Steel Authority of India Limited (SAIL.NS) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Steel Authority of India Q3 FY '26 Earnings Conference Call hosted by Nuvama Institutional Equities. [Operator Instructions] I now hand the conference over to Mr. Ashish Kejriwal from Nuvama Institutional Equities. Thank you, and over to you, sir.

Thank you, Rahul. Good afternoon, everyone. Once again, we welcome you all for Q3 FY '26 Post Results Con Call of Steel Authority of India. We are pleased to host Dr. Ashok Panda, Director of Finance, who is along with his team. Now I will request Mr. Panda for his opening remarks, and thereafter, we will open the floor for Q&A. Over to you, sir.

Yes. Thank you, Mr. Ashish Kejriwalji. Good morning, everyone. I welcome all our investors and analysts, who are joining this results con call for the financial results of SAIL for the quarter Q3 and 9-monthly FY '25-'26. Before we move to Q&A session, let me brief you on the results for the period. In the economic scenario front -- global economic scenario front, beginning with the global economic scenario, the uncertainties and volatilities are almost stabilizing right now as it seems. Global inflation has also been largely steady as of now. The projections for GDP has improved in line with the same for economies individually as well as the regional as well as global averages. Global growth is projected to remain resilient at 3.3% in 2026 and expected to be 3.2% in 2027, rates similar to estimated 3.3% outturn in 2025. The forecast marks a small upward revision for 2026 from the present levels. The projections for India has also been revised upwards to 6.4% -- from 6.4% to 7.3% by various agencies. So it seems the economy is going to grow at a better rate. So far as global steel industry is concerned, the landscape for the global steel industry is influenced by economic trends, trade policies and technological advancements. Of late, it has seen positive movement in the demand and cost push in the prices, primarily because of increase in coal price as of now. In the Indian steel industry front, Indian steel industry continues to enjoy robust demand for steel with consumption during 9 monthly FY '25-'26 grown by almost 7% over CPLY. The growth in production of crude steel has been still higher at around 9.5% during the same period. This has led to India again becoming a net exporter as exports grew by around 33% to stand at 4.8 million tonnes vis-a-vis imports, which has reduced by about 37% to stand at 4.65 million tonnes this time. When we compare to last year, the scenario is totally different, because this time, the exports have been much more than the imports. And of course, the safeguard duty also is playing a role in this, we can find that there is some sort of stability in the domestic markets in -- I mean, from December onwards. We will now discuss about the company performance of SAIL for Q3 and 9 monthly FY '25-'26. Coming to the performance of the company during 9 monthly FY '25-'26, the highlights are as follows: Crude steel production grew by 2% from 14.08 million to 14.35 million tonnes, whereas saleable steel has grown by around 4% to 5%. Sales volume grew by 16.3% for the company. And we have -- we have started outreaching to the retail as well as other consumers. And because of this huge growth in sales volume in 9 monthly, it has resulted in inventory reduction by a good number as well as reduction in borrowings. Revenue increased by 9% from INR 73,162 crores to INR 79,997 crores, broadly in line with the growth in the volume. And PAT increased by 60% in 9 monthly of this year as compared to CPLY last year. It is highlighting operational efficiency, liquidation of inventory due to sales growth and cost optimization as well as good treasury management. So in other words, we can say it is due to better financial prudence. Reduction in debt is close to INR 5,000 crores in 9 monthly. And in January alone, we have again reduced by around INR 2,000 crores and momentum continues for February as well as March. Going forward, as the monsoon season and festive seasons are already over, we hope that the market will see an uptick in terms of pricing in quarter 4 as the coal prices continue to remain range bound, in fact, a little on the higher side and the market support is also there. So the margins will remain good in quarter 4. This is what we're expecting. So quarter 4, again, there will be a better growth for SAIL. With these few words, I hand it back to Mr. Kejriwal for opening the Q&A session.

[Operator Instructions] The first question is from Amit Lahoti from Emkay.

In the first quarter of FY '26, we took INR 1,000 crores of inventory write-off due to falling coking coal prices. And now that prices have gone up, was there any gain in Q3? And then how much it could be in Q4 at the current prices? That's my first question.

Should I answer this question?

Yes.

So answer to this question is that actually in the first quarter, as you said correctly, it was close to INR 1,000 crores of impact in the stock valuation rate on P&L account. In quarter 2, it was not much. In quarter 3, we had a positive, and that could be somewhere around maximum INR 100 crores. In quarter 4, because the coal prices are on the rise, we expect that the cost of production is going to go up in quarter 4. So we have not yet estimated, but yes, it will have a good positive impact on the profitability as well as the margins, so to say.

So any broad number at the current prices, how much that could be? Like is it like INR 500 crores or...

I mean -- we can't exactly say primarily because the coal price is increasing, but now it is a little bit stable at $251. But at the same time, our production level is also increasing. So they will nullify each other to some extent. But even then, we still believe there will be an upward positive impact on the profitability. The numbers, anybody could guess could be around $200, $300, $400, but that we cannot say as of now. But obviously, it will be a positive one based on our guess.

Okay. And then my second question on the expansion plans. As we have a sizable cost disadvantage compared to our peers to start with on the margins and cost, how much it could narrow once we start getting in the incremental volumes from expansion projects, particularly IISCO, which is coming like 2 years from now, how to think about that?

Yes. So far as IISCO is concerned, actually, we have a project over there, which is around INR 36,000 crores estimated. And most of the major packages have been already ordered out. So the ground activities have already started and they are going to finish in 3 years' time. That is the time line. And we believe after we get that, then the production volume as well as the margin, which will come from there will really bolster our profitability to a greater extent. And for that matter, for those -- to accommodate those borrowings, we've already reduced our working capital borrowing quite a lot, as I've already told, we are keeping a margin to accommodate for the expansion CapEx.

Okay. So is it possible to quantify that number either in terms of, say, EBITDA per tonne or cost per tonne, how much it could benefit once it comes in? Any kind of rough number?

See, those will be new facilities. Those will be new facilities. So right now, our EBITDA per tonne is I think just 1 second. EBITDA per ton is -- so those numbers will be more than that. Right now, INR 6,000 --hovering around INR 6,000 to INR 7,000 right now. So quarter 4 will be better than that. And we believe that ISP expansion, once expansion is over in time, then the numbers would be more than INR 10,000 per tonne from ISP expansion.

Okay. And just as a follow-up to this, is there any revised CapEx guidance for FY '26 and '27?

Yes. So the CapEx guideline -- guidance for FY '26-'27 is INR 15,000 crores.

INR 15,000 crores for '27?

For '26-'27. That is because actually some of the CapEx payments towards ISP expansion, IISCO expansion will become -- will be there actually next year.

The next question is from Pinakin Parekh from HSBC.

Sir, so my first question is, can you quantify the price increases that you have taken in December and Jan across flat and long products?

Let me just tell you. You're talking about Jan or December?

December and Jan total.

I mean, actually, the market started improving from middle of December actually. Till November, it was subdued kind of September, October number was quite subdued situation. So towards the end of December, we started increasing, market started improving, it started increasing prices in long as well as flat. So in December, when we look at the actual impact increase of the prices got reflected in January, did not get reflected in December, either for long or for flat. So the real increase of around, say, INR 2,000 to INR 2,500 was reflected in January in long and around, say, INR 3,300 to INR 3,500 in flat in January so far as sales price is concerned. But the actual increases happened during the month of June in 2, 3 tranches. So all of that will get reflected in February. So that means in February, real increase in NSR -- in sales price will be quite encouraging, will be more -- and primarily because the coal price also is having upward journey. So that's the reason why it will be price increase in domestic market.

Sure, sir. Now what we understand is, sir, that the price increases at the trade level in India has been much larger, but the company level price increases have been lagging so far. So do you expect further price hikes at the company level in February and March?

That's what I'm saying actually. In the month of January because the price increase took place in 2 or 3 tranches during the month. So all of that could not be reflected because it got averaged out in the sales price of January. So that is getting spilled over to the next month. Means that February actually, you will find a good jump in sales price. And at the same time, I'm telling you that actually the coal price also, there is a good jump. So kind of they are going in the same -- in tandem.

Sure. And what is the coking coal cost increase that you see in the fourth quarter because spot prices have surged to $250, average $184 in 3Q. So what kind of cost increase should we see?

Just 1 minute. So when we talk about imported coal price month-wise, so like in January, the average imported coal price is INR 18,500 and which is expected to increase by INR 1,200 in February, which is INR 19,700. And this is because of the weighted average arrivals and the stock quantities and all that. But otherwise, as you said correctly, the index has gone up to $251 per tonne. It was hovering around $190, $185, $190. So in February, we are expecting around INR 1,200 increase in consumption rate will be there. And in March, there could be an increase of another INR 1,000 over and above this. So -- and we don't know whether it will further increase beyond $251 or it will then taper down. I personally feel that actually it should not increase much. It will stabilize. And after that, after the situation improves in Australia, probably it will taper down.

Understood. And sir, my last question is that if you look at the sales volume that you reported, steel sales volume, how much was NMDC volumes in this? And what would be the margins in that?

Come to that NMDC volume. Just 1 sec. So our total 9 monthly sales -- so total sales volume is 14.6 million tonnes and NSL is almost 1 million tonne.

Out of that NMDC is 1 million tonne.

NSL for that matter is 1 million tonne.

And sir, the margins on that steel sales would broadly be the same what you are seeing at your operating company. They are higher, lower. I mean, how will be -- how long will this arrangement continue?

See, this pricing is exactly as per SAIL, Steel Authority of India Limited. So we're targeting the products in the -- mostly in the South market. So that is going exactly in line with our own products. So there is no difference in their pricing compared to SAIL -- pricing of SAIL. So far as the quantities that we are handling. There are some quantities which they are handling. We can't comment on that. So this is at par with SAIL products in whichever market it is going.

And the pricing is the same, but what about the cost, sir?

I mean it is kind of an arrangement between NSL and SAIL. So the delta, we can't exactly say right now, let's say, check it out. But mostly, we are maintaining the price parity in the market without any disadvantage to SAIL or NSL. So it is to an advantage to SAIL as well as NSL as well as to the market players.

Next question is from Vikash Singh from ICICI Securities.

Sir, my first question pertains to our employee cost, which has surprisingly gone down on a sequential basis. So first thing that what is the main reason? Secondly, how should we look at the employee cost going ahead in the next year since there is a mandatory wage revision would be coming in?

Yes. Let me come to that actually. Salary wages, we see around 11.5% right now. So as compared to last year as compared to -- just 1 sec, it is almost at the same level if you look at last year. You're talking about quarter 3 or what?

Sequential was a decline.

No, it is almost at the same level because I'm finding that, whether it is quarter 3 to quarter 3 or even -- if you look at quarter 2 to quarter 3, then there's a reduction. That is just an adjustment of the actuary and all that. So that's a different thing. But broadly, if you look at 9M to 9M, both are remaining almost at the same level of INR 3,100 crores. Last year also 9M was INR 5,943 crores and now it is INR 6,080 crores, broadly at the same level.

No, no. I was looking at the 3Q. If you look at the last quarter was INR 2,900 crores and almost INR 39 crores. So it has come down almost INR 100 crores basically on a sequential basis. So that is -- so what was the actuarial valuation difference, which had not come this quarter or there was a reversal of provision, if you could give me that number?

There are two reasons for it. One is actuary, which is depending on the discounting factor, that's a different thing and factor is increasing. The other thing is basically the gratuity component. As you can see that in H1, we had taken a hit because of that INR 25 lakhs after achieving 50% in [ IBA ], then it was increased to INR 25 lakhs. So that was the reason why actually Q2 was apparent to be on the higher side. And also the discounting rate is increasing. So all put together, in Q3, we are finding that it is appearing to be a little less than that. And the same thing will continue in quarter 4 as well. Now coming to your other question of salary revision from '26 -- that will happen from '27, '28 onwards. It is not from '26, '27, just to clarify, because it will be applicable from 1st January 2027. So most of that impact will come from -- in '27, '28. So -- and at the same time, as you are finding, we are having around 50,000 number of employees on our roles right now who are legacy people. So every year, there's a hefty reduction in the manpower. So on the whole, the manpower -- because of manpower reduction, the cost is going to go down and because of fair ex which we do not know how much it will be, it will be calculated based on the guidelines. Guidelines is not -- they are in position right now. So we'll see plus and -- there will be plus and minus both the sides. So there will be some net impact maybe, but that will come in '27, '28 not now.

Noted. And sir, my second question pertains to our product mix. Since we have already reached the -- at least the production volume peak out has happened, is there any scope for us to enrich our product mix, bring down the semis for the next year and bring up the EBITDA per tonne? So -- or the demand of these products are such a way that this would be difficult to do. So if you could give us some thought process on the company side on this?

Yes. Let me just tell you, before I give the numbers, let me tell you in this context is that we've been trying to reduce the semis as much as possible. One is by increasing our own production. And right now, semis percentage is 10%. If you compare the previous years, it is less because our focus is on having finished products more than the semis by taking 3, 4-pronged actions. One is in the mills, we are trying to increase the production as much as possible by having more availability, better availability of the mills, better care regarding the equipment, et cetera. Number two, we are having conversion contracts in place as well. We are maximizing that. So through these 2 things, actually, we are trying to have more finished products in the market compared to the semis. So the semis percentage has been coming down gradually. And number two, at Durgapur Steel Plant, we have started one project, which is 1 million tonne TMT bar mill. So that will come up maybe 2 years from now. Already activity started, ground activity started. Once that comes up, you will find that semis will be almost very close to 0 percentage at that point of time. So it is only a matter of time that we will see that semis will be 0.

And by when this could be possible?

I mean it will take around 2 years' time from now.

18 months.

18 months, yes. So it is 18 months' time. Already groundwork has already started. So if we are end of '25, '26 right now, 18 to 24 months is the time line. You can say 18 months' time line for that for completion of project activities. And after that, stabilization and commissioning those things will be there.

Noted. Sir, just one last question about the news on the accident at the plant during 3Q. So just wanted to understand, had this anything spilled over to 1Q as well or overall production-wise, et cetera, there was no loss?

If you're talking about the accident of...

Basically because we are having this kind of incident every year. So any -- to control this?

Correct. Correct. So if you're talking about the incident of Bhilai Steel plant SMS because you are not specific on that, are you talking asking about that question? That is the question.

One incident happened in Bokaro and then just recently in Bhilai, within a span of 4 months, there were 2 incidents. So I was more about the recent Bhilai, which could have impacted the 1Q -- sorry, 4Q performance?

Let me address these two questions. One is the Bokaro, which we also discussed during H1 and one is the Bhilai, which happened right now. So far as Bokaro is concerned, actually, that is already sorted out. It impacted us in quarter 1 -- in quarter 2 greatly. And now the SMS, both the converters in SMS steel melting shop, they are in full gear. And they are producing at almost 100% target levels. So their SMS is all right because of which blast furnace, they did not have any problem. So blast furnace has picked up, hot metal has picked up, crude steel has picked up. They are almost operating at 98% to 100% capacity right now. That is a story regarding Bokaro and they will go like this in quarter 4 and going forward also like that because we have taken certain actions that in future, such tube leakages can be avoided in the converter because we've got the spare parts and all that. Now so far as Bhilai is concerned, Bhilai SMS is concerned, again, it is back on rail. In Bhilai SMS, the converter, which had the vessel changed. So after that, actually, there is a bit of problem because of which spillover of metal had taken place and it had burnt the electrical cables. So that -- and it was down for around 15, 20 days. Now it has come back. So the production at Bhilai Steel Plant has again picked up to its normal level of around 18,000 to 18,500 tonnes per day of hot metal. So it had impacted us around 15 days to some extent, around 2,000 tonnes per day was the impact in physical terms for around 15 to 16 days. Now it is completely all right. And in future also in quarter 4, it's not going to have any problem. So all our 5 ISPs are full blast right now. They are producing at the highest levels. And this trend will continue for quarter 4.

[Operator Instructions] The next question is from Pallav Agarwal from Antique Stockbroking.

So the first question was on the bridge -- EBITDA bridge from -- in your presentation from 2Q to 3Q. There one of the negative things has been shown as the volume impact. But I thought, sir, we had an increase in volumes compared to -- on a sequential basis. Any reason for that negative impact due to volume?

Yes. Just 1 sec. Between quarter 2 to quarter 3?

Yes, sir.

Yes, that's primarily because of the reduction in production of saleable steel. Even if there is improvement in hot metal and crude steel to some extent, but saleable steel came down because of the reason that actually in the previous quarters at RSP, new hot strip mill, new hot strip mill has more capacity. So they were producing more by taking slabs from Bokaro Steel Plant, by taking slabs from the excessive stock of Bokaro Steel Plant. So right now, because in Bokaro, hot strip mill has picked up and everywhere it has picked up, so infrastructure stock has come down at Bokaro Steel Plant. That is the reason why actually at RSP, the saleable steel level remained low. So that was the primary reason for reduction in saleable steel volume in quarter 3 compared to quarter 2. In quarter 4, all the 5 plants, they have already increased their production because all the [indiscernible] everything is over. So all the mills are in full blast, all blast furnace as well as SMS, they are at 100% level or more than 100% level. So availability of slabs for Rourkela Steel Plant to meet the more requirement, the higher requirement of HSM-2 will be there. We'll be sourcing slabs from Bokaro as well as Bhilai to Rourkela to have that delta production at HSM-2 at Rourkela Steel Plant. So that was the reason.

Okay. So primarily is because of lower saleable steel production, not the sales volume. So that's led to win...

Yes, no. As you can see, sales volumes have picked up like anything. Despite I think bad market, it was around 16% growth in 9 monthly compared to previous year.

Okay. So the same thing, input price cost, there's a positive number. So is this -- I thought coking coal costs would have gone up sequentially. So could you just clarify that as well?

I mean coking coal cost actually went up after December. And it is also having savings of the power cost in that. Coking coal partly and mostly because of the power cost because we are trying to reduce our power cost by sourcing it from RE power sources. So we've taken certain actions in different, different plant in it, and that has given rise to some savings.

So this should be structural saving going in?

Yes, this will be structural. This is a part of that and we will further improve. We are working on that. It's a requirement as well. RE power is a requirement for us as well as by going for RE power, we are getting also price advantage in certain cases.

Sure, sir. Also, if you can just -- the NSL volumes we mentioned for the 9 months, could you also just give us the quarter -- third quarter volumes?

Third quarter volumes, just hold on. 0.37 million tonnes, quarter 3.

Next question is from Raashi Chopra from Citigroup.

On your realization, what was the exact change in realization sequentially, NSR?

Which one?

NSR. NSR, what was the change from 3Q -- from 2Q to 3Q?

From Q2 to Q3. In Q2, if you look at average NSR, so in average NSR, there is a drop. In Q2, it was INR 48,836, but in Q3, it was INR 47,735. But if you compare between long and flat, in long, it has increased from INR 48,885 to INR 49,021. In flat, it dropped from INR 48,790 to INR 46,580. So there was a drop in NSR, in flat as compared to long. So average NSR also, there was a bit of drop.

Then on the coking coal cost, you mentioned that the Jan cost was INR 18,500. I assume this is your blended coking cost, right, not imported.

Yes, that is actually average, yes, you're correct.

And what was that number in the third quarter?

Third quarter number was INR 18,351.

INR 18,350?

Yes. Third quarter number is INR 18,350.

Okay. And on the CapEx, you mentioned that in FY '27, the CapEx is going to be INR 15,000 crores. For this full year FY '26, what is the CapEx, sir?

For the full year, initial guidance was INR 7,500 crores and then final guidance is INR 10,000 crores, it will be anything between these 2.

Okay. And how much has been spent in the 9 months?

Yes. So 9-monthly figure was INR 5,428 crores.

Got it. Just last question for me on the volumes, what are you targeting for this year and next year?

Yes, just one sec. So this year, if you see April to December, hot metal volume is 15.14 million tonnes. And by year ending, we expect that is -- just one sec.

Okay. Sales volume is good...

So year ending figure of hot metal could be around 20.5 million or something like that, close to 21 million tonnes. So next year, we're targeting 22.5 million tonnes of hot metal.

And on the sales side?

On the sales side, let me tell you. So sales volumes are on the higher side and -- so if my saleable steel in 9 monthly is 14.2 million tonnes and total sales volume in 9 month is 14.6 million. So it is going beyond the production levels, and we are reducing our inventory. Our inventory levels have come down. In 9 monthly, if you look at our inventory levels are down by around 0.3 million tonnes as compared to starting of the year, both in in-process as well as saleable steel put together. So further reduction will be there. So going by this, we'll be able to achieve a sales volume around 19.5 million year ending, which will be more than the production.

Next question is from Sumangal Nevatia from Kotak Securities.

Sir, first question is, I want to understand at the EBITDA level, is there any contribution from this arrangement of NMDC volumes, NSL?

So let me tell you actually, as I have always told in case of NSL products, it's beneficial to NSL to SAIL as well as to the market players. So that is purely based on the arrangements we've made. But mostly, as I told you, it is just keeping a parity of the pricing strategy of sales in various regions. We are concentrating mostly on the South. We had concentrated mostly on the South so far as 9 monthly is concerned, the quantities have already been told. So there are positive margins. However, the margins are small. It's not very high, but it is giving a market stability. It has given a market stability. So all 3 fronts, people have benefited out of this.

Okay. And sir, this year, when we are seeing about 16-odd percent growth, I mean, ex of NSL, it's around 7%, 8%. So the guidance ex of NSL would be what, 18.5 million tonne volumes for this year?

For this year, 19.5 million minus yes, you're correct.

But 1 million tonne is already done in the 9 months, right? So...

1 million tonne is already done. And in quarter 4, much of quantity may not come. So in a way, if we end up -- we'll try to end up at 19.5 million sales figure. So it could be somewhere around -- our own figure could be somewhere around 18.5 million -- around 18.5 or something like that.

And where can we take -- got it. Got it. And in absence of new capacity, where can this 18.5 million go in, say, next 2 years, '27 and '28?

In '26, '27, let me address this question for '26, '27 first. While in this year, in '25-'26, we were trying to finish hot metal at 20.5 million to 21 million tonnes, we are targeting 22.5 for '26-'27. That means you can say around 21 million tonnes of saleable steel in '26-'27. And then we can have further growth in '27. Once we achieve this particular growth, then we'll have further growth in '27-'28. So you can say in '27-'28, it could be 23 million tonnes of hot metal and 21.5 million tonnes of saleable steel. And after that, we will see that ISP modernization will be there.

Okay. Okay. And this is, sir, ex of NSL or including NSL 1 million tonnes?

This is ex of NSL.

Understood. Understood. And sir, next year CapEx, we've substantially increased. I think earlier, it was around INR 10,000 crores. Now you're talking about INR 15,000 crores. So can you give a breakup? And in this IISCO expansion, how much are we spending? And what is the time frame for the expenditure over the next 2, 3 years?

For next 2 to 3 -- see, IISCO expand -- CapEx total will be around INR 36,000 crores. So from '26-'27, we'll have major amount coming from IISCO. So IISCO amount could be in excess of -- could be somewhere around -- maybe around INR 7,000 crores to INR 8,000 crores in case of IISCO so far as '26-'27 is concerned. And after that, it will again pick up. Means the peak figure will be in '27-'28 and also in '28-'29 for IISCO.

Okay. So the completion could be towards the end of '29 or maybe FY '30 as well, right?

FY '30, yes, somewhere around FY '30.

Understood. Understood.

End of '29 or '30 something like that.

Okay. And sir, the coking coal cost, which you shared, so the increase in Feb versus 3Q average is just around 7%, 8%. Is that the right comparison? Because if you look at the dollar price, it's gone up by more than 20%. So have you got the numbers right? It is INR 19,700 versus some INR 18,000...

Which one you're talking about?

The coal cost, sir?

Yes, coal cost.

Average 3Q versus spot, can you explain us what is the increase?

Average 3Q actually, we told it is INR 18,351, that is basically because of the averaging of the stock out here as well as the supplies we are getting from time to time. But the spot prices have gone up. The spot price is $251, that is the index price. And based on that, actually, we have 98%, 97% excess stuff from different, different sources. So these prices are getting reflected slowly and slowly, partly in February and partly in March. And also it will -- the effect is going to come in April as well. As you know, there is a time lag of around 1.5 months to 2 months for these prices to get reflected in the consumption. And also the dollar-rupee parity is also impacting this.

So on a consumption basis, what is the quarter-on-quarter increase? Because is this -- yes, can you explain that, sir?

Because quarter 2 was INR 18,158 and quarter 3 is INR 18,351. There was not much of increase in quarter 3. But in quarter 4, you will find an increase of around INR 1,500 over quarter 3 is what I'm guessing. Would that be the last question, please?

We have one more. The next question is from Tushar Chaudhari from Prabhudas Lilladher.

Sir, last quarter, we sold around INR 1,140-odd crores of sale of scrap. How much was this quarter, scrap and byproducts?

Just one sec. Can you ask the next question before we take up the...

Okay. So CapEx, you are saying INR 7,500 crores to INR 10,000 crores FY '26 and '27, it will be INR 15,000-odd crores. Am I right on this?

Yes.

Okay. Sir, there were some debottlenecking projects at DSP, RSP, BSP, which we talked about earlier. Can you throw some light and how much CapEx we'll do for them?

Yes. So far as RSP is concerned, they've already completed Caster #4 and the production is going to start now. It's already started over there. So that part is over. So far as DSP is concerned, the debottlenecking brownfield project already started, and that will take around 18 months to 20...

Which you said TMT mill?

TMT mill, yes. Which you said the TMT mill, at the same time after TMT mill also, we are starting on blast furnace over there. We'll knock up one old blast furnace, we'll start a new blast furnace. So along with blast furnace, we have another converter, et cetera. So beyond TMT mill, we have also approved another package for them and which will also increase the overall capacity of Durgapur Steel Plant by 1 million tonnes. So TMT is a mill, which is 1 million tonne, and that is already -- activity already started. It will be completed in 18 months' time, another 18 months' time. And this will reduce the semis to 0. But after that, overall capacity of hot metal and crude steel will increase by 1 million tonne through another debottlenecking activities in which we are going to put up 1 blast furnace, 1 converter and 1 caster and we'll knock up the old one. Coming to your first question, Q2 was INR 1,140 crores. Now it is INR 1,279 crores in quarter 3.

Okay. And how much is the finished steel inventory now?

Let me come down. So finished steel inventory sale as a whole, it is around 1.5 million tonnes and in-process inventory is 0.9 million tonnes, together 2.4 million tonnes. As on 31st March, it was 2.7 million tonnes.

We'll take that as the last question. I would now like to hand the conference over to Mr. Ashish Kejriwal for closing comments.

Yes. Sir, just before closing, one question from me also. We are talking about 19.5 million tonne of sales volume guidance for FY '26. So which means that -- and probably in 9 months, we have already done around 14.6 million. So do you want to say that our fourth quarter volume will be more or less lower than third quarter or because 14.6 million we have already done, and we have done 5.15 million in third quarter. So how does the volume in fourth quarter?

Yes. 14.5 million is already done in 9M. And our Q4 volumes will be more than that of Q3. Only thing is that actually in case of NSL, we may not take much of a volume from NSL. That's the only consideration. We want to sell as compared to the other ones. So the NSL numbers may be less in quarter 4 as compared to 9M. That's the reason.

But overall, do you think that we can do 5.5 million tonnes? Because if that happens, then total volume will cross 20 million tonnes?

Let's see, we are trying a lot because as you can see in January also, we had a stock reduction of around 0.3 million tonnes. And February and March, I'm expecting optimistically 0.3 million, 0.3 million tonnes. So that's the reason we will make endeavor towards that.

Sure. And sir, lastly, when you are talking about average price increase of around INR 3,000 in tranches in Jan, so are you saying that we are going to increase further prices in February or it's because the average price in January will be lower than the spot price?

No, it is -- there is an upward movement in the market right now because of the coal prices. So as you said correctly, the guidance is that it will be upward.

Okay, sir. So sir, any closing remarks from your side? We'll then end the call. Thank you.

Yes. Thank you very much for all the Q&A session and all that. The second half of the financial year is always the best for steel industry. Things have already started looking up, and we hope that the trend and momentum will continue. Meanwhile, steel demand is also significantly moving up. And with the improvement on the efficiency front and cost control measures, so it will improve the margins in the balance period of the year, that is quarter 4 despite having the coal prices remaining high. And there will be a lot of inventory reduction in this quarter 4 and the borrowings will go down drastically. And because of the reduction in the borrowing fees with the interest cost is going down. As you know, in 9 monthly, our interest cost has come down by INR 500 crores. We expect that another INR 500 crores reduction in inventory will additionally happen in quarter 4. So overall, for the year, the interest reduction could be around -- interest cost reduction could be around INR 1,000 crores. Also, the company remains committed towards sustainable performance, including emphasis on decarbonization, improving capacity utilization, value addition, reducing semis and achieving cost competitiveness. We're also trying to reduce the cost as well as improve the top line. And you will find that in this particular year, your top line, which was remaining almost at INR 1 lakh crores earlier, now it is going for a big number in this year. I thank all our investors for their -- for reposing faith in Steel Authority of India Limited, and I'm hopeful that the same shall continue in the future as well. Thank you very much.

Thank you very much. On behalf of Nuvama Institutional Equities, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.