Results: Steel Authority of India Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

A week ago, Steel Authority of India Limited (NSE:SAIL) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Steel Authority of India beat earnings, with revenues hitting ₹245b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 13%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Steel Authority of India after the latest results.

View our latest analysis for Steel Authority of India

Taking into account the latest results, the most recent consensus for Steel Authority of India from 17 analysts is for revenues of ₹1.05t in 2026. If met, it would imply a satisfactory 4.1% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 50% to ₹8.14. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹1.11t and earnings per share (EPS) of ₹10.80 in 2026. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

The analysts made no major changes to their price target of ₹108, suggesting the downgrades are not expected to have a long-term impact on Steel Authority of India's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Steel Authority of India, with the most bullish analyst valuing it at ₹140 and the most bearish at ₹55.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Steel Authority of India's past performance and to peers in the same industry. We would highlight that Steel Authority of India's revenue growth is expected to slow, with the forecast 3.3% annualised growth rate until the end of 2026 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. Factoring in the forecast slowdown in growth, it seems obvious that Steel Authority of India is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹108, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Steel Authority of India going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Steel Authority of India (1 is concerning) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.