Steel Authority of India Ltd Management Discussions

In terms of the Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management of Steel Authority of India Limited (SAIL) presents its Analysis Report covering the performance and outlook of the Company.

A. INDUSTRY STRUCTURE & DEVELOPMENTS

World Economic Environment

The Global Economic Environment is challenging and unpredictable. At the beginning of Financial Year (FY), 2024-25, there was a visible upturn in the prolonged manufacturing slowdown. The early signs of industrial recovery were primarily driven by the worlds two largest economies viz. USA and China. The Global economy also showed signs of stabilization for the _rst time in three years. In_ation across major economies steadily trended downward, approaching the target levels set by the Central Banks. This trend was fueled by tighter monetary policies worldwide and supply chains becoming more resilient amid heightened global uncertainty.

In Calendar Year (CY), 2024, US economy remained resilient and grew by 2.8%, EUs GDP expanded by only 0.9% while Chinas economy enlarged by 5.0%. Further, in CY 2024, Chinese economy struggled due to its property market slump, high local Government debt and de_ationary pressure, which remained heavy, drags on its economic activity. Its formidable property sector continued to contract. To support the economy, Chinese Govt. approved a 10 trn. Yuan plan (YS$1,400 bn.). In addition to this, it also announced steps including increased lending and soft loans, to support its real estate economy. As a result of these stimulus e_orts, some key sectors got boosted. In 2024, the Japanese Govt. also announced an economic stimulus package of US$ 250 bn. US economy performed relatively well in CY 2024. The US Federal Reserve cut its benchmark interest rate twice by a total of 0.75% to a level of 4.25-4.5% per annum, the _rst time in four years. The Fed Reserve gained greater con_dence that in_ation was moving sustainably toward 2% and judged that the lowering of interest rates was necessary in view of rising unemployment. However, US economy started giving warning signals from the beginning of CY 2025, as US stock markets fell, consumers turned pessimistic and US economy contracted in Q-1 at an annualized rate of 0.5%. However, US could _nalise tari_ deals with major economies such as EU & Japan, and thus could avoid protracted trade wars.

In CY 2024, the EU economy faced signi_cant challenges, marked by economic stagnation, trade fragmentation and geopolitical uncertainty, compounded by the ongoing war in Ukraine and strained relations with the US. Europes biggest economic engine, Germany, experienced economic contraction for two successive years.

As per the IMF World Economic Outlook July25, global growth is projected at 3.0% for 2025 and 3.1% in 2026. This re_ects lower average e_ective US tari_ rates than announced in April; an improvement in _nancial conditions, including due to a weaker US dollar; and _scal expansion in some major jurisdictions. Global headline in_ation is expected to fall to 4.2% in 2025 and 3.6% in 2026.

Risks to the Outlook are tilted to the downside. A rebound in e_ective tari_ rates could lead to weaker growth. Geopolitical tensions could disrupt global supply chains and push commodity prices up. Larger _scal de_cits or increased risk aversion could raise long-term interest rates and tighten global _nancial conditions.

(Real GDP Growth Annual Percentage Change)

	Actual		Projections
	2024	2025		2026
World Output	3.3	3.0		3.1
Advanced Economies	1.8	1.5		1.6
United States	2.8	1.9		2.0
Euro Area	0.9	1.0		1.2
Japan	0.2	0.7		0.5
Emerging Market and Developing Economies	4.3	4.1		4.0
China	5.0	4.8		4.2
India	6.5	6.4		6.4
Brazil	3.4	2.3		2.1
Russia	4.3	0.9		1.0

In case of United States, with tari_ rates settling at lower levels than those announced on 2nd April and looser _nancial conditions, the economy is projected to expand at a rate of 1.9% in 2025. This is 0.1% higher than the April forecast, with some o_set from private demand cooling faster than expected and weaker immigration. Growth is projected to pick up slightly to 2.0% in 2026.

For European Union, growth is expected to accelerate to 1.0% in 2025 and to 1.2% in 2026. This is an upward revision of 0.2% point for 2025. The forecast for 2026 is unchanged from that in April. Revised defense spending commitments are expected to have an impact in subsequent years.

With regard to the Emerging Market and Developing Economies, growth is expected to be 4.1% in 2025 and 4.0% in 2026. Relative to the forecast in April, growth in 2025 for China is revised upward by 0.8% to 4.8%, re_ecting stronger than expected activity in the _rst half of 2025 and signi_cant reduction in US–China tari_s. In case of India, growth is projected to be 6.4% in 2025 and 2026, with a slightly upward revision, re_ecting a more benign external environment than assumed in the April forecast.

As per Organisation for Economic Co-operation and Development (OECD) Economic Outlook Report June 2025, global economic prospects are weakening, with substantial barriers to trade, tighter _nancial conditions, diminishing con_dence and heightened policy uncertainty projected to have adverse impacts on growth. The Outlook projects global growth slowing from 3.3% in 2024 to 2.9% in 2025. The slowdown is expected to be most concentrated in the United States, Canada, Mexico and China, with smaller downward adjustments in other economies.

GDP growth in the United States is projected to decline from 2.8% in 2024 to 1.6% in 2025. In the Euro area, growth is projected to strengthen modestly from 0.8% in 2024 to 1.0% in 2025. Chinas growth is projected to moderate from 5.0% in 2024 to 4.7% in 2025.

As per World Bank Global Economic Prospects Report, June2025, global growth is slowing due to a substantial rise in trade barriers and the pervasive e_ects of an uncertain Global Policy Environment. Growth is expected to weaken to 2.3% in 2025, with deceleration in most economies relative to last year. This would mark the slowest rate of global growth since 2008, aside from outright global recessions.

Indian Economic Environment

India, the worlds fourth-largest economy, has emerged as the fastest-growing major economy and is on track to become the worlds third-largest economy with a projected GDP of US$ 7.3 trillion by the year 2030. Indias GDP grew by 6.5% in FY 2024-25, as compared to 8.2% last year. Agriculture growth accelerated to 4.6% in FY24-25, which is a signi_cant rise from 2.7% in the previous year. Construction sector grew by 9.4%, a decline from the growth of 10.4% in the FY 2023-24. Manufacturing sector growth at 4.5%, also is a decline from 12.3% in the previous year. Growth in the Tertiary sector, a composite of all the services sectors, at 7.2%, was lower than the 9% as compared to the previous year. The Services sector has been fuelling growth, both domestically and globally. Indias Services sector, employing approximately 30% of the workforce, has been the steadiest contributor to the Gross Value Added (GVA) in the economy. In FY 2024-25, services propped up GDP growth, while manufacturing has been a_ected by dampening global merchandise trade. The critical role of services exports in strengthening Indias external balance and the increasing ‘servici_cation of the industrial sector adds to its importance to the Indian Economy.

In its Financial Stability Report (June 2025), RBI has stated that Indian economy, a key driver of global growth, is insulated from global jitters on the back of buoyant domestic demand, strong macroeconomic fundamentals and prudent Government policies. RBI observed that the Indian economy is expanding at a robust pace and with in_ation gradually easing, the same is contributing to overall macroeconomic and _nancial stability.

Indias merchandise exports during FY 2024-25 were US$ 437.4 bn., up by 8.7% and imports at US$ 720.24 bn. also increased by 6.2%, as compared to previous FY, thereby, leading to a merchandise trade de_cit of US$ 282.82 bn., up by 17.3%. During FY 2024-25, Indias total trade exports (merchandise & services) were US$ 820.93 bn., up by 5.5%, while total trade de_cit of US$ 94.26 bn., was up by 20.24%, as compared to the previous _scal. The uptick in trade activity re_ects sustained global demand recovery as well as Indias continued integration into global supply chains.

According to Federation of Automobile Dealers Associations (FADA), total domestic automobile retail sales in India reached 2.61 crore units in FY 2024-25, registering a year-on-year growth of 6.46%. A signi_cant contributor to this growth was strong demand from rural regions, buoyed by favourable agricultural outcomes and improved _nancing access. The overall performance re_ects continued consumer con_dence and broad-based recovery in mobility demand across segments.

The BSE Sensex breached the 85,000 mark in September, 2024, re_ecting strong investor optimism driven by robust corporate earnings, sustained economic growth, and improved liquidity conditions. However, the index witnessed correction in the second half of the _scal due to rising global uncertainties, including concerns over potential U.S. tari_ escalations, geopolitical tensions, and capital out_ows from emerging markets. By the end of FY 2024–25, the Sensex closed at 77,414.

The Indian Rupee ended FY 2024-25 at a low of 85.53/US$ on account of slowing FDI _ows, weak manufacturing export growth and narrowing policy rate di_erential with the US. Indias industrial growth moderated in FY 2024–25, with the Index of Industrial Production (IIP) expanding by 4.0%, down from 5.9% in the previous year. This marked the slowest pace of industrial growth in the last three years. The infrastructure sector, a key driver of core industrial demand including steel, also witnessed a deceleration, growing at 4.4% in FY 2024-25 as against 7.6% in FY 2023-24. The slowdown re_ects a combination of global demand softness, base e_ect, and normalisation of post-pandemic investment cycles.

Indias in_ation remained well-anchored throughout FY 2024-25, with the Consumer Price Index (CPI) declining to 3.34% in March, 2025, its lowest level in _ve years and comfortably below the Reserve Bank of Indias 4% target. In a signi_cant move to support a_ordable housing, the Union Cabinet approved a revamped Pradhan Mantri Awaas Yojana (Gramin and Urban) with a total outlay of Rs.4.35 lakh crore over the next _ve years, which shall support demand for steel.

The Union Budget 2025-26 introduced personal income tax relief for the middle class, aimed at boosting disposable incomes and household consumption. Re_ecting strong economic momentum and improved tax compliance, GST collections in FY 2024-25 stood at an all-time high of Rs.22.08 lakh crore, marking a 9.4% growth over the previous _scal. The number of active taxpayers has also seen a sharp rise. As of 30th April, 2025, there were over 1.51 crore active GST registrations. In a survey conducted by Deloitte, 85% respondents had a positive GST experience.

The latest Economic Survey of India, projects Indias economy to expand in the range of 6.3%–6.8% in FY 2025-26. Further, fundamentals of the domestic economy remain robust, with a strong external account, calibrated _scal consolidation and stable private consumption. Headwinds to growth include elevated geopolitical and trade uncertainties and possible commodity price shocks.

The World Bank has pegged Indias economic growth projection at a lower level of 6.3% for FY 2025-26 from 6.7%, projected in January, citing dampened export and lower investment growth. As per OECD, Indias economy is expected to grow a tad slower at 6.3% in FY 2025-26, as compared with the earlier expectations of 6.4%. IMF has projected Indias growth to be 6.4% in 2025 and 2026, re_ecting a more benign external environment than assumed in the April forecast. To support the economy, in June25, RBI in addition to slashing Repo Rate by 50 basis points to 5.5%, also reduced Cash Reserve Ratio (CRR) by 100 basis points, to 3%. The policy rate easing, combined with the liquidity increase for banks, is expected to improve credit _ow and support demand in the economy.

World Steel

Global Crude Steel production during CY 2024 stood at 1882.6 million tonnes (MT), re_ecting a marginal decline of 0.8%, over the previous year. Chinas Crude Steel output fell to 1005 MT, down 1.7%, marking the production in _ve years. Industry experts believe CY 2024 could be the last year China produces over 1 billion tonnes, as structural shifts in its economy begin to reshape long term demand.

During FY 2024-25, Global steel prices trended downward, pressured by ample supply, muted demand and declining raw material costs, leading to weaker pro_tability for steel producers worldwide. In China, the continued property sector slump and reduced infrastructure investment by local governments sharply impacted domestic steel demand. Notably, approximately 55% of Chinas steel consumption is tied to the construction sector. Consequently, Chinas steel exports surged to 110.7 MT in 2024, up 22.7% year-on-year, as producers sought to o_oad excess supply. According to the China Iron and Steel Association (CISA), domestic steel consumption in China is expected to decline to around 900 MT in 2024 and remain near that level over the medium term. The Chinese government has provided limited stimulus to the steel sector, focusing instead on reorienting its economy toward high-tech and green sectors.

In May 2024, the United States increased tari_s on Chinese steel and aluminum imports to 25%, up from the previous range of 0–7.5%. Further, in February 2025, the U.S. announced a blanket 25% tari_ on all steel imports, leading to a sharp increase in domestic steel prices.

Meanwhile, the European Union extended safeguard measures on steel imports until June, 2026. The EU steel industry faces a structural crisis, marked by weak demand, rising imports, and persistent overcapacity. European steelmakers have responded by cutting output, idling capacity, and downsizing workforces. However, the region is also witnessing a strong push towards decarbonisation, supported by state aid.

As a part of this transition, Tata Steel UK shut down the last Blast Furnace at its Port Talbot Plant, ending over 100 years of traditional steelmaking, and is moving to the Electric Arc Furnace (EAF) route. Similarly, Japanese steel majors like Nippon Steel, JFE, and Kobe Steel are advancing their own EAF transition plans, backed by Government _nancial support. The Chinese steel industry has been signi_cantly impacted by a prolonged property sector downturn, resulting in a steep decline in domestic steel demand and a correction in prices. To o_set weak internal consumption, Chinas Finished Steel exports surged to 90.26 Million Tonnes (MT) in 2024, representing a 36.2% increase over the previous year. Chinas steel exports reached to 110.7 MT in CY 2024, up by 22.7% over previous year, and are still going strong, with 58.15 MT in H1 of 2025, which is 9.2% more than CPLY.

According to the China Iron and Steel Association (CISA), Chinas apparent Crude Steel consumption has already peaked and is projected to decline to around 910 million tonnes in 2025. With elevated production continuing and domestic demand remaining subdued, Chinese steel exports are expected to maintain an upward trajectory in the near term.

According to the OECD, the global steel industry is increasingly burdened by structural overcapacity, which is emerging as a major challenge to long-term sustainability. The OECD Steel Committee projects that global excess capacity in steel production will rise from 602 MT in 2024 to 721 MT by 2027, intensifying pressure on industry pro_tability and market stability.

The crisis is being further aggravated by the continued use of non-market interventions in certain regions. In particular, Chinese authorities have been extending support to domestic steel producers through subsidies, tax concessions, preferential electricity pricing, and non-commercial loan terms, which distort fair competition and contribute to persistent global imbalances in steel trade.

		Top 10 Crude Steel Producing Countries
Rank	Country	2024 (MT)	2023 (MT)	% Change
1	China	1005.1	1028.9	(-)2.3
2	India	149.6	140.8	6.10
3	Japan	84.0	87.0	(-)3.4
4	United States	79.5	81.4	(-)2.3
5	Russia	71.0	76.0	(-)6.6
6	S.Korea	63.6	66.7	(-)4.6
7	Germany	37.2	35.4	5.1
8	Turkey	36.9	33.7	9.5
9	Brazil	33.8	32.0	5.6
10	Iran	31.4	30.7	2.3
11	World	1884.6	1904.19	(-)1.0

Due to ongoing overcapacity and weak demand, Global steel pro_tability in CY 2024 remained under pressure and had not fully recovered from its CY 2023 lows. However, in some markets (e.g. Vietnam, parts of Asia), recovery in construction activity and lower input costs enabled select steel _rms to post signi_cantly stronger earnings yearonyear.

Outlook for Steel Industry

According to the World Steel Association (WSA) in its Short Range Outlook (October 2024), Global steel demand is projected to decline further by 0.9% in 2024, reaching 1,751 million tonnes (MT). However, after three consecutive years of contraction, a broad-based recovery, excluding China, is anticipated in 2025, with Global steel demand expected to grow by 1.2% to 1,772 MT. WSA notes that 2024 was a particularly challenging year for Global steel demand, largely due to continued headwinds in the manufacturing sector, such as tight monetary conditions, elevated geopolitical uncertainty, and declining household purchasing power. The persistent weakness in housing construction, driven by high _nancing costs and limited credit availability, further dampened demand across major markets.

In China, the prolonged downturn in the real estate sector remains the dominant factor a_ecting steel consumption. Steel demand in China is forecast to contract by 3.0% in 2024 and by an additional 1.0% in 2025, re_ecting ongoing structural challenges in the property market. Meanwhile, demand elsewhere is expected to o_set this decline, contributing to a modest global rebound.

Finished Steel Products

		Million T			y-o-y % growth rates
	2023	2024(f)	2025(f)	2023	2024(f)	2025(f)
EU(27) & UK	138.7	136.6	141.4	(-)8.7	(-)1.5	3.5
Other Europe	44.7	42.5	42.2	14.7	(-)5.0	(-)0.7
Russia & CIS	60.3	60.5	60.0	11.5	0.3	(-)0.8
USMCA	132.5	131.3	133.4	(-)0.3	(-)0.9	1.6
Central and S. America	45.7	45.6	47.8	1.0	(-)0.3	4.8
Africa	35.4	37.1	38.9	0.5%	4.8%	4.8
Middle East	54.2	56.9	58.7	4.2	4.9	3.3
Asia and Oceania	1255.5	1240.5	1249.1	(-)1.2	(-)1.2	0.7
World	1767.0	1750.9	1771.5	(-)0.8	(-)0.9	1.2

E_orts to decarbonize the global steel industry are gaining momentum, with countries and companies accelerating the transition toward green steel production. In Europe, steelmakers are moving away from traditional Blast Furnace–Basic Oxygen Furnace (BF–BOF) methods, supported by substantial government funding and regulatory backing.

Indian Steel Outlook

India continued to lead global steel demand growth during FY 2024–25. As per the World Steel Association (WSA) Short Range Outlook (October, 2024), Indias Finished Steel demand grew by 8.0% in 2024, following a robust 14.8% growth in 2023, and is projected to rise further by 8.5% in 2025, the highest among all major steel-consuming nations. Since 2021, India has emerged as the strongest driver of Global steel demand, driven by expansion across all steel-using sectors, particularly infrastructure. By 2025, steel demand in India is expected to be approximately 70 million tonnes higher than in 2020, underlining the scale of Indias infrastructure-led growth momentum.

WSA SRO October24 - India Finished Steel Consumption

2023	2024(f)	2025(f)	2023	2024(f)	2025(f)
(MT)	(MT)	(MT)	% chg. y-on-y	% chg. y-on-y	% chg. y-on-y
132.8	143.4	155.6	14.4	8.0	8.5

FY 2024–25 marked a milestone for the Indian steel industry, with Crude Steel production reaching 151.9 million tonnes (MT) and Finished Steel consumption touching 152.01 MT despite global challenges, re_ecting year-on-year growth of 5.3% and 11.5%, respectively. However, the year was also marked by rising imports and subdued exports. Steel imports rose by 14.8% to 9.55 MT, while exports fell sharply by 35.1% to 4.85 MT, amid weak global demand and aggressive export push from China. As per CRISIL, while strong domestic demand remained a bright spot, the in_ux of cheaper steel imports exerted considerable pressure on Indian producers.

	Finished Steel
Parameters	FY24-25 (MT)	% change y-on-y
Gross Production	146.56	5.3
Imports	9.55	14.8
Exports	4.85	(-)35.1
Consumption	152.01	11.5

In FY 2024-25, international steel prices remained under pressure due to weak Global demand and a sharp increase in steel exports from China, which led to supply overhang in key markets. As a result, Indian steel producers shifted focus towards serving strong domestic demand, as exports became less pro_table amid narrowing margins. Despite healthy domestic consumption, Indias steel prices declined steadily throughout the year, weighed down by rising imports. Notably, domestic steel prices fell to three-year lows, which signi_cantly impacted the bottom line of Indian steel companies.

Simultaneously, ICRA cautioned that the imposition of a 25% universal tari_ on steel imports by the United States could potentially divert global shipments to India, exacerbating the price pressure.

Rising imports at predatory prices and dumping concerns prompted the Government of India to impose a 12% provisional safeguard duty in April, 2025 on Flat Steel imports for a period of 200 days. This timely measure helped lift domestic steel prices, which had fallen to a three-year low during the _scal, impacting pro_tability across the industry.

Despite strong consumption, the price decline was driven by elevated imports, underscoring the need for timely trade policy interventions.

According to the Economic Survey of India, the sustained expansion in the steel sector was supported by large-scale infrastructure projects, housing initiatives, and rural and urban development programs, underpinned by the National Steel Policy and the Production-Linked Incentive (PLI) Scheme. As per the report by Steelmint, Construction and infrastructure sectors accounted for an estimated 59% of total steel consumption in FY 2024–25, followed by engineering and packaging (12%), the automobile sector (9%) and Capital Goods, Consumer Goods & Railways at 9%. This trend re_ects the ongoing infrastructure-centric growth strategy of the Indian economy.

To cater to rising domestic demand and reduce import dependence, major private steel producers announced ambitious expansion plans.

The year also marked progress in the transition toward Green Steel production. The Ministry of Steel introduced a classi_cation framework for ‘Green Steel, based on emission intensity: y Five-star rating: Emission intensity below 1.6 tCO_ per tonne of Finished steel y Four-star rating: 1.6–2.0 tCO_/tfs y Three-star rating: 2.0–2.2 tCO_/tfs In alignment with this transition, Indias largest 25 MW green hydrogen project is being established at Vijayanagar, aimed at supporting green steel manufacturing using renewable hydrogen.

B. RISKS AND CONCERNS

Regulatory and Operational Risks

Your Company continues to encounter a complex set of regulatory and operational challenges across its mining assets, impacting raw material security, project execution timelines, and revenue generation capabilities. y Pending Closure of Show Cause Notices–Chiria & Gua Leases (Jharkhand) Legacy Lease compliance issues arising from six Show Cause Notices (SCNs) issued in May, 2020 remain partially unresolved. Although _ve Leases have seen recommended relief, the Jhillingburu-I Lease, critical for Manganese extraction and infrastructure for the 10 MTPA Gua Iron Ore project, awaits full regulatory closure. Despite full compliance, production from the Topailore Lease is on hold, impacting mineral dispatches to SAIL Steel Plants. The Company is pursuing resolution through high-level State Government engagements. y Mining Restrictions-Chiria Iron Ore Leases

Nearly 1.4 billion tonnes of high-grade Iron ore at Chiria remains locked due to being designated as a

"No Mining Zone" under MoEFCCs Saranda forest plan. This restriction, unchanged since 2018 despite repeated follow-ups, limits access to approximately 35% of SAILs total Iron ore reserves, severely impacting long-term resource planning. y Revocation of Prospecting License For Thakurani Block-A (Odisha) Odisha State Governments revocation of SAILs Prospecting License (PL) under the amended MMDR Act, after the lapse of Gazette Noti_cation beyond 2024, has disrupted access to a high-quality ore source vital for SAIL Steel Plants. Though legal and ministerial representations have been made at the highest levels, the matter remains unresolved, posing strategic risks to operations. y Commercial Sale of Dump Fines-Gua Mines (Jharkhand) While captive use of low-grade _nes was permitted in October, 2023, commercial sale clearance is still awaited. This limits monetisation of nearly 70 million tonnes of dump _nes, with 33 MT alone at Gua Mine, representing untapped _nancial potential and sub-optimal resource utilization. y Non-allotment of Alternate Coking Coal Blocks- Sitanala and Parbatpur

Following the return of previously allotted Coking Coal Blocks due to area reduction, SAILs e_orts to obtain replacements have stalled, and Ministry of Coal terminated the allocation and instructed invocation of the bank guarantees where a partial relief has been granted by the Delhi High Court. Legal proceedings are continuing, but the lack of alternative Coal Blocks hampers e_orts to reduce import dependence and improve domestic coal security. y Stage-II Forest Clearance Delay-Kiriburu-Meghahatuburu (Jharkhand)

Stage-II Forest Clearance for the South-Central Block has been pending since 2010, despite compliance with a_orestation and conservation commitments. The matter is _nally up for review by the Forest Advisory Committee (May, 2025), but the delay has already impacted development of South-Central Blocks, restricting production and a_ecting SAILs raw material supply chain. y Ramanadurga Forest Range Lease Delay (Karnataka) In-spite of reservation of 150 acres in 2019 for SAIL/VISL, procedural delays including disinvestment uncertainties and lack of statutory clearances have hampered Lease execution. With the one-time extension nearing its end (Feb, 2025), a fresh extension request has been submitted with the intervention of the Ministry of Steel. Any further lapse, could a_ect long-term Iron ore sourcing for VISL, critical for ensuring raw material security. y Rowghat Iron Ore Mine Development Delays- Bhilai Sector

In-spite of land acquisition and appointment of Mine Developer cum Operator (MDO), development of Rowghat Iron Ore Mine has remained sluggish. With critical delays, contractual breaches, and inadequate progress from the MDO, SAIL has issued a _nal cure notice. Simultaneously, the Dalli–Rowghat Railway line is almost ready. Misalignment between mining and rail timelines could disrupt raw material supply to Bhilai Steel Plant. y Suspension of Operations- Jitpur Colliery (Jharkhand)

Operations remain halted due to safety concerns from rising water levels in adjacent abandoned mines. With the intervention of Directorate General of Mines Safety (DGMS) and the risk of equipment loss due to industrial unrest, SAIL has opted to cease underground operations e_ective August, 2025. This situation underlines serious coal sourcing and asset preservation challenges. y Disruptions in Ore Transport-Dhobil to Manoharpur Corridor

Forest clearance issues and recurring disruptions due to PMGSY work and local resistance, have made ore transportation (approx. 0.75 MTPA) from Dhobil unreliable. While the Jharkhand High Court has granted interim relief, the risk of further logistical blockage remains high, threatening supply continuity.

The above risks reiterate the growing interdependence between mining, regulatory clearances, logistics, and operational planning. SAIL, is proactively engaging with multiple stakeholders viz. Central Ministries, State Authorities, Courts, and Contractors, to ensure risk mitigation, raw material continuity, and project alignment. However, persistent delays and regulatory unpredictability may continue to pose a material impact on the Companys production strategy, _nancial outcomes, and long-term sustainability.

Market and Revenue Risks y Price Volatility Risk

Steel prices continue to remain volatile due to global economic _uctuations and raw material cost swings. Although Indias steel consumption grew by 11.50% in FY 2024-25, price instability may impact revenue realization. SAIL mitigates this through a robust order booking system, a wide Tier-1 and Tier-2 distributorship network, and focused sales of downstream and ready-to-use products. Further, export diversi_cation and Government advocacy on tari_ measures also form part of the strategy.

y Export Market Risk

Intense global competition and volatile international prices may constrain revenue growth from exports. SAIL is focusing on geographically closer markets (SAARC nations and Europe) and diversifying its export basket with products from multiple Plants, including BSL, ISP, DSP, and RSP. y Brand Misuse Risk

Unauthorized use of SAILs Brand identity may lead to revenue loss and Brand dilution. To counter this, Brand guidelines have been formalized, awareness materials distributed, and a caution notice issued on SAILs o_cial website. In addition to this, Branding initiatives are also reinforced through brochures, digital presence, and Tiered retail channel manuals. y Risk of Overcapacity in Domestic Steel Market

The Indian steel sector is in a signi_cant expansion phase, with almost all major producers adding capacity. SAIL is undertaking a major growth plan involving capital expenditure of around Rs.1 lakh crore to raise its Crude Steel capacity from the current ~20 Million Tonnes Per Annum (MTPA) to about 35–37 MTPA by 2030.

If the overall domestic capacity exceeds demand growth, it could exert sustained downward pressure on steel prices. For SAIL, this scenario may erode pro_t margins and weigh on _nancial performance, as higher interest and depreciation costs from the new investments begin impacting the pro_t and loss account.

Supply Chain Risks y Import Restrictions on Critical Spares

Restrictions on imports from land-border sharing countries pose a risk of non-availability of critical spare parts, particularly where no indigenous alternatives exist. This may impact operations across key production units. To mitigate the risk, SAIL is pursuing approvals for procurement via Global Tender Enquiry (GTE) for items up to Rs.200 crore. Additionally, an indigenization drive has been launched by publishing production unit-wise item lists on the SAIL Tender website to attract domestic vendors. y Disruption in Imported Coking Coal.

The supply of imported coking coal remains vulnerable due to concentration of vendors and overdependence on speci_c geographies. To mitigate this risk, SAIL is expanding its vendor base through the Expression of Interest (EOI) route and diversifying sourcing by exploring alternate coal-producing countries such as Russia, Mozambique, and others.

C. SWOT ANALYSIS

D. OUTLOOK

International Monetary Fund (IMF) in its July 25 Report, has noted that the Global Economy is navigating a critical phase. While early signs of stabilization emerged through much of 2024 following a prolonged period of unprecedented disruptions, the resurgence of protectionist trade policies and geopolitical tensions have renewed uncertainty, once again testing global economic resilience. Global growth is projected at 3.0% for 2025 and 3.1% in 2026. Since February 25, the United States has imposed waves of tari_s, prompting retaliatory measures from trading partners and reshaping global trade dynamics. Consequently, downside risks from potentially higher tari_s, elevated uncertainty and geopolitical tensions persist.

According to the World Steel Association (WSA), Global steel demand, excluding China, is expected to rebound in 2025 by 1.2%, reaching 1,772 million tonnes (MT), following three years of decline. The Global economy is forecasted to grow steadily at 3.2% in 2024, albeit with underlying risks such as persistent in_ation and heightened trade frictions.

India remains a standout performer in the global landscape. The IMF has revised Indias 2024 GDP growth forecast upward to 7.0%, citing improved rural consumption and resilient domestic fundamentals. Other agencies have similarly projected Indias growth in the range of 6.6% to 7.0% for FY 2024-25. For FY 2025-26, Indias GDP growth is estimated to range between 6.3% and 6.8%, supported by a strong external account, calibrated _scal consolidation, and stable private consumption.

Indias domestic Finished Steel Demand is expected to grow by 8.2% in both 2024 and 2025, underpinned by the Governments sustained focus on infrastructure development. The Union Budget for FY 2024-25 reinforces this emphasis with enhanced capital expenditure allocations for roads, railways, and housing.

Nevertheless, certain headwinds persist. Elevated coking coal prices, rising steel imports from China, weak global steel prices, intensifying competition from domestic capacity additions, and geopolitical uncertainties could weigh on margins and pricing stability. Despite these challenges, the Government of Indias long-term vision to expand steel production capacity to 500 MTPA by 2047 and the robust fundamentals of the Indian economy o_er a supportive backdrop for sustainable industry growth.

E. REVIEW OF FINANCIAL PERFORMANCE

1. FINANCIAL OVERVIEW OF SAIL

SAIL achieved sales turnover of Rs.1,01,715.74 crore during the Financial Year (FY) 2024-25, which was lower by 2.71% as compared to corresponding period of last year (CPLY) turnover of Rs.1,04,545.09 crore. During the FY 2024-25, the Pro_t before Tax and Pro_t after Tax was Rs.3,008.82 crore and Rs.2,147.96 crore respectively as compared to CPLY Pro_t before Tax and Pro_t after Tax of Rs.3,687.67 crore and Rs.2,733.11 crore respectively. The comparative performance of major _nancial parameters during the FYs 2024-25 and 2023-24 is given below:

(Rs. crore)

Particulars	2024-25	2023-24
Sales Turnover	101715.74	104545.09
Pro_t Before Interest, Taxes, Depreciation andAmortisation (EBITDA)	11763.80	12279.77
Less: Interest and Finance Charges	2792.77	2473.81
Less: Depreciation	5649.57	5277.45
Pro_t Before Exceptional/Abnormal Items andTax	3321.46	4528.51
Less: Exceptional items Gain(-)/Loss (+)	312.64	840.84
Pro_t(+)/ Loss(-) before tax	3008.82	3687.67
Less: Provision for taxation	860.86	954.56
Pro_t(+)/Loss(-) after Tax	2147.96	2733.11
Other Comprehensive Income	-241.30	-122.17
Total Comprehensive Income (+)/Loss(-)	1906.66	2610.94
Net Worth	55656	54131
EBITDA to Net sales (%)	11.57	11.75
Return (PAT) on Net worth (%)	3.86	5.05
EBITDA to average capital employed (%)	17.34	19.06
Earnings per share of Rupee 10/- each	5.20	6.62
Debt Equity Ratio	0.66:1	0.67:1
Current Ratio	0.90:1	0.90:1
Debtors Turnover Ratio (Days)	27	29
Inventory Turnover Ratio (Days)	126	121
Interest Coverage Ratio (No. of times)	1.95	2.32
Operating Pro_t Margin (%)	6.01	6.69
Net Pro_t Margin (%)	2.10	2.59

During the Financial Year 2024–25, the Companys turnover stood at Rs.1,01,716 crore, re_ecting a decline of 3% over the corresponding period last year (CPLY). This was primarily due to a 7% reduction in Net Sales Realisation (NSR) of Mild Steel to some extent compensated by a 3% increase in sales volume. The Pro_t Before Tax (PBT) stood at Rs.3,008.82 crore and Pro_t After Tax (PAT) at Rs.2,147.96 crore, lower than the CPLY PBT of Rs.3,687.67 crore and PAT of Rs.2,733.11 crore, due to multiple cost and revenue factors.

The decline in pro_tability over CPLY is largely attributable to Lower NSR of saleable steel and reduced revenue from coal chemicals and by-products, Lower revised realization from rail prices, Higher consumption of power and indigenous coal, Increased burden rates and lower stock valuation, Higher expenses on repair & maintenance, water charges, insurance, and security, Loss due to foreign exchange _uctuation, and Increased interest charges and depreciation.

Despite these pressures, pro_tability was partially cushioned by Lower imported coal/coke prices, Improved techno-economic parameters (e.g. BF productivity, coke rate, speci_c energy consumption), Reduced usage of imported raw materials (coal, limestone), Lower expenditure on stores, spares, salaries, and wages, Reduced royalty rates, Income from trading activities and higher dividend income, Favourable impact of certain exceptional items.

In terms of key _nancial ratios, Debtors Turnover Ratio declined due to a proportionally larger drop in debtors than in turnover, Inventory Turnover Ratio showed a marginal improvement over the previous year, Debt-Equity Ratio marginally improved due to a proportionately higher increase in net worth relative to borrowings, Interest Coverage Ratio decreased as EBIT declined while interest and _nance charges rose over the CPLY.

1.1. Cost Control Measures

Strategic focus on innovation and process optimization through continuous R&D and productivity initiatives led to meaningful reductions in cost, enhancement in product quality, and increased value addition.

Operational e_ciency at Blast Furnaces improved via key enablers such as higher Oxygen Enrichment and elevated Hot Blast Temperatures, contributing to better fuel e_ciency and output. Material e_ciency gains were achieved through increased Pulverised Coal Injection (PCI), enhanced pellet usage in burden mix, and optimization of ore _nes quality and feed ratios.

Phasing out of obsolete and underperforming assets allowed for improved overall productivity and higher capacity utilization across operational units.

1.2 Marketing

During FY 2024–25, your Company undertook several strategic marketing and business initiatives to reinforce and expand its leadership position in the highly competitive domestic steel market. Through a sustained focus on product innovation, brand development, niche marketing, digital enablement, customer servicing, and market penetration & diversi_cation, SAIL continues to strive toward continuous improvement and long-term business growth.

In alignment with these e_orts, several new value-added and niche-grade steel products were successfully developed and commercialized in a strategic manner to cater to evolving industry demands and tap into emerging sectors. Key product introductions during the year include: HSFQ 550 (High Strength Formable Steel): For automotive component applications.

HT LPG grade IS 15914 HS 345 (2.2 mm ? 1160 mm): For LPG cylinder manufacturing.

API PSL2 X46–X60: For Oil & Gas pipeline infrastructure.

ASTM A572 Grade 65 with Si 0.06%: Designed for monopole structures.

Wider gauge IS 11587 WR-Fe490H (1600 mm & above): For railway wagons and E350BR (2/2.2 ? 1200 mm) for the solar energy sector.

28MnB5 and similar grades: Tailored for agricultural implements and farm equipment. High-Strength Cold Rolled (CR) grades: Including 440/470/550/600 LA and IS 18316 CR for stamping and precision components.

LRPC (Low Relaxation Pre-Stressed Concrete Strands): In 11 mm and 12 mm diameters, widely used in pre-stressed concrete girders for roads, bridges, _yovers, and metro projects.

These developments reinforce SAILs commitment to product di_erentiation, value addition, and customer-centric growth, positioning the Company to better address the changing needs of infrastructure, automotive, energy, and manufacturing sectors. Beyond the conventional sales strategies, the Company undertook a range of targeted initiatives in FY 2024–25 to strengthen market presence, drive retail expansion, deepen customer engagement, and reinforce its position as Indias leading steel producer.

Retail Network Expansion & Distribution Strategy

SAIL operates an extensive retail footprint with over 4,750 dealers across India. As of April 1, 2025, the two-tier distribution network included 59 Tier-2 distributors, through whom 13.27 lakh tonnes of TMT were supplied, registering a 40% growth over the previous year.

The Tier-1 distribution system, catering to Hot Rolled, Cold Rolled, Galvanized Products, Electrical Steels, PM Plates, Structural, Wire Rods, and Pipes, comprised 67 distributors and contributed signi_cantly to enhancing outreach to small and medium B2B customers by o_ering single-window service and value-added support.

Overall, 28.82 lakh tonnes of steel were sold through the retail segment during FY 2024–25, including 15.54 lakh tonnes through Tier-1 and 13.27 lakh tonnes of TMT through Tier-2 networks.

Rural Outreach & Brand Penetration

The "Gaon Ki Ore" campaign continued as a grassroots awareness initiative to promote steel usage in rural India. Over 400 workshops were conducted during the year to engage local masons and small consumers.

The Companys _agship retail brand, "SAIL SeQR" reinforcement bars, achieved a record sale of

12.85 lakh tonnes, re_ecting a 51% YoY growth. This brand is gaining traction as a trusted name for quality and safety in rural and semi-urban housing.

Digital Enablement & Customer Interfaces

The Marketing function of SAIL earned the ISO 27001:2022 certi_cation for its robust Information Security Management System.

Key digital initiatives included:

* Implementation of Integrated Vehicle Tracking System (IVTS) across India for enhanced logistics visibility.

* Enhancements to the SAIL Grahak Sampark app for real-time customer service and issue resolution.

* Launch of TMT Estimator on the SAIL-Suraksha platform with INSDAG to assist consumers in estimating rebar requirements.

* Integration with SBI for automated payment reconciliation in SAP, ensuring prompt accounting of customer receipts.

Structural Solutions & Branding

The Company promoted its structural steel brand "SAILNEX", comprising Parallel Flange Sections produced at IISCO and Durgapur Steel Plants. Through webinars, customer meets, and collaborations with designers and architects, SAIL strengthened the adoption of steel in design and construction, positioning "SAILNEX" as a premium product for infrastructure.

Marketing Services & Workplace Safety

SAIL issued product-wise material handling safety guidelines and organized regular safety training and medical camps at its Central Marketing Organisation (CMO) warehouses to ensure workforce welfare and operational safety.

StrategicProjectsandNation-BuildingContributions

SAIL continued its legacy of supporting infrastructure and national priority projects. Major supplies were made to:

* Metro Projects (Delhi, Kanpur, Chennai, Patna),

* Highways & Expressways (Ganga, Lucknow–Kanpur, Meerut–Budaun, Delhi–Mumbai),

* Rail Links (Rishikesh–Karnprayag, Sevoke–Rangpo),

* Bridges & Tunnels (Dhubri–Phulbari, Koshi-Bagalpur),

* Hydro & Nuclear Projects,

* River Linking & Irrigation Projects (ISP-Parwati, Kalaburgi, Sanwer, Kaleshwaram),

* Real Estate & Civic Infrastructure (Central Vista, Mahakumbh25), and more.

MSME Engagement & Local Industrial Development The MSME Incentivisation Scheme launched by SAIL attracted participation from 150 MSMEs around its Integrated Steel Plants.

Over 1.06 lakh tonnes of steel were supplied under this scheme during FY 2024–25, supporting local entrepreneurship, promoting inclusive industrial growth, and contributing to socio-economic development in plant-adjacent regions.

Marketing Network

As of March 31, 2025, SAIL maintained the largest steel marketing network in the country, comprising:

* 35 Branch Sales O_ces

* 4 Customer Contact O_ces

* 35 Stockyards (20 departmental warehouses + 15 consignment agency yards) This extensive network ensures last-mile connectivity, enhances customer service, and strengthens SAILs distribution reach across diverse geographies.

1.3 Future Outlook – Marketing Strategy & Customer Engagement

In line with its commitment to continuous improvement, your Company remains focused on deepening customer relationships, expanding market reach, and enhancing customer satisfaction through targeted strategic initiatives and digital integration.

Key Marketing Priorities Going Forward:

Maximizing sales through order booking schemes, ensuring e_cient alignment of supply with customer demand cycles.

Strengthening engagement with Key Accounts and Consumers by building strategic, long-term partnerships with high-value customers to ensure sustained business volumes and mutual value creation.

Expanding Tier-1 Distribution Network to cater to B2B industrial segments by o_ering not only timely supplies but also integrated Value Added Services (VAS).

Enhancing penetration in the retail market through a robust Tier-2 distribution system focused on delivering SAIL SeQR TMT to end-users, especially in semi-urban and rural markets.

Driving growth in Mid-Sized Accounts (MSAs) by deploying data-driven Sales Force E_ectiveness tools and improving servicing capability.

Widening and deepening the distributor–dealer ecosystem to improve accessibility and responsiveness across segments and geographies. Brand promotion initiatives aimed at reinforcing SAILs leadership in quality, reliability, and trust across consumer and industrial segments.

Boosting sales through e-commerce platforms, leveraging digital infrastructure to enhance customer convenience, transparency, and e_ciency.

Customer-Centric Technical Support:

To align with evolving market demands, SAIL has rede_ned the role of its Application Engineers. Their responsibilities now include: Providing technical solutions and support to address customer challenges in steel usage.

Identifying new product applications and emerging demand areas.

Facilitating customized product development by engaging with clients during the design and development phase.

Promoting adoption of SAIL products in specialized applications, strengthening customer loyalty and product relevance.

Strategic Alliances and Contract Manufacturing:

For the _rst time, your Company has entered into a

Contract Manufacturing Agreement with M/s NMDC Steel Ltd. for the supply and marketing of HR products. This strategic alliance aims to: Enhance product mix availability and size _exibility. Expand the customer base across segments.

Improve service quality and customer satisfaction.

Consolidate SAILs presence in critical downstream and industrial applications.

Future Growth Focus Areas:

SAIL is in the process of formulating medium- and long-term strategies centered on: Segment and geography realignment for maximizing realizations.

* Expanding share in value-added and emerging steel segments, including:

* Electricity Transmission Monopoles

* Agriculture Implements

* Precision Tubes

* Wagon Manufacturing

* General Engineering & Fabrication

* Cold Forming and Auto Components

* Solar Energy, PEBs, and Windmills

* Earth Moving Equipment (EME)

* Oil & Gas infrastructure

1.4 Funds Management

During the FY 2024–25, the Companys total borrowings increased modestly from Rs.36,315 crore as on 31st March, 2024 to Rs.36,934 crore as on 31st March, 2025. Despite the rise in borrowings, thedebt-to-equity ratio improved marginally to 0.66:1, compared to 0.67:1 in the previous year, owing to a proportionately higher growth in net worth.

The NetWorth of the Company increased from Rs.54,131 crore to Rs.55,656 crore during the year, re_ecting strengthened _nancial resilience and improved internal accruals.

However, interest and _nance charges on operational accounts increased to Rs.2,793 crore during FY 2024–25, compared to Rs.2,474 crore in the previous year, primarily due to the increased debt burden and associated costs.

Reinforcing the Companys strong _nancial pro_le, the long-term borrowings of SAIL have been rated as: ‘CARE AA – Outlook: Stable by M/s. CARE Ratings; and ‘IND AA – Outlook: Stable by M/s. India Ratings (RBI approved Credit Rating Agencies).

The chart below highlights the _ve-year trend of the Companys Debt and Net Worth, showcasing a consistent increase in net worth and stable debt levels over time, ensuring _nancial prudence and long-term sustainability.

1.5 Contribution to SAIL Gratuity Trust

In alignment with the Companys settlement obligations for gratuity payments, an amount of Rs.811.43 crore was funded by the SAIL Gratuity Trust during the _nancial year. As of 31st March, 2025, the total corpus of the Trust stood at Rs.5,412.01 crore, ensuring adequate provisioning for future gratuity liabilities and re_ecting prudent employee bene_t management.

2. ANALYSIS OF THE FINANCIAL PERFORMANCEOFTHE COMPANY

2.1 Revenue from Operations

(a) Sale of Products

(Rs. crore)

S. No.	Particulars	FY 2024- 25	FY 2023- 24	Change %
1	Sales of Iron and	98359.74	100984.80	-2.60
	Steel Products
2	Sales of Other	3356.00	3560.29	-5.74
	Products
3	Total Sales	101715.74	104545.09	-2.71
	Turnover

Product Portfolio and Sales Mix

During FY 2024-25, your Company continued to o_er a comprehensive portfolio across the mild steel value chain. The product range included Flat Products such as Plates, Hot Rolled (HR) Coils/Sheets, Cold Rolled (CR) Coils/ Sheets, Galvanised Plain and Corrugated Sheets, and Long Products like Rails, Structural, Wire Rods, and Merchant Products. In addition, the portfolio was enriched with Electric Resistance Welded (ERW) Pipes, Spiral Welded Pipes, and Silicon Steel Sheets, contributing to the Companys strong presence across various steel-consuming sectors.

The product category-wise contribution to sales turnover during the _scal year was as follows:

	% of Sales
Products Category
	value
Saleable Steel
Flat Products (including Pipes & Electrical	51
Sheets) (a)
Long Products (b)	39
Integrated Steel Plants – Mild Steel (c = a + b)	90
Alloy & Special Steel Plants - Alloy & Special	9
Steel (d)
Total Saleable Steel (e = c + d)	99
Secondary Products (Pig Iron, Scrap, Coal	1
Chemicals, etc.) (f )
Total (g = e + f)	100

This diversi_ed product mix enables the Company to address the requirements of core sectors such as infrastructure, construction, railways, automotive, energy, and engineering, while also enhancing its market reach and customer value proposition.

(c) Sale of Services – Service Charges

(Rs. crore)

FY 2024-25	FY 2023-24	Change %
23.80	19.93	19.42

Revenue from sale of services increased by about Rs.3.87 crore over the previous year.

(d) Other Operating Revenues

(Rs. crore)

FY 2024-25	FY 2023-24	Change %
738.65	809.57	-8.76

Other operating revenues decreased by about Rs.70.92 crore over previous year mainly due to reduction in export incentives, sale of empties and lower realization from sale of sundries.

2.2 Other Income

(Rs. crore)

FY 2024-25	FY 2023-24	Change %
1134.41	1148.06	-1.19

Other income decreased by about Rs.13.65 crore over previous year primarily on account of lower interest income from customers and other non-operating income.

2.3 Expenditure

Particulars	FY 2024-25	FY 2023-24	Change %
Raw Materials	50810	57619	-11.82
Consumed
Employee	11659	11748	-0.76
Remuneration
& Bene_ts
Finance Cost	2793	2474	12.89
Depreciation	5650	5277	7.07
Other Expenses	29288	28229	3.75

Raw Material Cost: Witnessed a notable decline of 11.82%, primarily due to reduced prices of imported coal and higher utilization of in-house raw materials like iron ore and scrap, contributing to cost e_ciency.

Employee Remuneration & Bene_ts: Declined marginally by 0.76%, mainly due to a natural reduction in manpower resulting from retirements and separations.

Finance Cost: Increased by 12.89% owing to a rise in borrowings and average cost of funds, re_ecting macroeconomic conditions and capital expenditure requirements. Depreciation: Registered an increase of 7.07%, attributable to the capitalization of new assets and facilities during the _nancial year. Other Expenses: Showed a 3.75% rise on account of higher spending on raw material handling, repairs & maintenance, freight outward, and security-related expenses.

This expenditure trend re_ects a judicious balance between operational optimization and strategic investments aimed at long-term competitiveness and growth.

2.4 Contribution to Exchequer

During the Financial Year 2024-25, SAIL contributed Rs.21,155 crore to the exchequer by way of payment of taxes and duties to various Government agencies.

2.5 Non-Current/Current Assets

(Rs. crore)

Particulars	FY 2024-25	FY 2023-24	Change %
NON CURRENT ASSETS
(a) Property, Plant and	65023	65397	-0.57
Equipment
(b) Capital Work-in-Progress	7206	6141	17.35
(c) Right of use Asset	6839	5521	23.86
(d) Investment Property	1	1	0
(e) Intangible assets	1426	1489	-4.24
(f ) Inventories	4592	4625	-0.72
(g) Financial Assets
(i) Investments	1759	1694	3.83
(ii) Loans	951	877	8.44
(iii) Other Financial Assets	622	444	40.12
(h) Income Tax Assets (Net)	451	375	20.27
(i) Other non-current assets	2355	3087	-23.70
TOTAL NON CURRENT	91225	89651	1.76

ASSETS

(Rs. crore)

Particulars	FY 2024-25	FY 2023-24	Change %
CURRENT ASSETS
(a) Inventories	29072	32646	-10.95
(b) Financial Assets
(i) Trade Receivables	7557	8309	-9.05
(ii) Cash and cash equivalents	286	14	1942.86
(iii) Bank balances other than	619	528	17.34
(ii) above
(iv) Loans	23	28	-17.86
(v) Other Financial Assets	1221	1369	-10.81
Income Tax Assets	0	433
(d) Other Current Assets	2911	4541	-35.90
(e) Assets classi_ed as held for	4	15	-73.33
sale
TOTAL CURRENT ASSETS	41693	47883	-12.93
TOTAL ASSETS	132918	137534	-3.35

Non-Current Assets:

The Companys non-current assets increased by 1.76%, reaching Rs.91,225 crore in FY 2024–25 compared to Rs.89,651 crore in FY 2023–24. Key movements include: y Capital Work-in-Progress (CWIP) rose by Rs.1,065 crore (+17.35%) due to continued expenditure in ongoing modernization and expansion projects across Steel Plants. y Right-of-Use (ROU) Assets increased by Rs.1,318 crore (+23.86%), largely attributable to new long-term lease agreements recognized under IND AS 116, which mandates capitalization of leases over a certain duration.

y Other Financial Assets (Non-Current) witnessed a notable rise of 40.12%, mainly due to an increase in long-term advances, security deposits, and interest accrued on deposits related to capital projects. y Intangible Assets declined marginally (-4.24%) due to amortization exceeding additions during the year. y Other Non-Current Assets declined by Rs.732 crore (-23.70%), primarily due to capitalization of earlier advances upon commissioning of projects and settlement of certain pre-paid expenses.

Current Assets:

Total current assets decreased by 12.93%, from Rs.47,883 crore in FY 2023–24 to Rs.41,693 crore in FY 2024-25. Key observations: y Inventories fell by Rs.3,574 crore (-10.95%), majorly due to: Decrease in raw material inventories by Rs.3,606 crore.

Minor reduction in _nished/semi-_nished product stock by _21 crore.

Slight increase in stores, spares, and others by Rs.53 crore. y Trade Receivables reduced by Rs.752 crore (-9.05%), re_ecting better collection e_ciency and higher realization from customers. y Cash & Cash Equivalents rose signi_cantly from Rs.14 crore to Rs.286 crore due to improved cash management and in_ows from operating activities. y Other Current Assets declined by Rs.1,630 crore (-35.90%), primarily due to lower advances and prepaid expenses. y Assets held for sale dropped to Rs.4 crore from Rs.15 crore due to disposal or reclassi_cation of certain assets.

Explanation for Key Line Items: y Right-of-Use (ROU) Assets: The increase re_ects new lease contracts, including plant premises, logistics infrastructure, and warehouses. As per IND AS 116, such leases are capitalized with corresponding liabilities, resulting in higher asset base. y Other Financial Assets (Non-Current & Current): Non-Current: Includes security deposits, advances recoverable after one year, and interest receivables linked to long-gestation projects.

Current: Comprises short-term loans, accrued income, and recoverable claims, which declined due to lower short-term placements and faster liquidation of previous period dues.

Total Assets Movement:

Overall, total assets stood at Rs.1,32,918 crore in FY 2024-25, representing a decline of 3.35% over the previous year (Rs.1,37,534 crore), primarily due to optimization of working capital and better asset utilization.

2.6 Non-Current/ Current Liabilities

(Rs. crore)

Particulars	FY 2024-25	FY 2023-24	Change %
NON-CURRENT LIABILITIES
(a) Financial Liabilities
(i) Borrowings	10101	9568	5.6
(ii) Lease Liabilities	6553	5235	25.2
(iii) Trade Payables
(iv) Other Financial Liabilities	1438	1411	2.0
(b) Long Term Provisions	6095	5724	6.5
(c) Deferred tax liabilities (net)	6422	6178	4.0
(d) Other non-current	493	1860	-73.5
liabilities
Total Non Current Liabilities	31102	29976	3.8
Current Liabilities
(i) Borrowings	19710	21025	-6.3
(ii) Lease Liabilities	569	486	17.1
(iii) Trade Payables	10499	15332	-31.5
(iv) Other Financial Liabilities	9649	10517	-8.3
(b) Other current liabilities	4196	4565	-8.1
(c) Provisions	1387	1290	7.5
(d) Current Tax liabilities (net)	148	209	-29.1
Total Current Liabilities	46158	53424	-13.6
TOTAL (CURRENT + NON	77260	83400	-7.4
CURRENT LIABILITIES)

Non-Current Liabilities:

Non-current liabilities increased by 3.8%, reaching Rs.31,102 crore in FY 2024–25 compared to Rs.29,976 crore in FY 2023–24. Major contributors include: y Long-Term Borrowings rose by Rs.533 crore (+5.6%) due to reduced sales realization amid sluggish market conditions, which led to increased working capital requirement and liquidity pressure. y Lease Liabilities increased by 25.2% (Rs.6,553 crore vs Rs.5,235 crore), primarily on account of new long-term lease contracts recognized under IND AS 116. These included plant infrastructure, warehousing, and logistics facilities for operational expansion and continuity. y Other Financial Liabilities and Long-Term Provisions showed moderate increases due to routine business expansion and provisioning for statutory and employee obligations. y Deferred Tax Liabilities increased marginally by 4.0%, re_ecting timing di_erences between book and tax depreciation and other deferred tax items. y Other Non-Current Liabilities declined signi_cantly by 73.5%, mainly due to:

Clearance or settlement of past statutory dues (e.g. environmental compliance obligations, deferred payables).

Completion of project-related contractual obligations or milestone payments.

Current Liabilities: y Total current liabilities stood at Rs.46,158 crore in FY 2024–25, marking a decrease of 13.6% from Rs.53,424 crore in FY 2023–24. Key changes: y Short-Term Borrowings decreased by Rs.1,315 crore (-6.3%) due to improved collections and working capital management, re_ected in higher realization from trade receivables. y Trade Payables reduced sharply by 31.5% as a result of optimized procurement and payment cycles and clearance of previous dues. y Other Financial and Current Liabilities also declined due to: Settlement of GST and Entry Tax obligations.

Rationalization of payment cycles and vendor engagement. y Current Lease Liabilities increased by 17.1%, in line with expanded lease commitments. y Provisions increased slightly, while Current Tax Liabilities decreased by 29.1% due to lower tax payable after adjustments and advance tax settlement.

Total Liabilities y The total liabilities (current + non-current) declined by 7.4%, indicating stronger _nancial discipline and optimization of obligations. y Lease Liabilities rose due to expansion in leased infrastructure aligned with strategic growth and modernization. y Other Non-Current Liabilities dropped signi_cantly as earlier liabilities were either capitalized, paid o_, or reclassi_ed post-project completion.

3. PLANT-WISE FINANCIAL PERFORMANCE (PROFIT

BEFORE TAX)

(Rs. crore)

Plant/Unit	FY 2024-25	FY 2023-24
Bhilai Steel Plant (BSP)	3481.53	2342.75
Durgapur Steel Plant (DSP)	237.67	351.64
Rourkela Steel Plant (RSP)	20.24	652.91
Bokaro Steel Plant (BSL)	-621.12	822.83
IISCO Steel Plant (ISP)	520.75	109.42
Alloy Steels Plant (ASP)	-48.32	-102.65
Salem Steel Plant (SSP)	-383.09	-286.19
Visvesvaraya Iron & Steel Plant (VISP)	-37.59	-48.93
SAIL Refractory Unit (SRU)	38.33	11.17
Chandrapur Ferro Alloys Plant (CFP)	-59.91	-136.71
Central Units	-139.67	-28.57
SAIL: Pro_t Before Tax (+)/Loss(-)	3008.82	3687.67

F. MATERIALS MANAGEMENT

SAIL implemented multiple strategic initiatives to enhance cost-e_ciency and e_ectiveness in materials procurement and vendor development:

Enhanced Procurement via GeM Portal: y Achieved a total procurement of Rs.10,841.67 crore through the Government e-Marketplace (GeM), including Rs.1,813.39 crore worth of services. y Overall procurement via GeM grew by ~4%, with service procurement witnessing a signi_cant jump of ~76% over the previous year.

SAILs procurement from Micro and Small Enterprises (MSEs) in FY 2024-25 is placed in the Table below:

Particulars	Target (%)	Actual (%)
Total Procurement from MSEs(General, SC/ST & Women)#	25	45.68
Procurement from SC/ST MSEs	4	0.33
Procurement from Women owned MSEs	3	1.65

# for materials & services procurement but without considering imports, proprietary and high value items which cannot be procured from MSEs.

Procurement from Micro and Small Enterprises y Total procurement from MSEs stood at 45.68%, well above the mandatory 25% target. y However, procurement from: SC/ST MSEs was 0.33% (target: 4%).

Women-owned MSEs was 1.65% (target: 3%). y Figures exclude imports, proprietary, and high-value items that cannot be sourced from MSEs.

Vendor Development Initiatives: y Conducted 56 Vendor Development Programs across Plants and Units. y Special focus on SC/ST and Women entrepreneurs, with dedicated sessions on opportunities, item-speci_c requirements, and vendor registration. y Emphasis on mentoring, training, and handholding local MSEs to strengthen the supply ecosystem.

G. FOREIGN EXCHANGE CONSERVATION

Given that SAILs imports signi_cantly exceed its exports, Foreign Exchange Management remains a key priority. The Company is proactively pursuing various strategies to reduce foreign exchange outgo and promote domestic substitution, including: Reduction in Import Dependency: Coking coal remains a major import item. SAIL is focusing on increasing the use of indigenous coal through a blended coal mix, thereby lowering reliance on imported coal and conserving foreign exchange.

Domestic Substitution Initiatives: Emphasis is being placed on sourcing materials and inputs domestically wherever feasible and cost-e_ective, aligned with the Companys technological requirements.

Diversi_cation of Import Sources: E_orts are underway to broaden the supplier base for imported inputs/raw materials to ensure cost e_ciency and supply security.

Policy Support: The Government of Indias Policy of Restricting Global Tenders for Projects up to _200 crore is being leveraged by SAIL to: Encourage domestic participation in procurement. Further conserve foreign currency.

Indigenization Drive: The Company continues to work towardsindigenizing procurement, provided quality, technology, and price benchmarks are met.

H. PROJECT MANAGEMENT AMR SCHEMES

In FY 2024–25, SAIL undertook signi_cant Addition, Modi_cation & Replacement (AMR) Schemes across its major steel Plants, with an investment commitment of approximately Rs.23,479 crore. These initiatives are aimed at sustaining current operations, modernising critical infrastructure, improving e_ciency, and enhancing environmental compliance.

At Bhilai Steel Plant (BSP), major schemes included the rebuilding of Coke Oven Batteries 7 and 8, replacement of Converter Vessels along with associated support systems, and installation of Secondary Emission Control Systems in SMS-II. Further, enhancements were made in the Plate Mill through the installation of a high-pressure primary descaling unit and replacement of Hot Leveller-1. E_ciency and dust control were improved through the upgradation of the BF-7 Stock House De-dusting System. Infrastructure extensions such as the expansion of the Mixer Bay and replacement of two 125+30 T Mixer Cranes were also carried out. Additionally, a 1.0 MTPA Pellet Plant and a 1.0 MTPA Slime Bene_ciation Plant were initiated at Dalli Mines on a Build-Own-Operate (BOO) basis.

At Durgapur Steel Plant (DSP), various schemes were focused on sustainability and infrastructure. These included installation of NDT facilities at the Wheel & Axle Plant, completion of waste water treatment systems at Outfall #1, 2 & 3, and the installation of a 4th stove in BF-4. Power augmentation for the new 1250 TPD oxygen plant (BOO), installation of a new gas-_red boiler, and a new coke oven gas holder were undertaken. Electrical infrastructure was modernized with the replacement of the existing 33KV switchboard with GIS. Projects also included the rebuilding of Coke Oven Battery-4, expansion of billet storage and dispatch facilities, upgradation of ESPs in Sinter Plant-2, installation of a new electric-driven exhauster, and the setup of a new bar mill. BF-3 was upgraded, its stoves relined, and the air pollution control system of Sinter Plant-1 was revamped.

Rourkela Steel Plant (RSP) witnessed major environmental and capacity enhancement projects. These included rebuilding Coke Oven Battery-2 along with augmentation of Coke and Gas Handling Systems, installation of a 1 MTPA Stamp Charge Coke Oven Battery with CDCP and by-product plant , 1000 TPD oxygen plant and power supply provisions for the Oxygen Plant, installation of the 4th Slab Caster with ladle furnace at SMS-II and 2 Mtpa Pellet Plant. Sustainability e_orts were strengthened through construction of a 30 MLD sewage treatment plant at the township, a treatment system for zero liquid discharge, and 0.18 Mtpa micro pellet plant for waste utilization and management. Additionally, engagement of MDO for Taldih mines and installation of a 10 Mtpa loading facility at Barsua Valley were key developments.

At Bokaro Steel Plant (BSL), digital and energy projects took center stage. These included the upgradation of the automation system of the Hot Strip Mill (HSM), installation of a 2000 TPD oxygen plant on BOO basis with its supporting power infrastructure, and the procurement of freight wagons under Indian Railways GPWIS scheme. Power reliability was enhanced by installing a third 220kV line from CTPS to MRS. Several aging components were replaced, including the turbine and auxiliaries for Turbo Blower-5 and Coke Oven Battery-6. The Central Compressor Plants (CCP-I & II) were modernized, and air pollution control systems in Sinter Plant-1 were improved by replacing battery cyclones with ESPs. Equipment upgrades in the RMHP, booster fans at GMBS, _re safety systems, and roll grinders in CRM were also taken up. Secondary emission control in SMS-II converters was a key environmental measure. Engagement of MDO at Tasra Mine was also initiated. Finally, at IISCO Steel Plant (ISP), critical infrastructure enhancement included laying of a new steam pipeline from Power & Blowing Station No.2 to Coke Oven Battery No.10, installation of a 4th Stove in BF-5, and installation of a new Stamp Charge Battery (COB-12) with supporting facilities.

Notably, projects worth around Rs.1,069 crore were completed during FY 2024–25, which include the upgraded automation system at BSL, freight rake procurement, NDT facility installation at DSP, wastewater treatment systems, power supply infrastructure for oxygen plants at RSP and BSL, and the rebuilding of Coke Oven Battery-2 at RSP.

I. IN-HOUSE DESIGN & ENGINEERING

The Centre for Engineering & Technology (CET), an ISO 9001:2015 certi_ed in-house design, engineering, and consultancy arm of SAIL, plays a pivotal role in driving the Companys growth and modernization agenda. CET is entrusted with the preparation of investment proposals and execution support for projects across the steel value chain, from mines to _nishing, ensuring both sustainability and regulatory compliance, particularly in reducing carbon emissions and aligning with evolving environmental norms. Its core competencies span mine planning, mineral bene_ciation, ore loading and transportation, pelletisation, and comprehensive material handling solutions. CETs domain extends further to design and engineering consultancy for sinter and pellet plants, blast furnaces including CDI injection and top recovery turbines, steel melting shops, ladle furnaces, casters, TSCDR units, rolling mills, and associated utility infrastructure such as zero liquid discharge (ZLD) systems, power and oxygen plants, pollution control units, and automation projects.

With a deep understanding of brown_eld complexities, CET maintains a competitive edge in executing modi_cations in operating SAIL plants while also demonstrating capability in green_eld developments. Currently, CET is leading multiple large-scale initiatives including brown_eld expansions of DSP and RSP, and preparing mining plans for development of various iron ore leases across SAIL mines. At Bhilai Steel Plant (BSP), CET is overseeing the upgradation of the Plate Mill with advanced features such as a walking beam furnace, high-pressure descaling, super-accelerated cooling, hot stamping, and a hot leveler. Projects like the installation of new stamp charged coke oven batteries with CDCP units are underway at RSP, BSL, and ISP—the _rst of their kind in SAIL. Coke oven battery rebuilding e_orts are also ongoing at BSP, BSL, and DSP, alongside major blast furnace upgradation initiatives including BF-3 revamps at DSP and BSL and new hot blast stoves at all the _ve integrated plants.

CET is also facilitating critical enhancements such as CDI system augmentation in BFs of BSP and BSL, TRT installation at RSP and BSP, converter shell replacement and ladle furnaces at BSP and ISP, new universal rail and structural mills at BSP, bar mill installation at DSP, and automation upgrades of reheating furnaces at BSLs hot strip mill. Other notable assignments include establishing a product testing lab for NPM and HSM at RSP, setting up CRM at RSP, ZLD projects at DSP, BSL, and RSP, power evacuation infrastructure at DSP and RSP, ESP-based de-dusting systems at BSL and DSP, and comprehensive compressed air and RMHP equipment installations at BSL. CET is also spearheading strategic transformations such as the proposed installation of a new blast furnace (in place of BF-1, 2 & 3) at BSP, secondary emission control systems at SMS-II in BSL, replacement of grinding equipment at CRM-I & II in BSL, and planning for new pellet and bene_ciation plants to meet evolving product quality and environmental benchmarks.

J. RESEARCH & DEVELOPMENT

The Research and Development Centre for Iron & Steel (RDCIS), located in Ranchi, stands as Indias premier research hub in ferrous metallurgy and plays a pivotal role in SAILs innovation-led sustainable growth strategy. Equipped with more than 300 advanced diagnostic tools and 15 specialized laboratories, RDCIS addresses the entire value chain of iron and steelmaking—from Raw Materials to Finished Products. In FY 2024-25, the Centre successfully completed 60 research projects, yielding substantial technical and _nancial bene_ts across the Organization.

RDCIS also advanced several sustainability initiatives, including the use of biochar as a partial replacement for pulverized coal injection (PCI) at RSP, coke breeze substitution with biochar in DSPs Sinter Plant, utilization of LD sludge bricks as coolant in the BOF at BSL, and transfer of waste-to-brick technologies for broader plant use. Notably, RDCIS has been entrusted with a prestigious project under the National Green Hydrogen Mission by the Ministry of New & Renewable Energy for hydrogen injection in blast furnaces. Additionally, the Ministry of Steel approved two major collaborative decarbonization projects, one for developing a pilot-scale hydrogen-based DRI vertical reactor, and another, focused on converting high-carbon ferro manganese to low-carbon grades.

Aligned with market needs, RDCIS developed 23 new niche products during the year. Key developments include R350HT Rails at BSP; High Tensile LPG-grade HR Coils at RSP; 28MnB5 grade HR Coils at BSL; HCR Fe550D TMT rebars at BSP; API 5L X52M PSL-2 HR Coils via non-RHOB route at RSP; LRPC Wire Rods at ISP; ASTM A537 Cl.2 Q&T Plates and multiple HR Coil Variants at RSP; and Low Silicon E350BR grades at BSL.

The year also saw RDCIS intensifying its research collaborations with reputed institutions and academia, resulting in the _ling of 18 patents and 18 copyrights in association with SAIL Plants. Furthermore, 74 technical papers were presented at national and international platforms, and 67 were published in reputed journals, re_ecting the Centres continued commitment to excellence in R&D and technological leadership.

K. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has established robust and e_cient Internal Control Systems aimed at ensuring operational e_ciency, judicious utilization and safeguarding of resources, accuracy and timeliness in _nancial reporting, adherence to laid-down policies and procedures, and compliance with applicable laws and regulations. At SAIL, Internal Audit functions as a multi-disciplinary domain that rigorously reviews, evaluates, and appraises systems and processes, o_ering valuable suggestions for improvement. It supports management in achieving organizational objectives by adopting a systematic and disciplined approach to enhance the e_ectiveness of risk management, thereby contributing to sound corporate governance.

To bolster the Internal Audit function, SAIL continually upgrades the system by ensuring oversight through the Board-level Audit Committee, which safeguards its independence and e_ectiveness. Emphasis is placed on transparency in internal controls, optimizing skillsets of audit personnel, and applying risk-based audit planning. The Annual Audit Plan is carefully formulated to cover key risk areas with a strong focus on system and process audits, aiming for cost savings, revenue optimization, inventory & idle asset review, and better compliance mechanisms.

The Internal Audit framework is further supported by comprehensive policies, guidelines, and procedures. Training and capacity-building of internal audit executives, along with awareness programs for auditees, form key pillars of SAILs proactive internal audit culture. Periodic reviews are carried out, and Audit Findings are presented regularly to the Management and the Audit Committee. Additionally, inputs from the Statutory Auditors on internal control adequacy and _nancial reporting serve to reinforce the integrity and transparency of SAILs _nancial and operational systems.

Cautionary Statement Regarding Forward-Looking Information

Certain statements contained in this Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectations, or predictions may be forward-looking in nature and are intended to be covered under applicable laws and regulations. These forward-looking statements represent the Companys current assumptions, expectations, and forecasts concerning future events, and are inherently subject to uncertainties and risks. Actual outcomes may di_er materially from those expressed or implied due to changes in economic conditions, government policies, market dynamics, and other unforeseen or incidental factors.