The steel sector has been one of the key beneficiaries of robust sales for auto and electrical appliances in the June 2026 quarter, and the resulting demand for various steel products.
And that is reflected in the performance of leading steel companies in the June 2026 quarter with broadly higher price realisations and improved net profit y-o-y (view table below). It does appear that the Middle East crisis has not shown any visible impact on demand from user industries in the quarter.
And while GST rates were not reduced last year for the steel sector, the sector has benefited from a reduction in GST rates for key user industries like autos, amongst other sectors.
Investors on Dalal Street are also bullish on leading steel stocks – SAIL ended 5.8% higher at Rs 194.8 on Wednesday, and it had reached its 52-week high of Rs 209.7 on 14 May, 2026. SAIL, despite its strong growth in net profit in the first quarter of Q1FY27, trades at a discount of 18% to 39.5% to its larger peers (view table below).
Meanwhile, JSW Steel rose 1% to Rs 1,334 on Wednesday, and it had reached a 52-week high of Rs 1,341 earlier in the trading session.
And Tata Steel ended 1.1% higher on Wednesday at Rs 188.5, and it had reached a 52-week high of Rs 224.4 on 15 May, 2026.
Here are our findings on the performance of the leading three steel companies.
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SAIL’s Q1 Surge: How Flat Products Drove a 138% Profit Jump
SAIL sold 4.5 million tonnes as against 4.7 million tonne a year earlier, and its realisations also grew nearly 5.7% y-o-y to Rs 58,323 per tonne. The company has highlighted flat steel products, which are used in making cars and appliances, accounted for 52.7% of production as compared to 48.7% a year earlier.
The auto industry has shown strong growth and it helped steel makers get improved realisations on a per tonne basis.
The company’s revenue from operations grew barely 1.2% y-o-y to Rs 26,245.6 crore. Higher steel price realisations and tight check on costs helped the company’s operating profit margin rise 500 basis points y-o-y to 15.8%.
June 2026 quarter – Tata Steel v/s JSW Steel v/s SAIL
| Operational parameter | Tata Steel | JSW Steel | SAIL (standalone) |
| Steel sales / deliveries (million tonnes) | 5.17* | 6.25 | 4.5 |
| Net sales growth y-o-y (in %) | 14.3% | 9.8% | 1.2% |
| Net profit growth y-o-y (in %) | 18.8% | 112.6% | 138.8% |
Source – Screener.in, Company results and investor presentations
Tight check on costs also helped SAIL’s net profit jump 138.8% y-o-y to Rs 1,636 crore.
SAIL has a capacity of nearly 19 million tonnes at the end of FY25. The PSU steel company has not yet published its annual report for FY26.
Inside JSW Steel’s Q1FY27 Volume Drivers
JSW Steel has highlighted its consolidated steel sales volumes grew 4% y-o-y to 6.25 million tonnes . The company has highlighted that they were the best ever for the first quarter of a financial year.
Of equal importance, institutional sales were up 5% y-o-y to 3.7 million tonnes and along with sales to auto, renewable and appliances sectors were also the best ever for a June quarter.
It does appear that the Middle East crisis has not shown any visible impact on demand from user industries in the quarter.
JSW Steel on a consolidated basis has operations in India, USA and Italy, with sales in the local market remaining key – steel sales in the Indian market were 6.02 million tonnes in the June 2026 quarter, a rise of 4% y-o-y.
JSW Steel has a combined crude steel capacity of 37.9 million tonnes including 4.5 million tonnes through the JSW JFE Steel JV at the end of the June 2026 quarter.
JSW Steel: Cost Efficiencies Push Margins Up 220 Bps
JSW steel benefited from a combination of higher steel prices y-o-y along with a 4% y-o-y growth in its consolidated steel sales volumes.
The company’s realisations on a consolidated basis grew nearly 5.9% y-o-y to Rs 75,782 per tonne along with higher steel sales. As a result, its consolidated revenue from operations grew 9.8% y-o-y to Rs 47,364 crore.
A tight check on costs helped JSW Steel’s consolidated operating profit margin rise 220 basis points y-o-y to 19.8%. Also, JSW Steel’s consolidated net profit rose 112.6% y-o-y to Rs 4,696 crore.
Tata Steel: Robust Indian Output Masks European Weakness
Tata Steel once again benefited from the strong operational performance at its Indian operations, and it helped to offset the sluggish performance at its UK and Netherland operations.
At its Indian operations , Tata Steel delivered 5.17 million tonnes as against 4.75 million tonnes a year earlier, and the company has highlighted improved demand from auto and ancillaries coupled with house builders. The company benefited from recent additional capacity coming on stream at its Kalinganagar, Orissa facilities.
Realisations also improved nearly 3.5% y-o-y to Rs 67,576 tonne. Strong operational performance of Tata Steel India operations helped segment profit of this division rise 29.6% y-o-y to Rs 9,409.2 crore.
European operations – Sluggish demand and regional wars impact June 2026 quarter
The strong performance at its Indian operations contrasts with the sluggish performance at the company’s operations in Netherlands and the UK.
At Tata Steel’s UK operations, steel deliveries were 0.48 million tonnes as against 0.6 million tonnes a year earlier. At its UK operations, the company is currently servicing customers largely with imported steel slabs and they are further processed into higher value steel products at its service centres across that country.
Segment losses at its UK operations were Rs 340.7 crore as compared to Rs 471.2 crore a year earlier.
Meanwhile, in the Netherlands, delivery volumes were 1.4 million tonnes in the June 2026 quarter as compared to 1.5 million tonnes a year earlier. The company has highlighted that deliveries in Q1FY27 were impacted in part due to the shutdown of Direct Sheet Plant in April 2026
The Ukraine and Middle East war had led to a surge in crude prices in the June 2026 quarter, and European user industries / consumers had turned very cautious.
Segment profit of Tata Steel Netherland was Rs 39.1 crore as compared to Rs 610.9 crore a year earlier.
However, strong performance of Tata Steel’s Indian operations helped consolidated net sales rise 14.3% y-o-y to Rs 60,794.3 crore, and consolidated net profit also rose 18.8% y-o-y to Rs 2,385.2 crore.
Tata Steel ended FY26 with a capacity of 36 million tonnes across its Indian and global operations.
Weak Chinese steel production helps global steel prices
China is the world’s largest steel producer and its total output declined 3% y-o-y to 500 million tonnes during the period January to June 2026, according to the global industry body, World Steel.org.
A number of factors have contributed to sluggish Chinese steel production including a sluggish real estate sector in the country. In addition, leading steel consuming nations like USA, European Union and India, amongst others, have raised tariffs on steel imports.
This, in turn, has helped leading Indian steel makers to get better price realisations and higher net profits y-o-y in the June 2026 quarter.
Return on Equity – which steel maker is the most efficient
Tata Steel has a consolidated return on equity (RoE) of 11.7%, according to Screener.in, while it is 10.2% for JSW Steel.
SAIL has a standalone RoE of 6.48%.
| Steel company | Return on Equity (in %) |
| Tata Steel | 11.7% |
| JSW Steel | 10.2% |
| SAIL (standalone) | 6.48% |
The Valuation Gap: Why the Market Prices SAIL at a 39% Peer Discount
Tata Steel trades at a consolidated P/E of 20, while JSW Steel trades at a P/E of 27.1.
SAIL trades at a standalone P/E of 16.4.
Is the discount of 16%-39% justified for SAIL?
| Steel company | Consolidated P/E (x) |
| Tata Steel | 20 |
| JSW Steel | 27.1 |
| SAIL | 16.4 |
The festive season will start in a few weeks and demand for automobiles, white goods and homes are expected to see a pick-up. This, in turn, should drive demand for steel products, going forward.
Also, with the Middle East crisis showing no signs of easing / coming to an end, investors will continue to watch the trend in input prices for steel makers, like coking coal and freight costs, amongst others.
SAIL trades at a discount of 18%-39.5% to larger rivals, with investors viewing Tata Steel and JSW Steel as easily able to expand their market share going forward, and the resulting premium valuations.
Readers could add SAIL and other steel stocks to their watch list of stocks for 2026, and see if the performance matches expectations.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
Disclosure: The writer and his family have no shareholding in any of the stocks mentioned in the article.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
Sail
June 2026 quarter
Opm = 4152 / 26245 = 15.8%
June 2025 quarter
Realisations per ton = 55152
Opm = 2763 / 25921 = 10.65%