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MUMBAI: Steel producers are set to report a sequential fall in profits in the October-December 2025 quarter despite a growth in volume in the seasonally strong period, weighed down by continued weakness in prices of the alloy, according to analysts.
The September quarter is usually the weakest for steel producers because of the impact of monsoon rains on both prices and demand, but steel prices have decreased further from these levels. Average prices of flat-rolled products fell 4-5% in the quarter to December from the previous three-month period, while those of long products were 1-2% lower.
Analysts estimate the blended realisations for steel companies to have fallen by Rs 1,500-3,500 per tonne as compared to the September quarter. This, along with an increase in the cost of coking coal, is expected to weigh on the profitability of companies.
As a result, the earnings before interest, tax, depreciation and amortisation (EBITDA) of the companies on each tonne of steel sold would have declined Rs 1,000-2,400 per tonne. “We reckon Q3FY26 EBITDA for all steel companies shall fall 10–21% QoQ due to lower steel prices,” Nuvama Institutional Equities said in a pre-earnings note.
Net profit for the December quarter, meanwhile, is seen 10-40% lower sequentially, with state-owned Steel Authority of India likely to take the sharpest hit.
“The extension of safeguard duty and subsequent steel price hikes should end the downgrade cycle of steel producers,” said Kotak Institutional Equities.
The government announced a 12% safeguard duty late in December, after which prices have already increased 7-8%. “Traditionally, Q4 is seasonally strong for volume push, and thus, we expect most steel companies to foresee very sharp reversal in margins in Q4,” ICICI Securities said.
Over the past month, the Nifty Metal Index has risen nearly 11%, as compared to a near 1% decline in the benchmark Nifty 50, reflecting this optimism. Shares of JSW Steel, Tata Steel, Steel Authority of India and Jindal Steel have risen 3-13% during this period.
The September quarter is usually the weakest for steel producers because of the impact of monsoon rains on both prices and demand, but steel prices have decreased further from these levels. Average prices of flat-rolled products fell 4-5% in the quarter to December from the previous three-month period, while those of long products were 1-2% lower.
Analysts estimate the blended realisations for steel companies to have fallen by Rs 1,500-3,500 per tonne as compared to the September quarter. This, along with an increase in the cost of coking coal, is expected to weigh on the profitability of companies.
As a result, the earnings before interest, tax, depreciation and amortisation (EBITDA) of the companies on each tonne of steel sold would have declined Rs 1,000-2,400 per tonne. “We reckon Q3FY26 EBITDA for all steel companies shall fall 10–21% QoQ due to lower steel prices,” Nuvama Institutional Equities said in a pre-earnings note.
Net profit for the December quarter, meanwhile, is seen 10-40% lower sequentially, with state-owned Steel Authority of India likely to take the sharpest hit.
Outlook
Both prices and earnings, though, are likely to have bottomed out, said analysts. They anticipate a recovery from the current levels given that both strong seasonality and safeguard duty will play out in the March quarter.“The extension of safeguard duty and subsequent steel price hikes should end the downgrade cycle of steel producers,” said Kotak Institutional Equities.
The government announced a 12% safeguard duty late in December, after which prices have already increased 7-8%. “Traditionally, Q4 is seasonally strong for volume push, and thus, we expect most steel companies to foresee very sharp reversal in margins in Q4,” ICICI Securities said.
Over the past month, the Nifty Metal Index has risen nearly 11%, as compared to a near 1% decline in the benchmark Nifty 50, reflecting this optimism. Shares of JSW Steel, Tata Steel, Steel Authority of India and Jindal Steel have risen 3-13% during this period.
( Originally published on Jan 17, 2026 )
