S.A.L Steel FY26: A ₹207 Cr Revenue Year Under Reconstruction
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1. At a Glance
S.A.L Steel’s FY26 reads like a company mid-surgery. Revenue collapsed to ₹207.57 crore from ₹544.12 crore a year ago—a 62% decline—because the Gandhinidham plant sat dormant between September 2025 and February 2026 for modernisation and management takeover by Sree Metaliks’ team.
The net loss came in at ₹0.35 crore, while last year’s loss was ₹6.42 crore. By EPS, that’s ₹-0.02 against ₹-0.76.
The balance sheet swung. Borrowings nearly doubled to ₹349 crore, capital work-in-progress exploded to ₹173.77 crore (capex for the refurb), and reserves finally climbed into black—₹1.85 crore vs a ₹46 crore deficit a year prior.
The teaser: A company half-shut is a company half-waiting. What happens when the plant runs again?
2. Introduction
S.A.L Steel was incorporated in 2003 and listed on NSE (SALSTEEL) and BSE (532604). The Gandhinidham, Gujarat-based maker of sponge iron, ferro alloys, and power operated for two decades with modest returns until September 2025 brought regime change.
Sree Metaliks Limited—the Odisha-based integrated steel maker—began acquiring the company late 2025. By mid-February 2026, Sree Metaliks held 57.5% and triggered the takeover: Mahesh Kumar Agarwal (who runs Sree Metaliks) and his son Kaustubh Agarwal stepped in as MD and Additional MD. The company secretary, CFO, and whole-time director changed. A new cost auditor was appointed.
The plant then shut down through February 2026 for modernisation and handover. When the board met on May 29, 2026, it approved resumption of operations and a ₹50 crore term loan from Axis Finance to repay an earlier intercomporate deposit from AIA Engineering.
3. Business Model: WTF Do They Even Do?
S.A.L Steel operates three factories in Gandhinidham, near Kandla Port. The product mix: direct reduced iron (sponge iron), ferro alloys (primarily ferrochrome), and power.
Sponge iron, in FY25, was 131,281 MT produced; ferrochrome was 12,916 MT. The company captures 40 MW of captive power from waste heat and fluidised bed combustion boilers, selling surplus to the grid.
The business is classically cyclical. Sponge iron feeds into steel mills during construction booms; it evaporates when buildings pause. Ferrochrome output tracks stainless steel demand. Power output mirrors capacity utilisation. Post-acquisition, Sree Metaliks sees backward integration: SAL feeds Sree Metaliks’ own steel plants, reducing input costs and adding margin capture at an upstream step.
4. Financials Overview
Figures are consolidated, in ₹ crore, quarterly basis (latest is Q4 FY26 ended 31 March 2026).
The board noted that “the company initiated a robust modernisation program for its existing manufacturing facilities… due to essential activities required, planned shutdown which temporarily restricted production capacity, which impacted revenue for the period which now started or resumed the plant operation.”
Translation: three months of zero production for the refurb. When the plant ran (post-February), four months of sales yielded ₹11.97 crore in Q4—a fraction of normal capacity.
5. Market Expectations & Historical Multiples
This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.
Metric
Current
5-Year Average
Peer Median
P/E
N/A (negative EPS)
17.8x
28.65x
EV/EBITDA
80.6x
N/A
N/A
P/B
5.71x
N/A
2.66x
ROE
-17.7%
-1.28%
0.96%
ROCE
1.08%
8.74%
7.06%
The market prices the share at ₹57.84 (as of reference date), against a book value of ₹10.1 per share. That yields a 5.71x price-to-book multiple—substantially above the sponge-iron peer median of 2.66x.
The company generates losses, so a forward P/E is not calculable. The EV/EBITDA of 80x reflects the price relative to trailing operating profit, and that sits well above both historical precedent and peer norms.
What the market appears to be pricing in: recovery. A reconstructed entity under professional management (Sree Metaliks), backed by capex underway, and flush with fresh equity capital post-IPO warrant conversion (the company issued 3.57 crore shares to Sree Metaliks at ₹18
