Sunflag Iron & Steel Company Limited has delivered robust financial performance in the third quarter of FY26, demonstrating strong operational efficiency and growth momentum. The company's Board of Directors approved the unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025, during their 205th meeting held on February 13, 2026.

Financial Performance Highlights

The company's financial metrics showcase impressive growth across key parameters. The detailed quarterly and nine-month performance reflects the company's strengthening market position in the iron and steel sector.

Operational Efficiency and Cost Management

The company demonstrated effective cost management strategies during the quarter. Total expenses for Q3 FY26 were ₹85,849 lakhs compared to ₹82,888 lakhs in Q3 FY25. Cost of materials consumed stood at ₹57,558 lakhs for the quarter, while employee benefits expense was ₹3,705 lakhs. Finance costs decreased to ₹1,721 lakhs from ₹2,151 lakhs in the corresponding quarter last year, indicating improved financial management.

Exceptional Items and Regulatory Impact

The results included an exceptional item loss of ₹870 lakhs for both the quarter and nine-month periods. This exceptional charge relates to increased gratuity and leave liability following the Government of India's notification of four Labour Codes on November 21, 2025, which consolidated 29 existing labour laws. The company assessed the financial impact through actuarial valuation, resulting in the recognition of this additional liability.

Corporate Governance and Audit Appointments

The Board approved the reappointment of PricewaterhouseCoopers Services LLP as Internal Auditors for Financial Year 2026-27, based on the Audit Committee's recommendation. PricewaterhouseCoopers Services LLP brings extensive experience in internal audit and Internal Financial Controls review as part of PwC's global network operating across 149 countries.

Consolidated Results Performance

The consolidated financial results showed similar positive trends, with net profit after tax of ₹5,994 lakhs for Q3 FY26 and ₹16,809 lakhs for the nine-month period. The consolidated earnings per share stood at ₹3.33 for the quarter and ₹9.33 for nine months. The consolidated results include the performance of subsidiaries Sunflag Power Limited and Khappa Coal Company Private Limited, along with various joint ventures.

Other Comprehensive Income

The company reported significant other comprehensive income of ₹49,263 lakhs for Q3 FY26, primarily due to mark-to-market gains on equity shares held in Lloyds Metal & Energy Limited. This resulted in total comprehensive income of ₹55,173 lakhs for the quarter, demonstrating the company's diversified investment portfolio performance.

Sunflag Iron & Steel Company Limited has received a significant boost to its creditworthiness, as CRISIL Ratings has assigned favorable ratings to its bank facilities totaling Rs 1,850 crore. This development underscores the company's financial stability and could potentially enhance its borrowing capacity.

Rating Details

CRISIL Ratings has assigned the following ratings to Sunflag Iron & Steel Company's bank facilities:

The long-term rating of 'AA-' with a stable outlook indicates a high degree of safety regarding timely servicing of financial obligations, carrying very low credit risk. The short-term rating of 'A1+' is the highest rating in this category, suggesting a very strong degree of safety for timely payment of short-term debt obligations and lowest credit risk.

Facility Coverage

The ratings cover bank loan facilities across multiple financial institutions, including:

• State Bank of India (SBI)
• Bank of India
• HDFC Bank
• Other banks (not specifically named in the report)

Validity

These ratings are valid until January 01, 2027, providing a long-term assurance to lenders and stakeholders about the company's creditworthiness.

Implications

The high ratings assigned by CRISIL could potentially benefit Sunflag Iron & Steel Company in several ways:

1. Enhanced borrowing capacity
2. Potentially lower interest rates on future loans
3. Improved credibility with suppliers and customers
4. Positive signal to investors about the company's financial health

These ratings reflect CRISIL's assessment of Sunflag Iron & Steel Company's ability to meet its financial obligations promptly. It's important to note that while these ratings are a positive indicator, investors should consider other factors as well when making investment decisions.

As the steel industry continues to play a crucial role in India's infrastructure development, companies like Sunflag Iron & Steel Company with strong credit ratings may be well-positioned to capitalize on growth opportunities in the sector.