ICICI Direct has recommended a buy rating on shares of Steel Authority of India Limited (SAIL) with a target price of ₹200. The brokerage stated that the target implies a potential upside of about 33% from the current market price. SAIL shares closed at ₹150.15 on the National Stock Exchange in the previous trading session.
ICICI Direct said robust steel demand, supportive government policies, and the company’s expansion plans could support the stock in the coming period.
Growing Steel Demand in India
ICICI Direct stated that steel demand in India could increase significantly in the coming years. India is the world’s second-largest consumer of steel, although per-capita steel consumption remains relatively low. Average per-capita steel consumption in India stands at 103 kilograms compared with the global average of around 215 kilograms.
The government aims to increase the country’s crude steel capacity to 300 million tonnes by FY31 and raise per-capita steel consumption to 160 kilograms.
According to the brokerage, rising demand could directly benefit large steel producers such as SAIL. Increasing activity in the infrastructure and construction sectors could also strengthen demand for the company’s products.
Expansion Plans and Production Capacity
SAIL is among the major steel producers in India and currently has crude steel production capacity of around 20 million tonnes per year. The company is working on several projects to expand its production capacity.
One of the key projects is the expansion of the IISCO Steel Plant, where production capacity is planned to increase from 2.5 million tonnes to 7.1 million tonnes. The expansion project is estimated to involve an investment of about ₹36,000 crore and is scheduled for completion by FY29.
In addition, SAIL is undertaking expansion and modernization initiatives across other steel plants to increase production. ICICI Direct estimates that the company’s total sales could grow at an average annual rate of 6% between FY25 and FY28 to reach around 21.5 million tonnes.
Safeguard Duty Impact
ICICI Direct said safeguard duty imposed by the government on steel imports could benefit domestic steel companies. In December 2025, the government imposed a 12% safeguard duty on certain steel imports, after which steel prices in the country increased by more than ₹5,000 per tonne.
SAIL reported EBITDA of around ₹4,500 per tonne in the third quarter of FY26. The decline was lower compared with other steel companies.
The brokerage estimates EBITDA could increase to around ₹5,400 per tonne in FY26, ₹6,600 per tonne in FY27, and ₹7,500 per tonne in FY28.
Valuation Metrics
According to ICICI Direct, SAIL’s valuation is lower compared with other large steel companies. The company’s EV/EBITDA multiple stands at around 6x, while other large domestic steel companies trade at more than 8x.
The brokerage stated that the steel sector could see an improvement in the coming period.
SAIL Operations and Product Portfolio
SAIL is a Maharatna public sector company operating under the Ministry of Steel. The company manufactures and sells a range of steel products.
Its major plants are located in Bhilai, Durgapur, Rourkela, Bokaro and IISCO. These facilities contribute significantly to steel production in India.
SAIL’s products are widely used in sectors including railways, automobiles, construction and infrastructure.
