Indian steel companies are set to maintain their operating profitability for the 2027 financial year at 10,500–11,000 rupees ($110–115.5) per tonne, despite rising production costs. This is reported by Kallanish, citing a report by the rating agency Crisil Ratings.

Analysts expect domestic steel prices to rise by 6–8 per cent, which will fully offset the increase in raw material costs and operating expenses. As a result, the EBITDA margin per tonne will remain at its ten-year average.

Production costs will rise by 2,000 rupees to 53,000–54,000 rupees per tonne (the study covers the eight largest companies, which account for half of the country’s steel output). The main factor will be a 5–7% rise in the price of coking coal (which accounts for 40% of production costs) due to risks of supply disruptions and high demand. Rising freight, insurance and electricity tariffs will also lead to additional costs.

Rising global prices, government protective measures and strong domestic demand will help companies maintain their margins. In December 2025, India introduced a three-year phased protective duty of 11.5% on imports of certain types of steel, thereby limiting foreign competition.

Domestic demand for steel will grow by 5–7% thanks to investment in infrastructure, the automotive industry and construction. The market’s long-term potential is high: in 2025, per capita steel consumption in India stood at 109.2 kg, compared with the global average of 209 kg.

Favourable market conditions are driving capacity expansion. Steelmakers’ capital expenditure in the current financial year is set to reach 750–800 billion rupees (compared with 700 billion a year earlier). Around 75% of this amount will be financed from internal resources, which will enable the net debt-to-EBITDA ratio to improve from 2.8x to 2.6x.

At the same time, Crisil warns that the conflict in the Middle East remains a key risk for the sector, as it could lead to disruptions in supply chains and a further surge in costs.

As reported by GMK Center, India is capable of sustaining high demand for steel. Demand for steel in the country is growing by 7–8% a year, and this momentum is likely to continue over the next two decades thanks to infrastructure development and a focus on new growth sectors such as data centres, shipbuilding and defence manufacturing.