared to the corresponding period last year. We remain steadfast in our commitment to boosting production and enhancing cost efficiency while also exploring greener technologies. With appropriate interventions, we expect the issue of cheap imports to be addressed, and the government’s infrastructure push to drive domestic steel demand further,” Prakash said.

Analyst Take: Should You Buy?

Despite the sharp decline in profit, analysts believe SAIL’s revenue growth indicates resilience in demand. However, persistent margin pressures remain a key concern.

“Steel Authority of India Ltd (SAIL) reported a sharp 66.5 percent year-on-year decline in net profit to ₹141.9 crore in Q3FY25, down from ₹422.9 crore in the same quarter last year. Despite the profit slump, revenue from operations rose 4.9 percent to ₹24,489.9 crore, driven by higher sales volumes. At the operating level, EBITDA fell 5.3 percent to ₹2,029.6 crore from ₹2,142.5 crore, with EBITDA margin contracting to 8.3 percent from 9.2 percent. Rising input costs and pricing pressures weighed on profitability,” said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.

While revenue growth is steady, the company’s declining margins highlight operational challenges. Investors are likely to monitor cost-control measures and steel price trends to assess SAIL’s near-term outlook, Jain added.

Stock Performance and Outlook

Following the earnings announcement, SAIL’s stock rose 3.5 percent to a high of ₹103.65 in early trade. However, the PSU stock remains 41 percent below its 52-week high of ₹175.65, recorded in May 2024. On the other hand, it has recovered 4 percent from its 52-week low of ₹99.55, hit in January 2025.

Despite the recent uptick, the stock has been on a declining trend over the past year. It has shed over 18 percent in the last 12 months and nearly 5 percent in February so far, extending losses for the third consecutive month. It fell 5 percent in January and over 3 percent in December 2024, reflecting continued selling pressure.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.