Margins are expected to moderate in FY2026, amid decline in rebar prices. Nonetheless, the coverage metrics are estimated to remain stable.

• Operating margins of secondary steel producers are expected to contract by ~180-200 bps in FY2026, driven by subdued TMT/rebar realisation. Despite a likely post-monsoon demand pickup, prices are expected to remain below last year’s levels, weighing on margins. In addition, secondary players face steeper pressure than primary integrated producers, reflecting their greater sensitivity to price volatility.
• Domestic rebar prices rose ~7-8% between December 2024 to April 2025 on improved sentiments and restocking, before correcting by 15% to ~Rs 41,000/MT by August 2025 amid moderate construction activity and monsoon disruptions. This sharper decline in rebar prices versus HRC (which declined by ~4%) has widened the spread, posing profitability pressures for long product focused players in FY2026.